Transcript Chapter 1. Introduction

Chapter 6. Flexibility and Speed
Outline
Flexibility and Customization in Processes
Four Faces of Customization
Measures of Performance: Lead-Time/Speed
Production approaches in manufacturing
Production approaches in services
Designing flexibility in Business Processes
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Flexibility and customization in processes
Flexibility is a qualitative (and sometime quantitative)
measure of the ability of a process to deliver a variety of
products and services.
Flexibility can also be a measure of the variety of
flow/process alternatives
Flexibility: product and process customization.
Product customization: ability of a process to create
product that meet specific customer requirements
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The Four Faces of Customization
HBR Article by Gilmore and Pine
Change
Transparent
Collaborative
Adaptive
Cosmetic
No Change
Change
Product
No Change
Representation
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 Adaptive: customized by
the customer. Flexibility in
the product
 Collaborative: Customer
selects options
 Transparent:
customization is unknown
to the customer
 Cosmetic: same product,
representation is modified
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Measure of performance: Lead-Time/Speed
Delivery speed (and time to market for new products) is the
predicted order winner for the next decade.
Fast development speed means first to market - which in
most cases means a larger market share, lower
development cost, and the use of newer technology
Delivery speed is based on the difference between the time
an order is made and the time it is delivered.
L = Delivery time - order time
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Production approaches in manufacturing
High
JOB SHOP
BATCH SHOP
MASS CUSTOMIZATION
FLOW SHOP
Flexibility,
Customization,
Item Cost
ASSEMBLY LINE
Who Wants to be here?
CONTINUOUS PROCESSES
Low
Low
High
Efficiency, Volume
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Production approaches in manufacturing
Job Shop
C
A
General purpose equipment
High variety of product types
(customization)
Start
D
B
End for Y
Product X
Product Y
E
End for X
Assembly Line
Specialized equipment
Low variety (very limited
possibility to customize)
A
Start
B
C
D
End
Product X
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Production approaches in manufacturing
Mass Customization
Specialized equipment designed to allow customization
High variety of products/options
D
Product H
Start
Product F,G,H
A
Product F
B
C
Product G
E
End for H
E
End for F
End for G
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Production approaches in services
High
INDIVIDUAL CUSTOMIZATION
MASS CUSTOMIZATION
Flexibility,
Customization,
Item Cost,
Customer Involvement
AUTOMATED/SELF SERVICE
COOKIE CUTTER
Low
Low
High
Efficiency, Volume
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Production approaches in services
Individual Customization
Priority is flexibility and attention to customer needs
Low utilization of resources and hard to control processes
Cookie Cutter
Counterpart to assembly line - very limited flexibility
High utilization of resources is expected; processes are designed
for high efficiency
Automated/Self Service
Design of the system can allow for a flexibility focus, cost
minimization focus, ... MAN 3504 - Chapter 6
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Designing Flexibility in Business Processes
Factors that help the customization process
Customer Input (use of IT)
Customer education on the customization options
Have built in Poka Yoke - error prevention and resolution
mechanisms
Record preferences
Analyze preferences and modify the system to better serve
those, speed up the process.
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Designing Flexibility in Business Processes
Product Design
Design products with customization as an inherent
characteristic
Design should follow one of the customization types
Cosmetic - design options in the way it is packaged or finished
Collaborative - multiple features
Adaptive - allows customer modifications - prevent customer from
making mistakes
Transparent - designs that are customizable, but in such a way that it
is not easily noted
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Designing Flexibility in Business Processes
Postponement: Based on the idea that customization process
should be delayed as much as possible
Customer Specifications
Raw Materials
Activity 1
ST = 3 hrs
Cost = $120
Activity 2
ST = 6 hrs
Cost = $190
Activity 3
ST = 30 min
Cost = $50
Customized
Product
Ready
Customer Specifications
Raw Materials
Activity 1
ST = 2 hrs
Cost = $100
Activity 2
ST = 5 hrs
Cost = $140
Waiting area
Activity 3
ST = 1 hr
Cost = $90
Postponement point
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Customized
Product
Ready
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Designing Flexibility in Business Processes
Flexible processes and workers
Employee Training
Empowerment
Information Technology
Team oriented decision making
Job Design
Specialization versus Cross-trained
Vertical growth versus Horizontal growth
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