Lecture Introduction to operations management - Chapter 4: Process selection

In this chapter we will discuss: Product-flow characteristics, approaches to order fulfillment, product-process strategy, focused operations, mass customization, environmental concerns, cross-functional decision making.

INTRODUCTION

to Operations Management

Assembly Line Flow

(metal bracket, see Fig 4.1)

paint drill bend

Task or work station

cut

Approaches to Order Fulfillment

Make­to­Stock (MTS)

Make­to­Order (MTO)

Assemble­to­Order (ATO)

MTS and MTO Comparison

Characteristics Make­to­Stock Make­to­Order

Low variety Inexpensive

Customer­specified High variety

Customer Order

Product

customer

Production Product

Customer Order

Assemble­to­Order  (Figure 4.3)

customer

Forecast orders

Production of Subassemblies

Inventory

of Subassemblies

Customer order Product

Assembly of the Order

Subassembly

(Figure 4.4)

Distribution Assembly

Fabrication Supplier

MTO MTO ATO MTS

∇­­­­­­­­­­­­­­­­­­∇      ∇ ∇

Process Selection Decisions

Process Characteristics Matrix (Table 4.3)

Characteristics  Make­to­Stock  Make­to­Order  ATO 

Continuous and 

Assembly 

Line Flow 

Auto Assembly Line  Oil refinery 

Cannery  Cafeteria 

Auto assembly line  Dell Computers  Motorola Pager  Fast Food 

Batch and Job Shop 

Machine shop  Fast food 

Glassware factory  Costume Jewelry 

Machine shop  Restaurant  Hospital  Custom jewelry  Project 

Speculation homes  Commercial painting  Buildings Movies 

Product Life Cycle Stages

Process Life Cycle Stages

PRODUCT­PROCESS MATRIX  (Figure 4.5)

Low volume,  low 

standardization

Printing

Heavy Equipment

Auto assembly

Sugar

Low volume,

Multiple  products

Higher volume

few major  products

High volume, high standardization, commodity 

Project

Building

Forms of Mass Customization

Modular production & ATO (e.g. Dell)

Fast changeover (e.g. Motorola)

Postponement of options (e.g. Hewlett­

Packard)

Cross-Functional Decision Making

or, who has a stake in process choice?

Marketing wants fast response to customer demandFinance must find the funds to configure the 

process

HR must provide the properly skilled workers

IT must serve different data requirements

Accounting must be flexible in setting performance measures

End of Chapter Four