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Process Strategies, Analysis and Design

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lydda papag

on 5 July 2010

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Transcript of Process Strategies, Analysis and Design

Double click anywhere & add an idea Process Strategies, Analysis and Design Process Strategy Involves determining how to produce a product or provide a service

Meet or exceed customer requirements
Meet cost and managerial goals

Long Run-Effects:
Product and volume flexibility
Cost and quality Types of Process Strategies Process Strategies that follow a continuum

Within a given facility, several strategies may be used

These strategies are often classified as:
Process focus
Repetitive focus
Product focus
Mass Customization

Process-Focused Strategy Facilities are organized by process
Similar processes are together
Low volume, high variety of products

Other names:
Intermittent process
Job shop

Greater product flexibility
More general purpose equipment
Lower initial capital investment

High variable costs
More highly trained personnel
More difficult production planning and control
Low equipment utilization (5% - 25%)
Product-Focused Strategy Facilities are organized by product
High volume, low variety of products

Where found:
Discrete unit manufacturing
Continuous process manufacturing

Other names:
Line flow production
Continuous production
Lower variable cost per unit
Lower but more specialized labor skills
Easier production planning and control
Higher equipment utilization (70% - 90%)

Lower product flexibility
More specialized equipment
Usually higher capital investment
Repetitive-Focused Strategy Facilities often organized as assembly lines
Characterized by modules
Modules combined for many output options
Low volume, high variety of model

Other names:
Assembly line
Production line
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
Mass Customization Strategy Using technology and imagination to rapidly mass-produce products that cater to unique customer desires
The three process models become so flexible that distinctions between them blur, making variety and volume issues less significant
Process Strategies Summary Process, Volume, Variety Crossover Charts Crossover Chart Sample Problem

Kleber Enterprises is evaluating three accounting software
products (A, B and C) to support changes in the internal
accounting processes. The costs of the software for these
processes are:
This means that Software A is most economical from
0 reports to 2,857 reports which is V1

Software B is most economical if the number of reports
is between 2,857 to 6,666 which is V2

Software C is most economical if reports exceed 6,666
Focused Process In an ongoing quest for efficiency, industrialized societies continue to move toward specialization
The focus that comes with specialization contributes to efficiency
Managers who focus on a limited number of products, activities, and technologies do better

The focus can be on:
Product families

Changing Process Choosing where to operate in the process strategy continuum may determine the transformation strategy for an extended period
Changing the production system from one process model to another is difficult and expensive
In some cases, the change may mean starting over

Changes may be necessary on:
Quality standards

Process Analysis and Design The method by which an organization understands and defines the activities that enable it to function
Ensures that processes are optimized, effective, meet customer requirements
Support and sustain organizational development and growth by:
focusing on increasing productivity
eliminating the risk of losing value through inefficient or inappropriate activities
Well designed processes improve efficiency and deliver great productivity
Guidelines Is the process designed to achieve competitive advantage in terms of differentiation, response, or low cost?
Does the process eliminate steps that do not add value?
Does the process maximize customer value as perceived by the customer?
Will the process win orders?
Tools Commonly used to indicate the general flow of plant processes and equipment
Displays the relationship between major equipment of a plant facility
Does not show minor details such as piping details and designations
a.k.a. flow sheet
Useful way of recording the essential features of a work situation for subsequent analysis
A variety of process charts has been designed to meet the needs of a particular level or stage of analysis
They can be used at a detailed level, but also at the wider system, process or procedure level
The different kinds of process chart share a common core set symbols, though some have additional symbols for specific and specialized process steps
The common symbols were first promulgated by the American Society of Mechanical Engineers and have become known as the ASME symbols

Process Chart Symbols Charts the specific operations of the various division of a system with a timeline as backdrop
An expanded look at where value is added (and not added) in the entire production process, including the supply chain
A communication tool, strategic planning tool, and a change management tool
The goal of VSM is to identify, demonstrate, and decrease waste in the process
A detailed plan of action for an organization’s operations concerning services towards customers or other clients
Service Selection and Design Service Process Design Nature of Services

Everyone is capable of providing services
Services are idiosyncratic
Services are experienced, whereas goods are consumed
Most services contain a mix of tangible and intangible attributes that constitute a service package
Quality of work is not quality of service
Effective management of services requires an understanding of marketing and personnel, as well as operations
Services often take the form of cycles of encounters involving face-to-face, telephone, electromechanical, and/or mail interactions

Service Businesses

Requires interaction with the customer to produce the service
Ex. Airlines, hospitals law firms, restaurants

