© 2006 prentice hall, inc.7 – 1 process strategy chapter7
Post on 22-Dec-2015
216 Views
Preview:
TRANSCRIPT
© 2006 Prentice Hall, Inc. 7 – 1
Process Strategy
Chapter7
2© 2006 Prentice Hall, Inc. 7 – 2
What is a process strategy? A process strategy is an organization’s
approach to transforms resources into goods and services.
The objective of a process strategy is to find a way to produce goods and services that meet customers requirements and product specifications within cost and other managerial constraints.
3© 2006 Prentice Hall, Inc. 7 – 3
Process Strategies
How to produce a product or provide How to produce a product or provide a service thata service that Meets or exceeds customer Meets or exceeds customer
requirementsrequirements
Meets cost and managerial goalsMeets cost and managerial goals
Has long term effects onHas long term effects on Efficiency and production flexibilityEfficiency and production flexibility
Costs and qualityCosts and quality
4© 2006 Prentice Hall, Inc. 7 – 4
Dell Computer Company““How can we make the process of How can we make the process of
buying a computer better?”buying a computer better?”
Sell custom-built PCs directly to consumerSell custom-built PCs directly to consumer
Build computers rapidly, at low cost, and Build computers rapidly, at low cost, and only when ordered only when ordered
Integrate the Web into every aspect of its Integrate the Web into every aspect of its businessbusiness
Focus research on software designed to Focus research on software designed to make installation and configuration of its make installation and configuration of its PCs fast and simplePCs fast and simple
5© 2006 Prentice Hall, Inc. 7 – 5
Process Strategies
Virtually every good or service is made by using some variation of one of four process strategies:
1. process focus2. repetitive focus3. product focus4. mass customization
Within these basic strategies there are many Within these basic strategies there are many ways they may be implementedways they may be implemented
6© 2006 Prentice Hall, Inc. 7 – 6
Process, Volume, and Variety
Process Focusprojects, job shops
(machine, print, carpentry)
Standard Register
Repetitive(autos, motorcycles)
Harley Davidson
Product Focus(commercial
baked goods, steel, glass)Nucor Steel
High VarietyHigh Varietyone or few one or few units per run, units per run, high varietyhigh variety(allows (allows customization)customization)
Changes in Changes in ModulesModulesmodest runs, modest runs, standardized standardized modulesmodules
Changes in Changes in AttributesAttributes (such as grade, (such as grade, quality, size, quality, size, thickness, etc.) thickness, etc.) long runs onlylong runs only
Mass Customization(difficult to achieve, but huge rewards)Dell Computer Co.
Poor Strategy Poor Strategy (Both fixed and (Both fixed and variable costs variable costs
are high)are high)
Low Low VolumeVolume
Repetitive Repetitive ProcessProcess
High High VolumeVolume
VolumeVolumeFigure 7.1Figure 7.1
7© 2006 Prentice Hall, Inc. 7 – 7
Process Focus
Facilities are organized around specific Facilities are organized around specific activities or processesactivities or processes
General purpose equipment and skilled General purpose equipment and skilled personnelpersonnel
High degree of product flexibilityHigh degree of product flexibility
Typically high costs and low equipment Typically high costs and low equipment utilizationutilization
Product flows may vary considerably Product flows may vary considerably making planning and scheduling a making planning and scheduling a challengechallenge
8© 2006 Prentice Hall, Inc. 7 – 8
Accounting
PRINTING DEPT
COLLATING DEPT
GLUING, BINDING, STAPLING, LABELING
POLYWRAP DEPT
SHIPPING
Vendors
Receiving
Warehouse
Purchasing
PREPRESS DEPT
Process Flow DiagramCustomer
Customer sales representative
Information flowInformation flowMaterial flowMaterial flow
Figure 7.2Figure 7.2
9© 2006 Prentice Hall, Inc. 7 – 9
Process Focus
Many Many inputsinputs
High High variety variety
of of outputsoutputs
Print ShopPrint Shop
10© 2006 Prentice Hall, Inc. 7 – 10
Process, Volume, and Variety
Process Focusprojects, job shops
(machine, print, carpentry)
Standard Register
Repetitive(autos, motorcycles)
Harley Davidson
Product Focus(commercial
baked goods, steel, glass)Nucor Steel
High VarietyHigh Varietyone or few one or few units per run, units per run, high varietyhigh variety(allows (allows customization)customization)
Changes in Changes in ModulesModulesmodest runs, modest runs, standardized standardized modulesmodules
Changes in Changes in AttributesAttributes (such as grade, (such as grade, quality, size, quality, size, thickness, etc.) thickness, etc.) long runs onlylong runs only
Mass Customization(difficult to achieve, but huge rewards)Dell Computer Co.
