chapter 7 process strategy production and operation and management

CHRISTINE A. CAYANAN

Production and Operation Management 04/13/2023

1Christine A. Cayanan

CHAPTER 7

Process Strategy

04/13/2023

2Christine A. Cayanan

04/13/2023

What is Process Selection?

Christine A. Cayanan

04/13/2023Christine A. Cayanan

Process Selection : It refers to deciding on the way production of goods or

services will be organized.

It has a major implications for capacity planning, layout of facilities and design of work systems.

Commercial Video Clip on Process Strategy

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There are 2 Aspects of Process Strategy

2 Aspects of Process Strategy Capital Intensity- is the mix of equipment and labor that

will be used by the organization.

Process Flexibility- the degree to which the system can be adjusted to changes in processing requirements due to such factors as changes in product or service design, changes in volume processed and changes in technology.

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TECHNOLOGY

TECHNOLOGY Technological Innovation- refers to the discovery and

development of new or improved products, services, or processes for producing or providing them.

Technology- refers to application of scientific discoveries to the development and improvement of goods and services, or processes that produce or provide them.

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There are 3 kinds of Technology

3 Kinds of Technology

1. Product and Service Technology- it is the discovery and development of new products and services.

- This is done mainly by researchers and engineers, who use the scientific approach to develop new knowledge and translate that into commercial applications.

Product and Service Technology Video

2. Process Technology- includes methods, procedures, and equipment used to produce goods and provide services.

- Involves not only the processes within an organization, it also extends to supply chain processes.

3. Information Technology (IT)- is the science and use of computers and other electronic equipment to store, process, and send information.

- This includes electronic data processing , the use of bar codes and radio frequency tags to identify, track goods, devices used to obtain point of sale information, e-commerce, e-mail and more.

Information Technology Video

Technology as a Competitive Advantage

Examples of technological advances are:

1.Cell phones2.Wireless computing3.Emails4.Digital cameras5.Satellite radio

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PROCESS SELECTION

PROCESS SELECTION There are 3 primary questions bear on process selection:1. How much variety of products will the system need to

handle?2. What degree of equipment flexibility will be needed?3. What is the expected volume of output?

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3 BASIC STRATEGIES

Process focus Product focus Repetitive focus

Continuum

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PROCESS FOCUS

Process – Focused Strategy -an organization's approach to transforming

resources into goods and services

-objective is to create a process that can produce products that meets customer requirements within cost and other managerial constraints

Process-Focused Strategy Examples

TYPES OF PROCESS FOCUS

1. JOB SHOP2. BATCH3. REPETITIVE/ASSEMBLY4. CONTINUOUS

1. JOB SHOP A JOB SHOP usually operates on a relatively small

scale. It is used when a low volume of high-variety goods or services will be needed.

Processing is intermittent ; work includes small jobs, each with somewhat different processing requirements.

Finished goods are usually made to order.

Examples: Restaurants, Hospitals, machine shops

2. BATCH It is used when a moderate volume of goods

or services is desired, and it can handle a moderate variety in products or services.

Example: Bakeries, which make bread, cakes or

cookie in batches.

Batch Process Video

3. REPETITIVE When higher volumes of more

standardized goods or services are needed, repetitive processing is used.

Examples: (Repetitive)

Repetitive Process Video

4. CONTINUOUS When a very high volume of non-discrete

, highly standardized output is desired, a continuous system is used. Example: Oil Refinery performs a continues process.

Continuous Process Video

PRODUCT AND SERVICE PROFILING This can be used to avoid any

inconsistencies by identifying the key product or service dimensions and in selecting appropriate processes.

AUTOMATION Machinery that has sensing and control

devices that enable it to operate automatically.

Example: EZ tag, ATM

3 kinds of Automation Fixed Automation Programmable Automation Computer-aided manufacturing (CAM)

1. Fixed Automation Is the most rigid of the 3 types. It uses a

high cost, specialized equipment for fixed sequence of operations.

Advantage: low cost and high volume Limitation: minimal variety and high

cost of making major changes in either product or process.

2. Programmable automation

It involves the use of high-cost, general purpose equipment controlled by a computer program that provides both the sequence of operations and specific details about each operation.

Example: robots are applications of programmable automation

Computer –aided manufacturing (CAM)-refers to the use of computers in process control, ranging from robots to automated quality control,

• Numerically controlled (N/C) machines –are programmed to follow a set of processing instructions based on the mathematical relationships that tells the machine the details of operations to be performed.

