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Business Processes

BA 339

Mellie Pullman

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Littlefield Login

Buy your code this week! Log onto:

http://lt.responsive.net/lt/pdx/start.html Enter “dollars” It will ask for your team name & password

must consist only of numbers and lower case letters

must not contain spaces or punctuation

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After Game has started

Oct. 8 at 5 PM, you will then logon with: http://lt.responsive.net/lt/pdx/entry.html

We will look at the running factories on October 10 in class but you can make changes as soon as it starts on October 8.

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Process Analysis Terms Process: Is any part of an organization that takes

inputs and transforms them into outputs. Cycle Time: Is the average time needed to

complete a business process. Utilization: Is the ratio of the time that a resource

is actually activated relative to the time that it is available for use.

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Process Throughput RateProcess Throughput Rateor Flow or Flow Rate Rate RR

Number of jobs (or customers) that flow through the system per unit of time. Cakes per hour Kitchen orders per shift Drive-in customers per day

Process Throughput rate R = 1 .

Takt Time

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Bottleneck

Slowest activity or operation in system. Sets the pace for throughput rate of system.

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Process Choice & Layout

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Process Types(in order of decreasing volume)

Continuous Flow

Production Line

Batch (High Volume)

Batch (Low Volume)

Job Shop

Project

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Continuous Flow

Large production volumes

High level of automation

Basic material passed along, converted as it moves

Usually very high fixed costs, inflexible

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Production Line

High-volume production of standard products or “design window”

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Job Shop

• Low volume, one-of-a-kind products• Job shops sell their capability

• Highly flexible equipment, skilled workers• Equipment arranged by function

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Batch I

• Somewhere in between job shop and line processes

• Moderate volumes, multiple products

• Production occurs in “batches”

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Batch II

Layout is a cross between that found in a line and that found in a job shop:

Group Technology

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Project

Used when a product is: one-of-a-kind too large to be moved

Resources moved to where needed Equipment, people, etc. are highly flexible Finite duration, often with deadline

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Mixing Together the Process Types ...

Spindles

Arms andLegs

SeatsBATCH forfabricatingparts ...

ASSEMBLYLINE forputting togetherfinal product

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Choosing a Process type

Job Shop Batch Line

Volume

Variety

Skills

Advantage Flexibility Price and Delivery

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Product – Process Matrix

One of a Kind Low Volume

Multiple Products Moderate Volumes

Few Major ProductsHigh Volume

Commodity Products

Job Shop

Batch

Line Very Poor Fit

Very Poor Fit

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What is “Customization”?

An operations-centric view:

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Customization Models

DESIGNSOURCINGMATERIALS

FABRICATIONASSEMBLY/FINISHING

DISTRIBUTION

ETO MTO MTSATO

Definitions:

ETO – engineer to order

MTO – make to order

ATO – assemble-to-order

MTS – make to stock

Upstream: before the customization point, “off-line” activities

Downstream: after the customization point, “on-line” activities

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Make-to-Stock

Planning Issues When, how much, and

how to replenish stock at location

Success Balancing level of

inventory against level of service

Other examples?

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Assemble-to-Order

Success comes from: Flexible

Engineering design

Modularity

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ATO Planning Issues

Options configurations (Smart Car) 8 different colors 2 different trims 2 different seats

Possible combinations?

Less finished good inventory & waste than MTS

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Make-to-order or Engineer-to-order

The Joinery

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Difficulty versus Customization

BASEBALL CAP WITHSCHOOL NAME ON IT

(MTO)

BASEBALL CAP WITHARKANSAS RAZORBACKS

LOGO AND SCHOOLCOLORS ON IT

(ETO)

PLAIN BASEBALL CAP(MTS)

PLAIN BASEBALL CAP INDIFFERENT COLORS

(ATO)

LOWER DIFFICULTY HIGHER DIFFICULTY

MANUFACTURING VIEW

MARKETING VIEW

LOWER CUSTOMIZATION

HIGHER CUSTOMIZATION