Transcript Processes, Technology, and Capacity

Chapter 6, Part 1
Processes, Technology, and Capacity
Operations Management - 5th Edition
Roberta Russell & Bernard W. Taylor, III
Copyright 2006 John Wiley & Sons, Inc.
Beni Asllani
University of Tennessee at Chattanooga
Process Selection - Manufacturing
 Projects

one-of-a-kind production of a product to customer order
 Batch production

systems process many different jobs through the system in
groups or batches
 Mass production

produces large volumes of a standard product for a mass
market
 Continuous production

used for very-high volume commodity products
 See pages 40-44, 223-227, and Table 6.1
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Product-Process Matrix (2)
 For traditional manufacturing processes,
high flexibility results in high unit costs
 It is not cost-effective to use mass production
or continuous processes for low-volume
products
 Newer processes (Just-in-time and flexible
manufacturing systems reduce the cost
penalty for product variety)
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Service Strategy:
Processes and Technology
 Professional Service

highly customized and very labor intensive
 Service Shop

customized and labor intensive
 Mass Service

less customized and less labor intensive
 Service Factory

least customized and least labor intensive
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Process Analysis
 Process flowcharts (also called process
charts)


Symbolic representation of processes
Incorporate
nonproductive activities (inspection,
transportation, delay, storage)
 productive activities (operations)

 See Figures 6.4, 6.5, 6.6
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Flow Chart
and Process Chart Symbols
 Oval – People or goods enter or exit
the process.
 Rectangle – used for an operation – a
step that adds value. At least 1 arrow
in. Only one arrow out.
 Triangle pointing down - inventory
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Flow Chart
and Process Chart Symbols (2)
 Diamond – used for a decision – must
have at least 2 possible outcomes.
For each outcome, there must be one
arrow from the symbol. Each arrow is
labeled with its outcome.
 See Figures 6.4-6.10
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Principles for Redesigning
Processes
 Remove waste, simplify, and consolidate
similar activities
 Link processes to create value
 Let the swiftest and most capable enterprise
execute the process
 Flex process for any time, any place, any way
 Capture information digitally at the source and
propagate it through process
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Principles for Redesigning
Processes (cont.)
 Provide visibility through fresher and richer
information about process status
 Fit process with sensors and feedback loops
that can prompt action
 Add analytic capabilities to process
 Connect, collect, and create knowledge around
process through all who touch it
 Personalize process with preferences and
habits of participants
 See Figures 6.7-6.10
Copyright 2006 John Wiley & Sons, Inc.
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Make-or-Buy Decisions
 Compare your capabilities with those of
potential suppliers







Cost
Capacity
Quality
Speed
Dependable delivery and reliability
Design expertise
Production expertise
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Make-or-Buy Decisions (2)
 Do not outsource a core competency
 Be cautious about revealing proprietary
technology
 Build long-term, mutually beneficial
relationships with suppliers
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Sourcing Continuum
Vertical
Integration
(100%
ownership)
Joint
Venture
(equity
partner)
Strategic
Alliance
(long-term
supplier
contract;
collaborative
relationship)
Arms-Length
Relationship
(short-term contract
or
single purchasing
decision)
Source: Adapted from Robert Hayes, Gary Pisano, David Upton, and
Steven Wheelwright, Operations Strategy and Technology: Pursuing
the Competitive Edge (Hoboken, NJ: 2005), p. 120
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