3. Flexible Automation Evolved from programmable

automation . It uses equipment that is more customized than that of programmable automation.

Automation Video

FACILITIES LAYOUT

LAYOUT

This refers to the configuration of department , work centers and equipment with particular emphasis on movement of work through the system.

Most common reasons for redesign of layouts:

Inefficient operations E.g., high cost , bottlenecks, accidents or

safety hazards, changes in the design of products and services, introduction of new products or services.

Objective of layout design

To facilitate a smooth flow of work, material, and information through the system.

Supporting objectives involves the ff:

1. To facilitate attainment of product or service quality.2. To use workers and space efficiently3. To avoid bottlenecks4. To minimize material handling costs5. To eliminate unnecessary movements of workers or

materials6. To minimize production time or customer service time7. To design for safety.

PRODUCT – FOCUSED STRATEGY

48Product-Focused Strategy¨ Facilities are organized by product¨ High volume, low variety products¨ Where found

¨ Discrete unit manufacturing¨ Continuous process manufacturing

¨ Other names¨ Line flow production¨ Continuous production

Product-Focused Strategy Advantages

Lower variable cost per unit Lower but more specialized labor skills Easier production planning and control Higher equipment utilization (70% to 90%)

Disadvantages Lower product flexibility More specialized equipment Usually higher capital investment

Product-Focused Examples

Light Bulbs (Discrete)

Paper (Continuous)

Soft Drinks (Continuous, then Discrete)

REPETITIVE FOCUSED STRATEGY

Repetitive Focused Strategy

Facilities often organized by assembly lines Characterized by modules

Parts & assemblies made previously Modules combined for many output options Other names

Assembly line Production line

Repetitive Focused Strategy -Considerations

More structured than process-focused, less structured than product focused

Enables quasi-customization Using modules, it enjoys economic advantage of

continuous process, and custom advantage of low-volume, high-variety model

Repetitive-Focused Strategy - Examples

Clothes Dryer

Fast Food

McDonald’sover 95 billion served

Product Layouts Are used to achieve a smooth and rapid

flow of large volumes of goods or customers through a system.

Process Layout (functional)

Dept. A

Dept. B

Dept. C

Dept. D

Dept. E

Dept. F

Production Line Standardized layout arranged according

to a fixed sequence of production tasks

Production Line (flow line)Begin Work flow

EndRaw Materials

Finished line

Station 1

Station 2

Station a

Station b

Assembly line Standardized layout arranged according

to a fixed sequence of assembly tasks

Tray Dessert Salads Main Course

Beverage

Cashier

TOOLS FOR PROCESS DESIGN

Flow DiagramsProcess ChartsTime-Function/Process Mapping

Service Blueprinting

Flow Diagram

Shipping

CustomerCustomer

sales representativ

etake orderPrepress

Department(Prepare printing

plates and negatives)Printing

DepartmentCollating Department

Gluing, binding, stapling, labelingPolywrap

Department

Purchasing(order inks, paper, other

supplies)VendorsReceiving

Warehousing(ink, paper, etc.)

Accounting

Information flowMaterial flow

SUBJECT: Request tool purchase

Dist (ft) Time (min) Symbol Descriptionlðo DÑWrite order¡ðo D Ñ On desk

75 ¡ è oDÑTo buyer¡ðn DÑ Examine

¡ = Operation; ð = Transport; o = Inspect; D = Delay; Ñ = Storage

Process Chart Example

Service Blueprint for Service at Ten Minute Lube, Inc.

Attaining Lean Production

Focus on inventory reduction Build systems that help employees Reduce space requirements Develop close relationships with suppliers Educate suppliers Eliminate all but value-added activities Develop the workforce Make jobs more challenging Set sights on perfection!

Techniques for Improving Service Productivity

Separation

Self-service

Postponement Focus

Structure service to customers must go where service is offered

Self-service to customers examine, compare and evaluate at their own pace

Customizing at delivery

Restricting the offerings

Strategy Technique65

Techniques for Improving Service Productivity - Continued

Modules

Automation

Scheduling

Training

Modular selection of service. Modular production

Separating services that lend themselves to automation

Precise personnel scheduling Clarifying the service options Explaining problems Improving employee

flexibility

More Opportunities to Improve Service Processes

Layout Human Resources Technology

End of Powerpoint Presentation

Thank you!!!

chapter 7 process strategy production and operation and management

process technology

process flexibility

process selectionchristine

process focuschristine

process focused strategy

basic strategies process

types of process focus1

improvement of goods

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