Poor Strategy Poor Strategy (Both fixed and (Both fixed and variable costs variable costs
are high)are high)
Low Low VolumeVolume
Repetitive Repetitive ProcessProcess
High High VolumeVolume
VolumeVolumeFigure 7.1Figure 7.1
11© 2006 Prentice Hall, Inc. 7 – 11
Repetitive Focus
Facilities often organized as Facilities often organized as assembly linesassembly lines
Characterized by modules with parts Characterized by modules with parts and assemblies made previouslyand assemblies made previously
Modules may be combined for Modules may be combined for manymany output optionsoutput options
Less flexibilityLess flexibility than process- than process-focused facilities but more focused facilities but more efficientefficient
12© 2006 Prentice Hall, Inc. 7 – 12
Repetitive Focus
Raw Raw materials materials
and and module module inputsinputs
Modules Modules combined combined for many for many
output output optionsoptions
Few Few modulesmodules
Automobile Assembly LineAutomobile Assembly Line
13© 2006 Prentice Hall, Inc. 7 – 13
Process Flow Diagram
THE ASSEMBLY LINETHE ASSEMBLY LINETESTING28 tests
Oil tank work cell
Shocks and forks
Handlebars
Fender work cell
Air cleaners
Fluids and mufflers
Fuel tank work cell
Wheel work cell
Roller testing
Incoming parts
From Milwaukee From Milwaukee on a JIT arrival on a JIT arrival scheduleschedule
Engines and transmissions
Frame tube bending
Frame-building work cells
Frame machining
Hot-paint frame painting
Crating
Figure 7.3Figure 7.3
14© 2006 Prentice Hall, Inc. 7 – 14
Process, Volume, and Variety
Process Focusprojects, job shops
(machine, print, carpentry)
Standard Register
Repetitive(autos, motorcycles)
Harley Davidson
Product Focus(commercial
baked goods, steel, glass)Nucor Steel
High VarietyHigh Varietyone or few one or few units per run, units per run, high varietyhigh variety(allows (allows customization)customization)
Changes in Changes in ModulesModulesmodest runs, modest runs, standardized standardized modulesmodules
Changes in Changes in AttributesAttributes (such as grade, (such as grade, quality, size, quality, size, thickness, etc.) thickness, etc.) long runs onlylong runs only
Mass Customization(difficult to achieve, but huge rewards)Dell Computer Co.
