Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-8
Process
• A collection of tasks, connected by flows of goods and information, that transforms various inputs into more valuable outputs
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-8 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Process Flow Diagram
• Tasks are rectangles
• Flows are arrows
• Inventory is inverted triangle
• Decision point is diamond
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-8 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Process Flow Diagram
• May show non-value added steps
• Process improvement
• Capacity calculations
Production Process Flow Diagram
Shipping
Customer
Customer sales representative
take order
Prepress Department(Prepare printing plates
and negatives)
Printing Department
Collating Department
Gluing, binding, stapling, labeling
Polywrap Department
Purchasing(order inks, paper,
other supplies)
Vendors
Receiving
Warehousing(ink, paper, etc.)
Accounting
Information flowMaterial flow
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-8 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Process Strategies
• Involve determining how to produce a product or provide a service
• Objective• Meet or exceed customer requirements• Meet cost & managerial goals
• Has long-run effects• Product & volume flexibility• Costs & quality
Types of Process Strategies
ContinuumContinuum
• Process strategies that follow a continuum• Within a given facility, several strategies
may be used• These strategies are often classified as:
Repetitive-Focused
Product-FocusedProcess-Focused
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-11 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Process-Focused StrategyJob Shop
Facilities are organized by processSimilar processes are together
Example: All drill presses are together
Low volume, high variety products‘Jumbled’ flow
OperationProduct A
Product B
1111 2222 3333Other names
Intermittent process Job shop
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-12 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Process-Focused Strategy Examples
Bank
© 1995 Corel Corp.
Machine Shop© 1995 Corel Corp.
Hospital© 1995 Corel Corp.
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-13 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Process Focused Strategy -Pros & Cons
• Advantages• Greater product flexibility
• More general purpose equipment
• Lower initial capital investment
• Disadvantages• More highly trained personnel
• More difficult production planning & control
• Low equipment utilization (5% to 25%)
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-14 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Batch Strategy
• Facilities often organized in a line• Product is made in batches• Allows for many output options
• Examples: beer, soup, paint, medicines
• AKA Disconnected repetitive
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-15 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Batch Strategy -Considerations
• Allows for greater variety of product
• Gains some cost efficiencies
• More structured than process-focused, less structured than repetitive
• Capacity is set by size of batch process
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-14 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Repetitive Focused Strategy
• Facilities often organized by assembly lines• Characterized by modules
Parts & assemblies made previously
• Modules combined for many output options
• Other names Assembly line Production line Flow shop
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-16 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Repetitive-Focused Strategy - Examples
Truck
© 1995 Corel Corp.
Clothes Dryer
© 1995 Corel Corp.
Fast Food
McDonald’sover 95 billion served
McDonald’sover 95 billion served
© 1984-1994 T/Maker Co.
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-15 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Repetitive Focused Strategy -Considerations
• 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
• Less variety• Change in volume difficult
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-17 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Product-Focused Strategy
Facilities are organized by productHigh volume, low variety productsWhere found
Continuous process manufacturing Commodities
Operation
Products A & B
11 22 33
Other names Line flow production Continuous production
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-19 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Product-Focused Examples
© 1995 Corel Corp.
Light Bulbs (Discrete)
Paper (Continuous)
© 1984-1994 T/Maker Co.
© 1995 Corel Corp.
Soft Drinks (Continuous, then Discrete)
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-18 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Product-Focused Strategy Pros & Cons
• Advantages Lower variable cost per unit Lower but more specialized labor skills Easier production planning and control Higher equipment utilization (70% to 90%)
• Disadvantages Lower product flexibility More specialized equipment Usually higher capital investment
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-15 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Product-Process Examples
• Auto industry• Prototype to high volume manufacturing
• Food prep• Dream Dinners example for batch
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-15 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Product-Process Examples
• Auto industry• Prototype to high volume manufacturing
• Food prep• Dream Dinners example for batch
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-15 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Product-Process Examples
• Auto industry• Prototype to high volume manufacturing
• Food prep• Dream Dinners example for batch
End
Fit of Process, Volume, and Variety
Process focusprojects, job shops,
(machine, print, carpentry)
Standard Register
Repetitive(autos, motorcycles)
Harley DavidsonProduct focus
(commercial baked goods, steel, glass)
Nucor Steel
High VarietyOne or few units per run, high variety(allows customization)
Changes in modulesModest runs, standardized modules
Changes in attributes (such as grade, quality, size, thickness, etc.) Long runs only
Mass Customization
(difficult to achieve, but huge
rewards)
Dell Computer Co.
Poor strategy
(Variable costs are high)
Low-Volume(Intermittent)
Repetitive Process(Modular)
High-Volume(Continuous)
Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-24 © 1998 by Prentice Hall, Inc.
A Simon & Schuster CompanyUpper Saddle River, N.J. 07458
Volume and Variety of Products
Poor Strategy(Fixed costs and cost changing to other products
are high)
Volume andVariety ofProducts
Low Volume HighVariety Process
(Intermittent)
RepetitiveProcess
(Modular)
High VolumeLow Variety
Process(Continous)
One or very fewunits per lot
Projects
Very small runs, highvariety
Job Shops
Modest runs, modestvariety
DisconnectedRepetitiveBatch
Long runs, modestvariations
ConnectedRepetitive
Very long runs,Changes inattributes
Continuous
Equipment utilization 5%-25% 20%-75% 70%-80%
Poor Strategy(High variable
costs)
Work Cells
• Used when volume warrants a special arrangement of equipment
• Take people and machines ordinarily dispersed
• Arrange in a small group to focus on production of single product or group of related products
Work Cells
• A temporary assembly-line-oriented arrangement of machines and personnel in what is ordinarily a process-oriented facility
• Example: job shop with rearranged machinery and personnel to produce 30 unique control panels
Work Cells — Some Advantages• Reduced work-in-process inventory
• Less floor space required
• Reduced raw material and finished goods inventories required
• Reduced direct labor costs
• Heightened sense of employee participation
• Increased utilization of equipment machinery
• Reduced investment in machinery and equipment
Note: Green & Sadowski report increased capital investment and lower machine utilization
TM 10 - 10