Operations management heizer 6e ch07

Operations
Management
Chapter 7 –
Process Strategy
PowerPoint presentation to accompany
Heizer/Render
Principles of Operations Management, 6e
Operations Management, 8e
© 2006
Prentice
Hall, Inc. Hall, Inc.
©
2006
Prentice

7–1


Outline
 Global Company Profile: Dell
Computer Co.
 Four Process Strategies
 Process Focus
 Repetitive Focus
 Product Focus
 Mass Customization Focus
 Comparison of Process Choices
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7–2

Outline – Continued
 Process Analysis And Design
 Flow Diagrams
 Time-Function Mapping
 Value Stream Mapping
 Process Charts
 Service Blueprinting

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7–3


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

 Selection Of Equipment And
Technology

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7–4


Outline – Continued

 Production Technology
 Machine Technology
 Process Control
 Vision Systems
 Automated Storage and Retrieval System
 Automated Guided Vehicle (AGV)
 Flexible Manufacturing System (FMS)
 Computer-Integrated Manufacturing
(CIM)
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7–5


Outline – Continued
 Technology In Services
 Process Redesign
 Ethics And Environmentally
Friendly Processes

© 2006 Prentice Hall, Inc.

7–6


Learning Objectives
When you complete this chapter, you
should be able to:
Identify or Define:
 Process focus

 Repetitive focus
 Product focus
 Process reengineering
 Service process issues
 Environmental issues
© 2006 Prentice Hall, Inc.

7–7


Learning Objectives
When you complete this chapter, you
should be able to:
Describe or Explain:
 Process Analysis
 Service Design
 Production Technology
 Process Redesign
 Ethics and Environmentally Friendly
Processes
© 2006 Prentice Hall, Inc.

7–8


Dell Computer Company
“How can we make the process of
buying a computer better?”
 Sell custom-built PCs directly to consumer
 Build computers rapidly, at low cost, and

only when ordered
 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
© 2006 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
© 2006 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 Co.

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

Product Focus
(commercial
baked goods,
steel, glass)
Nucor Steel
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Process Flow Diagram
Customer

Purchasing

Customer sales
representative

Vendors
PREPRESS DEPT

Accounting

Receiving
PRINTING DEPT

Warehouse
COLLATING
DEPT

Information flow
Material flow

GLUING, BINDING,
STAPLING, LABELING

POLYWRAP DEPT

SHIPPING
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Figure 7.2
7 – 11


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
© 2006 Prentice Hall, Inc.

7 – 12


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
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7 – 13


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 – 14


Process Focus
Print Shop

Many
inputs

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High
variety
of
outputs

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
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7 – 16


Repetitive Focus
Automobile Assembly Line

Modules

combined
for many
output
options

Raw
materials
and
module
inputs

Few
modules
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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
Bottling Plant

Many
inputs

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Output
variation
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

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7 – 21


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
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7 – 22


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

Repetitive
Focus
(Modular)

Product Focus
(High-volume,
low-variety)

Mass
Customization
(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 7.2
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7 – 23


Comparison of Processes

Process
Focus
(Low volume,
high variety)

Repetitive
Focus
(Modular)

Product Focus
(High-volume,
low-variety)

Mass
Customization
(High-volume,
high-variety)

Raw material
inventories
high

JIT
procurement
techniques
used

Raw material
inventories
are low

Raw material
inventories
are low

Work-inprocess is
high

JIT inventory
techniques
used

Work-inprocess
inventory is
low

Work-inprocess
inventory
driven down
by JIT, lean
production
Table 7.2

© 2006 Prentice Hall, Inc.

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)

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 7.2
© 2006 Prentice Hall, Inc.

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