Poor Strategy Poor Strategy (Both fixed and (Both fixed and variable costs variable costs
are high)are high)
Low Low VolumeVolume
Repetitive Repetitive ProcessProcess
High High VolumeVolume
VolumeVolumeFigure 7.1Figure 7.1
15© 2006 Prentice Hall, Inc. 7 – 15
Product Focus
Facilities are organized by productFacilities are organized by product
High volume but low variety of High volume but low variety of productsproducts
Long, Long, continuous productioncontinuous production runs runs enable efficient processesenable efficient processes
Typically Typically high fixed costhigh fixed cost but but low low variable costvariable cost
Generally less skilled laborGenerally less skilled labor
16© 2006 Prentice Hall, Inc. 7 – 16
Product Focus
Many Many inputsinputs
Output Output variation variation in size, in size, shape, shape,
and and packagingpackaging
Bottling PlantBottling Plant
17© 2006 Prentice Hall, Inc. 7 – 17
Product FocusNucor Steel PlantNucor Steel Plant
Co
nti
nu
ou
s ca
ster
Co
nti
nu
ou
s ca
ster
Continuous cast steel Continuous cast steel sheared into 24-ton slabssheared into 24-ton slabs
Hot tunnel furnace - 300 ftHot tunnel furnace - 300 ft
Hot mill for finishing, cooling, and coilingHot mill for finishing, cooling, and coiling
DD
EE FF
GGHHII
Scrap Scrap steelsteel
Ladle of molten steelLadle of molten steelElectric Electric furnacefurnace
AA
BBCC
18© 2006 Prentice Hall, Inc. 7 – 18
Process, Volume, and Variety
Process Focusprojects, job shops
(machine, print, carpentry)
Standard Register
Repetitive(autos, motorcycles)
Harley Davidson
Product Focus(commercial
baked goods, steel, glass)Nucor Steel
High VarietyHigh Varietyone or few one or few units per run, units per run, high varietyhigh variety(allows (allows customization)customization)
Changes in Changes in ModulesModulesmodest runs, modest runs, standardized standardized modulesmodules
Changes in Changes in AttributesAttributes (such as grade, (such as grade, quality, size, quality, size, thickness, etc.) thickness, etc.) long runs onlylong runs only
Mass Customization(difficult to achieve, but huge rewards)Dell Computer Co.
Poor Strategy Poor Strategy (Both fixed and (Both fixed and variable costs variable costs
are high)are high)
Low Low VolumeVolume
Repetitive Repetitive ProcessProcess
High High VolumeVolume
VolumeVolumeFigure 7.1Figure 7.1
19© 2006 Prentice Hall, Inc. 7 – 19
Mass Customization
The rapid, low-cost production of The rapid, low-cost production of goods and service to satisfy goods and service to satisfy increasingly unique customer increasingly unique customer desiresdesires
Combines the flexibility of a Combines the flexibility of a process focus with the efficiency process focus with the efficiency of a product focusof a product focus
20© 2006 Prentice Hall, Inc. 7 – 20
Mass Customization
Vehicle modelsVehicle models 140140 260260Vehicle typesVehicle types 1818 1,2121,212Bicycle typesBicycle types 88 1919Software titlesSoftware titles 00 300,000300,000Web sitesWeb sites 00 46,412,16546,412,165Movie releasesMovie releases 267267 458458New book titlesNew book titles 40,53040,530 77,44677,446Houston TV channelsHouston TV channels 55 185185Breakfast cerealsBreakfast cereals 160160 340340Items (SKUs) in Items (SKUs) in 14,00014,000 150,000150,000 supermarketssupermarkets
Number of ChoicesNumber of ChoicesEarly 21stEarly 21st
ItemItem Early 1970sEarly 1970s Century Century
Table 7.1Table 7.1
21© 2006 Prentice Hall, Inc. 7 – 21
Mass Customization
Modular techniquesModular techniques
Mass Customization
Effective Effective scheduling scheduling techniquestechniques
Rapid Rapid throughput throughput techniquestechniques
Repetitive FocusRepetitive FocusModular designModular design
Flexible equipmentFlexible equipment
Process-FocusedProcess-FocusedHigh variety, low volumeHigh variety, low volume