2 categories:
Facilities-based service
Field-based service
Internal Businesses

Required to support the activities of the larger organization
Customers are various departments within the organization
Ex. Data processing, accounting, engineering

High-contact Systems

High degree of customer contact
More difficult to control
More difficult to rationalize
Low-contact Systems

Can be organized according to the same principles used in designing a factory
Major Elements:
Identification of the target market [Who is our customer?]
Service content [How do we differentiate our service in the market?]
Service strategy [What is our service package and the operating focus of our services?]
Service delivery system [What are the actual processes, staff, and facilities by which the service is created?]
Major factors distinguishing service design and development from typical manufacturing development:
The process and the product must be developed simultaneously
A service operation itself lacks the legal protection commonly available to goods production
The services package, rather than a definable good, constitutes the major output of the development process
Many parts of the service package are often defined by the training individuals before they become part of the service organizations
Service Process Matrix Strategies Separation
Customers must go where service is offered
Ex. Bank with specific tellers for each transaction

Customers examine, compare, and evaluate at their own pace
Ex. Supermarket racks

Customizing at delivery
Ex. Customization of packages in pc shops

Restricting the offerings
Ex. Fast food chain menus

Modular selection of service
Ex. Insurance packages, food packages Automation
Separating services that lend themselves to automation
Ex. ATM machines, MRT ticket machines

Precise personnel scheduling
Ex. shifts

Clarifying the service options
Explaining problems
Improving employee flexibility
Ex. Cross training of employees to handle different jobs


Human Resources
Selection of Equipment & Technology Requires considering cost, quality, capacity
Can provide competitiveness
Most important attribute to be considered:

FLEXIBILITY: the ability to respond with little penalty in time, cost or customer value
Production Technology Machine Technology

Increased precision
Increased productivity
Increased flexibility
Improved environmental impact
Reduced changeover time
Decreased size
Reduced power requirements
Automatic Identification Systems (AIS)

Improved data acquisition
Reduced data entry errors
Increased speed
Increased scope of process automation Process Control

Is a statistics and engineering discipline that deals with architectures,
mechanisms, and algorithms for controlling the output of a specific process

Increased process stability
Increased process precision
Real-time provision of information for process evaluation
Data available in many forms
Vision Systems

Particular aid to inspection
Consistently accurate
Never bored
Modest cost
Superior to individuals performing the same tasks


Perform monotonous or dangerous tasks or those requiring significant strength or endurance
Enhanced consistency and accuracy

Automated Storage and Retrieval System (ASRS)

Automated placement and withdrawal of parts and products
Reduced errors and labor
Particularly useful in inventory and test areas of manufacturing firms
Automated Guided Vehicle (AGV)

Electronically guided and controlled carts
Used for movement of products and/or individuals
Helps to reduce cost of manufacturing and increase efficiency in a manufacturing system
Flexible Manufacturing System (FMS)

A means by which to manufacture a product
More of a philosophy rather than a tangible item
The idea that faster is better and uses machines to produce products
Rather than using humans to perform repetitive tasks, a machine is used to perform the tasks 24 hours a day
Computer controls both the workstation and the material handling equipment
Although fast and efficient, FMS is not cheap as it requires a lot of expensive machines in order to work; typically costs millions of dollars to introduce an FMS into a factory
Instead of using a complete FMS, most companies use part of an FMS called a flexible manufacturing cell
Enhance flexibility and reduced waste
Can economically produce low volume at high quality
Reduced changeover time and increased utilization
Stringent communication requirement between components

Faster, lower cost changes from one part to another
Lower direct labor costs
Reduced inventory
Consistent (and hopefully better) quality
Limited ability to adapt to product or product mix changes
Requires substantial preplanning and capital expenditures
Technological problems of exact component positioning and precise timing

Computer-Integrated Manufacturing (CIM)

Method of manufacturing in which the entire production process is controlled by computer
Relies on closed-loop control processes, based on real-time input from sensors
a.k.a Flexible Design and Manufacturing
Extension of flexible manufacturing systems
Backwards to engineering and inventory control
Forward into warehousing and shipping
Can also include financial and customer service areas
Reducing the distinction between low-volume/high-variety, and high-volume/low-variety production
Heavy reliance on information technology

Technology in Services The fundamental rethinking of business processes to bring about dramatic improvements in performance
Relies on reevaluating the purpose of the process and questioning both the purpose and the underlying assumptions
Requires reexamination of the basic process and its objectives
Focuses on activities that cross functional lines
Any process is a candidate for redesign
Process Reengineering (Redesign) Comparison of Process Choice Flow Diagrams Process Charts Time-Function Mapping Value-Stream Mapping Service Blueprint
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