Operation management 10e heizer render chapter 07

Operations
Management
Chapter 7 –
Process Strategy
PowerPoint presentation to accompany
Heizer/Render
Principles of Operations Management, 7e
Operations Management, 9e
© 2008 Prentice Hall, Inc.

7–1


Outline
 Global Company Profile: Dell
Computer Corp.
 Four Process Strategies
 Process Focus
 Repetitive Focus
 Product Focus
 Mass Customization Focus
 Comparison of Process Choices
© 2008 Prentice Hall, Inc.

7–2


Outline – Continued
 Process Analysis and Design
 Flow Diagrams
 Time-Function Mapping

 Value-Stream Mapping
 Process Charts
 Service Blueprinting

© 2008 Prentice Hall, Inc.

7–3


Outline – Continued
 Service Process Design
 Customer Interaction and Process
Design
 More Opportunities to Improve
Service Processes

 Selection of Equipment and
Technology

© 2008 Prentice Hall, Inc.

7–4


Outline – Continued
 Production Technology
 Machine Technology
 Automatic Identification Systems
(AISs) and RFID
 Process Control

 Vision Systems
 Robots

© 2008 Prentice Hall, Inc.

7–5


Outline – Continued
 Production Technology (cont.)
 Automated Storage and Retrieval
Systems (ASRSs)
 Automated Guided Vehicles (AGVs)
 Flexible Manufacturing Systems
(FMSs)
 Computer-Integrated Manufacturing
(CIM)

© 2008 Prentice Hall, Inc.

7–6


Outline – Continued
 Technology in Services
 Process Redesign
 Ethics and Environmentally
Friendly Processes

© 2008 Prentice Hall, Inc.

7–7


Learning Objectives
When you complete this chapter you
should be able to:
1. Describe four production processes
2. Compute crossover points for
different processes
3. Use the tools of process analysis
4. Describe customer interaction in
process design
5. Identify recent advances in
production technology
© 2008 Prentice Hall, Inc.

7–8


Dell Computer Company
Mass customization provides a
competitive advantage
 Sell custom-built PCs directly to consumer
 Lean production processes and good
product design allow responsiveness
 Integrate the Web into every aspect of its
business
 Focus research on software designed to
make installation and configuration of its

PCs fast and simple
© 2008 Prentice Hall, Inc.

7–9


Process, Volume, and Variety
Volume
Repetitive
Process

Figure 7.1

Low
Volume
High Variety
one or few
units per run,
high variety
(allows
customization)
Changes in
Modules
modest runs,
standardized
modules
Changes in
Attributes
(such as grade,
quality, size,

thickness, etc.)
long runs only
© 2008 Prentice Hall, Inc.

Process Focus
projects, job shops
(machine, print,
carpentry)
Standard Register

High
Volume
Mass Customization
(difficult to achieve,
but huge rewards)
Dell Computer

Repetitive
(autos, motorcycles)
Harley-Davidson
Poor Strategy
(Both fixed and
variable costs
are high)

Product Focus
(commercial
baked goods,
steel, glass)
Nucor Steel

7 – 10


Process Strategies
 How to produce a product or provide
a service that
 Meets or exceeds customer
requirements
 Meets cost and managerial goals

 Has long term effects on
 Efficiency and production flexibility
 Costs and quality
© 2008 Prentice Hall, Inc.

7 – 11


Process Strategies
Four basic strategies
 Process focus
 Repetitive focus
 Product focus
 Mass customization
Within these basic strategies there are
many ways they may be implemented
© 2008 Prentice Hall, Inc.

7 – 12

Process Focus
 Facilities are organized around specific
activities or processes
 General purpose equipment and skilled
personnel
 High degree of product flexibility
 Typically high costs and low equipment
utilization
 Product flows may vary considerably
making planning and scheduling a
challenge
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7 – 13


Process Focus

Many
inputs

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Many departments and
many routings

Job Shop

Many

variety
of
outputs

7 – 14


Process Flow Diagram
Customer

Purchasing

Accounting

Customer sales
representative

Vendors

PREPRESS DEPT

Receiving

PRINTING DEPT

Warehouse

Information flow
Material flow

COLLATING
DEPT

GLUING, BINDING,
STAPLING, LABELING

POLYWRAP DEPT
SHIPPING

Customer
© 2008 Prentice Hall, Inc.

Figure 7.2
7 – 15


Repetitive Focus
 Facilities often organized as
assembly lines
 Characterized by modules with parts
and assemblies made previously
 Modules may be combined for many
output options
 Less flexibility than processfocused facilities but more efficient
© 2008 Prentice Hall, Inc.

7 – 16


Repetitive Focus

Automobile Assembly Line

Modules
combined
for many
output
options

Raw
materials
and
module
inputs

Few
modules
© 2008 Prentice Hall, Inc.

7 – 17


Process Flow Diagram
Frame tube
bending

Frame-building
work cells

Frame
machining

Hot-paint
frame painting

THE ASSEMBLY LINE
TESTING
28 tests

Incoming parts

Air cleaners

Oil tank work cell

Fluids and mufflers

Shocks and forks

Fuel tank work cell

Handlebars

Wheel work cell

Fender work cell

Engines and
transmissions
From Milwaukee
on a JIT arrival

schedule

Roller testing
Crating

Figure 7.3
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7 – 18


Product Focus
 Facilities are organized by product
 High volume but low variety of
products
 Long, continuous production runs
enable efficient processes
 Typically high fixed cost but low
variable cost
 Generally less skilled labor
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7 – 19


Product Focus
Continuous Work Flow

Few
inputs

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Output
variations
in size,
shape,
and
packaging

7 – 20


Product Focus
D

Continuous caster

Nucor Steel Plant

C

Scrap
steel

A

B
Ladle of molten steel

Continuous cast steel
sheared into 24-ton slabs
Hot tunnel furnace - 300 ft

E

Electric
furnace

F

Hot mill for finishing, cooling, and coiling

H

G

I

© 2008 Prentice Hall, Inc.

7 – 21


Mass Customization
 The rapid, low-cost production of
goods and service to satisfy
increasingly unique customer
desires
 Combines the

flexibility of a
process focus
with the efficiency
of a product focus
© 2008 Prentice Hall, Inc.

7 – 22


Mass Customization
Table 7.1

Item
Vehicle models
Vehicle types
Bicycle types
Software titles
Web sites
Movie releases
New book titles
Houston TV channels
Breakfast cereals
Items (SKUs) in
supermarkets
LCD TVs
© 2008 Prentice Hall, Inc.

Number of Choices
1970s
21st Century

140
286
18
1,212
8
19
0
400,000
0
98,116,993
267
458
40,530
77,446
5
185
160
340
14,000
150,000
0

102
7 – 23


Mass Customization
Repetitive Focus

Figure 7.5

Flexible people
and equipment

Supportive
supply
chains

Modular techniques

Mass Customization
Effective
scheduling
techniques
Process-Focused

High variety, low volume
Low utilization (5% to 25%)
General-purpose equipment
© 2008 Prentice Hall, Inc.

Rapid
throughput
techniques
Product-Focused

Low variety, high volume
High utilization (70% to 90%)
Specialized equipment
7 – 24

Comparison of Processes
Process
Focus
(Low volume,
high variety)

Repetitive
Focus
(Modular)

Product Focus
(High-volume,
low-variety)

Mass
Customization
(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 7.2

© 2008 Prentice Hall, Inc.

7 – 25