Low utilization Low utilization (5% to 25%)(5% to 25%)General-purpose equipmentGeneral-purpose equipment
Product-FocusedProduct-FocusedLow variety, high volumeLow variety, high volume
High utilization High utilization (70% to 90%)(70% to 90%)Specialized equipmentSpecialized equipment
Figure 7.5Figure 7.5
22© 2006 Prentice Hall, Inc. 7 – 22
Comparison of Processes
Process Focus
(Job shop)
(Low volume, high variety)
Repetitive Focus(Harley-
Davidson
(Modular)
Product Focus
(Paper-beer)
(High-volume, low-variety)
Mass Customization
(Dell Computer)
(High-volume, high-variety)
Small quantity, large variety of products
Long runs, standardized product made from modules
Large quantity, small variety of products
Large quantity, large variety of products
General purpose equipment
Special equipment aids in use of assembly line
Special purpose equipment
Rapid changeover on flexible equipment
Table 7.2Table 7.2
23© 2006 Prentice Hall, Inc. 7 – 23
Comparison of Processes
Process Focus
(Job shop)
(Low volume, high variety)
Repetitive Focus(Harley-Davidson
(Modular)
Product Focus
(Paper-beer)
(High-volume, low-variety)
Mass Customization
(Dell Computer)
(High-volume, high-variety)
Operators are broadly skilled
Employees are modestly trained
Operators are less broadly skilled
Flexible operators are trained for the necessary customization
Many job instructions as each job changes
Repetition reduces training and changes in job instructions
Few work orders and job instructions because jobs standardized
Custom orders require many job instructions
Table 7.2Table 7.2
24© 2006 Prentice Hall, Inc. 7 – 24
Comparison of Processes
Process Focus
(Job shop)
(Low volume, high variety)
Repetitive Focus (Harley-Davidson
(Modular)
Product Focus
(Paper-beer)
(High-volume, low-variety)
Mass Customization
(Dell Computer)
(High-volume, high-variety)
Raw material inventories high
JIT procurement techniques used
Raw material inventories are low
Raw material inventories are low
Work-in-process is high
JIT inventory techniques used
Work-in-process inventory is low
Work-in-process inventory driven down by JIT, lean production
Table 7.2Table 7.2
25© 2006 Prentice Hall, Inc. 7 – 25
Comparison of Processes
Process Focus
(Job shop)
(Low volume, high variety)
Repetitive Focus (Harley-Davidson
(Modular)
Product Focus
(Paper-beer)
(High-volume, low-variety)
Mass Customization
(Dell Computer)
(High-volume, high-variety)
Units move slowly through the plant
Movement is measured in hours and days
Swift movement of unit through the facility is typical
Goods move swiftly through the facility
Finished goods made to order
Finished goods made to frequent forecast
Finished goods made to forecast and stored
Finished goods often made to order
Table 7.2Table 7.2
26© 2006 Prentice Hall, Inc. 7 – 26
Comparison of Processes
Process Focus
(Job shop)
(Low volume, high variety)
Repetitive Focus(Harley-
Davidson
(Modular)
Product Focus
(Paper-beer)
(High-volume, low-variety)
Mass Customization
(Dell Computer)
(High-volume, high-variety)
Scheduling is complex, trade-offs between inventory, availability, customer service
Scheduling based on building various models from modules to forecasts
Relatively simple scheduling, establishing output rate to meet forecasts
Sophisticated scheduling required to accommodate custom orders
Table 7.2Table 7.2
27© 2006 Prentice Hall, Inc. 7 – 27
Comparison of Processes
Process Focus
(Job shop)
(Low volume, high variety)
Repetitive Focus(Harley-Davidson
(Modular)
Product Focus
(Paper-beer)
(High-volume, low-variety)
Mass Customization
(Dell Computer)
(High-volume, high-variety)
Fixed costs low, variable costs high
Fixed costs dependent on flexibility of the facility
Fixed costs high, variable costs low
Fixed costs high, variable costs must be low
