Operation management 10e heizer render chapter 07

Process, Volume, and VarietyProcess Focus projects, job shops machine, print, carpentry Standard Register Repetitive autos, motorcycles Harley-Davidson Product Focus commercial baked goo

Outline – Continued

Outline – Continued

(AISs) and RFID

Outline – Continued

Systems (ASRSs)

(FMSs)

(CIM)

Learning Objectives

When you complete this chapter you

should be able to:

different processes

process design

production technology

Dell Computer Company

Mass customization provides a

competitive advantage

product design allow responsiveness

business

make installation and configuration of its PCs fast and simple

Process, Volume, and Variety

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

Standard Register

Repetitive (autos, motorcycles)

Harley-Davidson

Product Focus (commercial baked goods, steel, glass)

Dell Computer

Poor Strategy (Both fixed and variable costs are high)

Low Volume Repetitive Process Volume High

Volume

Figure 7.1

Within these basic strategies there are

many ways they may be implemented

making planning and scheduling a challenge

Process Focus

Many

inputs

Many variety

of outputs

Process Flow Diagram

Information flow Material flow

COLLATING DEPT STAPLING, LABELING GLUING, BINDING,

POLYWRAP DEPT SHIPPING

PRINTING DEPT

PREPRESS DEPT

Vendors Receiving Warehouse

Purchasing

Customer Customer sales representative

Repetitive Focus

assembly lines

and assemblies made previously

output options

process-focused facilities but more efficient

Few modules

Automobile Assembly Line

Process Flow Diagram

THE ASSEMBLY LINE

TESTING

28 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

on a JIT arrival schedule

Engines and transmissions

Frame tube

bending Frame-building work cells machining Frame frame painting Hot-paint

Crating

Figure 7.3

Product Focus

products

enable efficient processes

variable cost

Product Focus

Few

inputs

Output variations

in size, shape, and packaging

Continuous Work Flow

Hot tunnel furnace - 300 ft

Hot mill for finishing, cooling, and coiling

D

G H

I

Scrap steel

Ladle of molten steel

Electric furnace

A

B C

Mass Customization

goods and service to satisfy increasingly unique customer desires

flexibility of a process focus with the efficiency

of a product focus

Mass Customization

Mass Customization

Effective scheduling techniques

Rapid throughput techniques

Repetitive Focus

Flexible people and equipment

Comparison of Processes

Process

Focus (Low volume,

high variety)

Repetitive Focus (Modular)

Product Focus (High-volume, low-variety)

Mass Customization (High-volume, high-variety)

Large quantity, small variety of

products

Large quantity, large variety of

Special purpose equipment

Rapid changeover

on flexible equipment

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

Few work orders and job instructions because jobs standardized

Custom orders require many job

instructions

Table 7.2

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-in-process is

high

JIT inventory techniques used

process inventory is low

process inventory driven down

Work-in-by JIT, lean production

Comparison of Processes

Process

Focus (Low volume,

high variety)

Repetitive Focus (Modular)

Product Focus (High-volume, low-variety)

Mass Customization (High-volume, high-variety)

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 build-to-order (BTO)

Table 7.2

Comparison of Processes

Process

Focus (Low volume,

high variety)

Repetitive Focus (Modular)

Product Focus (High-volume, low-variety)

Mass Customization (High-volume, high-variety)

a variety of modules to forecasts

Relatively simple scheduling, establishing output rate to meet forecasts

Sophisticated scheduling required to accommodate custom orders

Comparison of Processes

Process

Focus (Low volume,

high variety)

Repetitive Focus (Modular)

Product Focus (High-volume, low-variety)

Mass Customization (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

experience

High fixed costs mean costs

dependent on utilization of capacity

High fixed costs and dynamic variable costs make costing

a challenge

Table 7.2

Crossover Charts

Fixed costs

Variable costs

$

Repetitive Process B

Fixed costs

Variable costs

$

Low volume, high variety

Process A

Fixed cost Process A Fixed cost Process B Fixed cost Process C

To ta

l c os t

st Tota l co

st

400,000 300,000 200,000

$

Focused Processes

 Focus brings efficiency

 Focus on depth of product line

rather than breadth

Changing Processes

transformation strategy for an extended period

Process Analysis and

Design

of materials

and time frame

and time and value added beyond the immediate organization

key activities

customer/provider interaction

“Baseline” Time-Function Map

Process order

Wait

“Target” Time-Function Map

Extrude

Wait Print

Order product

Process order

Wait

6 days

Figure 7.7

Value-Stream Mapping

Process Chart

Figure 7.9

Service Blueprint

provider interaction

management issues

Notify customer the car is ready

Customer departs Customer pays bill

F F

an alternative provider

Customer arrives for service

Warm greeting and obtain service request

Prepare invoice

Yes Yes

F F

Standard request

Determine specifics

No

Can service be done and does customer approve?

F F

Process Analysis Tools

big picture

and a time element

customers and suppliers

customer interaction

Service Factory Service Shop

Mass Service Professional Service

Service Process Matrix

Commercial banking

Private banking

purpose law firms

General-Law clinics

Specialized hospitals

Hospitals

Full-service stockbroker

Limited-service stockbroker

Retailing

Boutiques

Warehouse and catalog stores restaurants Fast-food restaurants Fine-dining

Airlines

No-frills airlines

Figure 7.11

Service Process Matrix

Mass Service and Professional Service

Service Factory and Service Shop

process technology and scheduling

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 7.3

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

Strategy Technique Example

Automation Separating services

that may lend themselves to automation

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 7.3

Improving Service

Processes

education, product enhancement

Equipment and Technology

processes

 Automated guided vehicles (AGVs)

 Flexible manufacturing systems (FMSs)

Machine Technology

Automatic Identification

Systems (AISs)

of process automation

Example – Bar codes and RFID

Process Control

for process evaluation

Process Control Software

the same tasks

Automated Storage and Retrieval Systems (ASRSs)

withdrawal of parts and products

test areas of manufacturing firms

Automated Guided Vehicle

Flexible Manufacturing

Systems (FMSs)

and the material handling equipment

Computer-Integrated Manufacturing (CIM)

systems

 Backwards to engineering and inventory control

 Forward into warehousing and shipping

 Can also include financial and customer service areas

low-volume/variety, and volume/low-variety production

Technology in Services

Service Industry Example

Financial

Services Debit cards, electronic funds transfer, ATMs, Internet stock trading

Education Electronic bulletin boards, on-line journals,

WebCT and Blackboard

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

Technology in Services

Service Industry Example

Hotels Electronic check-in/check-out, electronic

key/lock system

Wholesale/retail

trade ATM-like kiosks, point-of-sale (POS) 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

Process Redesign

processes to bring about dramatic improvements in performance

process and questioning both the purpose and the underlying assumptions

process and its objectives

functional lines

Ethics and Environmentally

Friendly Processes

Reduce the negative impact on the

environment