Costing estimated before job, not known until after job is complete
Costs usually known due to extensive experience
High fixed costs mean costs dependent on utilization of capacity
High fixed costs and dynamic variable costs make costing a challenge
Table 7.2Table 7.2
28© 2006 Prentice Hall, Inc. 7 – 28
Crossover Charts
Fixed costs
Variable Variable costscosts
$$
High volume, low varietyHigh volume, low varietyProcess CProcess C
Fixed costs
Variable Variable costscosts$$
RepetitiveRepetitiveProcess BProcess B
Fixed costs
Variable Variable costscosts$$
Low volume, high varietyLow volume, high varietyProcess AProcess A
Fixed cost Process A Fixed cost Fixed cost
Process BProcess BFixed cost Process C
Tota
l cos
t
Tota
l cos
t
Total cost
Total cost
Total costTotal cost
VV11(2,857)(2,857) VV22(6,666)(6,666)
400,000 400,000
300,000 300,000
200,000 200,000
VolumeVolume
$$
Figure 7.6Figure 7.6
29© 2006 Prentice Hall, Inc. 7 – 29
Changing Processes
Difficult and expensiveDifficult and expensive
May mean starting overMay mean starting over
Process strategy determines Process strategy determines transformation strategy for an transformation strategy for an extended periodextended period
Important to get it rightImportant to get it right
30© 2006 Prentice Hall, Inc. 7 – 30
Process Analysis and Design
Flow Diagrams - Shows the movement Flow Diagrams - Shows the movement of materialsof materials
Time-Function Mapping - Shows flows Time-Function Mapping - Shows flows and time frameand time frame
Value Stream Mapping - Shows flows Value Stream Mapping - Shows flows and time and value added beyond the and time and value added beyond the immediate organizationimmediate organization
Process Charts - Uses symbols to show Process Charts - Uses symbols to show key activitieskey activities
Service Blueprinting - focuses on Service Blueprinting - focuses on customer/provider interactioncustomer/provider interaction
31© 2006 Prentice Hall, Inc. 7 – 31
Time-Function Mapping (Before process improvement at American National Can Company)
CustomerCustomer
SalesSales
Production Production controlcontrol
Plant APlant A
WarehouseWarehouse
Plant BPlant B
TransportTransport Move
Receive product
Extrude
Wait
Move
Wait
Wait
Order product
Process order
Wait
12 days12 days 13 days13 days 1 day1 day 4 days4 days 1 day1 day 10 days10 days 1 day1 day 0 day0 day 1 day1 day
52 days52 daysFigure 7.7Figure 7.7
32© 2006 Prentice Hall, Inc. 7 – 32
Time-Function Mapping (After process improvement at American National Can Company)
CustomerCustomer
SalesSales
Production Production controlcontrol
PlantPlant
WarehouseWarehouse
TransportTransport Move
Receive product
Extrude
Wait
Order product
Process order
Wait
1 day1 day 2 days2 days 1 day1 day 1 day1 day 1 day1 day
6 days6 days
Figure 7.7Figure 7.7
33© 2006 Prentice Hall, Inc. 7 – 33
Process Chart
Figure 7.8Figure 7.8
34© 2006 Prentice Hall, Inc. 7 – 34
Service Blueprint
Focuses on the Focuses on the customercustomer and and provider provider interactioninteraction
Defines three levels of interactionDefines three levels of interaction
Each level has different Each level has different management issuesmanagement issues
Identifies potential failure pointsIdentifies potential failure points
35© 2006 Prentice Hall, Inc. 7 – 35
Service BlueprintPersonal Greeting Service Diagnosis Perform Service Friendly Close
Customer arrives for service
Warm greeting and obtain
service request
Direct customer to waiting room Notify
customer the car is ready
Customer departs
Customer pays bill
Perform required work
Prepare invoice
YesYesYesYes
LevelLevel#3#3
LevelLevel#1#1
LevelLevel#2#2
Potential failure pointPotential failure point
Figure 7.9Figure 7.9
NoNo
Notifycustomer
and recommendan alternative
providerStandard request
Determine specifics
NoNo
Canservice be
done and does customer approve?
36© 2006 Prentice Hall, Inc. 7 – 36
Service FactoryService Factory Service ShopService Shop
Degree of CustomizationDegree of Customization
LowLow HighHigh
Deg
ree
of
Lab
or
Deg
ree
of
Lab
or
LowLow
HighHigh
Mass ServiceMass Service Professional ServiceProfessional Service
Service Process Matrix
Commercial banking
Private banking
General-purpose law firms
Law clinicsSpecialized hospitals
Hospitals
Full-service stockbroker
Limited-service stockbroker
Retailing
Boutiques
Warehouse and catalog stores
Fast food restaurants
Fine-dining restaurants
Airlines
No frills airlinesFigure 7.10Figure 7.10
37© 2006 Prentice Hall, Inc. 7 – 37
Improving Service Productivity
Strategy Technique Example
Separation Structure service so customers must go where service is offered
Bank customers go to a manager to open a new account, to loan officers for loans, and to tellers for deposits
Self-service Self-service so customers examine, compare, and evaluate at their own pace
Supermarkets and department stores, internet ordering
Table 7.3Table 7.3
38© 2006 Prentice Hall, Inc. 7 – 38
Strategy Technique Example
Postponement Customizing at delivery Customizing vans at delivery rather than at production
Focus Restricting the offerings Limited-menu restaurant
Modules Modular selection of service, modular production
Investment and insurance selection, prepackaged food modules in restaurants
Improving Service Productivity
Table 7.3Table 7.3
39© 2006 Prentice Hall, Inc. 7 – 39
Strategy Technique Example
Automation Precise personnel scheduling
Automatic teller machines
Scheduling Precise personnel scheduling
Scheduling ticket counter personnel at 15-minute intervals at airlines
Training Clarifying the service options, explaining how to avoid problems
Investment counselor, funeral directors, after-sale maintenance personnel
Improving Service Productivity
Table 7.3Table 7.3
40© 2006 Prentice Hall, Inc. 7 – 40
Equipment and Technology
Often complex decisionsOften complex decisions
Possible competitive advantagePossible competitive advantage FlexibilityFlexibility
Stable processesStable processes
May allow enlarging the scope of the May allow enlarging the scope of the processesprocesses
41© 2006 Prentice Hall, Inc. 7 – 41
Improving Service Processes
LayoutLayout Product exposure, customer Product exposure, customer
education, product enhancementeducation, product enhancement
Human ResourcesHuman Resources Recruiting and trainingRecruiting and training
Impact of flexibilityImpact of flexibility
42© 2006 Prentice Hall, Inc. 7 – 42
Production Technology
Machine technologyMachine technology Automatic identification systems (AIS)Automatic identification systems (AIS) Process controlProcess control Vision systemVision system RobotRobot Automated storage and retrieval systems Automated storage and retrieval systems
(ASRS)(ASRS) Flexible manufacturing systems (FMS)Flexible manufacturing systems (FMS) Computer-integrated manufacturing (CIM)Computer-integrated manufacturing (CIM)
43© 2006 Prentice Hall, Inc. 7 – 43
Machine Technology
Increased precisionIncreased precision
Increased productivityIncreased productivity
Increased flexibilityIncreased flexibility
Improved environmental impact Improved environmental impact
Reduced changeover timeReduced changeover time
Decreased sizeDecreased size
Reduced power requirementsReduced power requirements
44© 2006 Prentice Hall, Inc. 7 – 44
Automatic Identification Systems (AIS): These systems help us move
data into electronic form, whereby it is easily manipulated.
Improved data acquisitionImproved data acquisition
Reduced data entry errorsReduced data entry errors
Increased speedIncreased speed
Increased scope of process Increased scope of process automationautomation
Example: Radio frequency Example: Radio frequency identification for tracking identification for tracking everything!everything!
45© 2006 Prentice Hall, Inc. 7 – 45
Process Control: Use of Information Technology to
monitor and control a physical process.
Increased process stabilityIncreased process stability
Increased process precisionIncreased process precision
Real-time provision of information Real-time provision of information for process evaluationfor process evaluation
Data available in many formsData available in many forms
Example: Sensors, Computer Example: Sensors, Computer Programs read file and analyze the Programs read file and analyze the data.data.
46© 2006 Prentice Hall, Inc. 7 – 46
Process Control Software: controls the flow of sugars and fruits into a juice mixer.
47© 2006 Prentice Hall, Inc. 7 – 47
Vision Systems: Combine video cameras and computer technology and are often used in inspection roles.
Particular aid to inspectionParticular aid to inspection
Consistently accurateConsistently accurate
Never boredNever bored
Modest costModest cost
Superior to individuals performing Superior to individuals performing the same tasksthe same tasks
Example: Example: inspecting French fries so that inspecting French fries so that imperfections can be identified by the end of the imperfections can be identified by the end of the line.line.
48© 2006 Prentice Hall, Inc. 7 – 48
Robots
Perform monotonous or dangerous Perform monotonous or dangerous taskstasks
Perform tasks requiring significant Perform tasks requiring significant strength or endurancestrength or endurance
Generally enhanced consistency Generally enhanced consistency and accuracyand accuracy
49© 2006 Prentice Hall, Inc. 7 – 49
Robotic Surgery
50© 2006 Prentice Hall, Inc. 7 – 50
Automated Storage and Retrieval Systems (ASRS)
Provide for the automated placement and Provide for the automated placement and withdrawal of parts and productswithdrawal of parts and products
Reduced errors and laborReduced errors and labor
Particularly useful in inventory and test Particularly useful in inventory and test areas of manufacturing firmsareas of manufacturing firms
Such systems are commonly used in Such systems are commonly used in distribution facilities of retailers such as distribution facilities of retailers such as Wal-Mart.Wal-Mart.
51© 2006 Prentice Hall, Inc. 7 – 51
Automated Guided Vehicle (AGV)
Electronically guided and controlled Electronically guided and controlled cartscarts
Used for movement of products Used for movement of products and/or individualsand/or individuals
52© 2006 Prentice Hall, Inc. 7 – 52
Flexible Manufacturing Systems (FMS)
Computer controls both the workstation Computer controls both the workstation and the material handling equipmentand the material handling equipment
Enhance flexibility and reduced wasteEnhance flexibility and reduced waste Can economically produce low volume at Can economically produce low volume at
high qualityhigh quality Reduced changeover time and increased Reduced changeover time and increased
utilizationutilization Stringent communication requirement Stringent communication requirement
between componentsbetween components
53© 2006 Prentice Hall, Inc. 7 – 53
Computer Integrated Manufacturing (CIM)
Extension of flexible manufacturing Extension of flexible manufacturing systemssystems Backwards to engineering and inventory Backwards to engineering and inventory
controlcontrol Forward into warehousing and shippingForward into warehousing and shipping Can also include financial and customer Can also include financial and customer
service areasservice areas
Reducing the distinction between low-Reducing the distinction between low-volume/high-variety, and volume/high-variety, and high-volume/low-variety productionhigh-volume/low-variety production
54© 2006 Prentice Hall, Inc. 7 – 54
Computer Integrated Manufacturing (CIM)
Top management decides to make a product
OM runs the production process
Computer-aided design (CAD) designs the product
Computer-aided manufacturing (CAM)
Robots put the product together
Automated storage and retrieval system (ASRS) and automated guided vehicles (AGVs)
Management Information
System
FM
SF
MS
CIM
CIM
Figure 7.11Figure 7.11
55© 2006 Prentice Hall, Inc. 7 – 55
Technology in Services
Service Industry Example
Financial Services Debit cards, electronic funds transfer, ATMs, Internet stock trading
Education Electronic bulletin boards, on-line journals
Utilities and government
Automated one-man garbage trucks, optical mail and bomb scanners, flood warning systems
Restaurants and foods
Wireless orders from waiters to kitchen, robot butchering, transponders on cars that track sales at drive-throughs
Communications Electronic publishing, interactive TV
Table 7.4Table 7.4
56© 2006 Prentice Hall, Inc. 7 – 56
Technology in Services
Service Industry Example
Hotels Electronic check-in/check-out, electronic key/lock system
Wholesale/retail trade
Point-of-sale terminals, e-commerce, electronic communication between store and supplier, bar coded data
Transportation Automatic toll booths, satellite-directed navigation systems
Health care Online patient-monitoring, online medical information systems, robotic surgery
Airlines Ticketless travel, scheduling, Internet purchases
Table 7.4Table 7.4
top related