3-1 McGraw-Hill/Irwin Operations Strategy Copyright © 2008 The McGraw-Hill Companies, Inc. All...

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3-1 McGraw-Hill/Irwin Operations Strategy Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserve Process Technology Chapter 3

Transcript of 3-1 McGraw-Hill/Irwin Operations Strategy Copyright © 2008 The McGraw-Hill Companies, Inc. All...

Page 1: 3-1 McGraw-Hill/Irwin Operations Strategy Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Process Technology Chapter 3.

3-1McGraw-Hill/IrwinOperations Strategy Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Process Technology

Chapter 3

Page 2: 3-1 McGraw-Hill/Irwin Operations Strategy Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Process Technology Chapter 3.

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Process technology strategy addresses several issues

Experience and learning Matching technology to business needs

Product-process and service-process matrix Impacts of new technologies Innovator or followerOutsource or insourceAutomation

Centralization and Standardization

Page 3: 3-1 McGraw-Hill/Irwin Operations Strategy Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Process Technology Chapter 3.

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Process Technology: In Manufacturing Companies

Sources: Left photo: Reprinted with permission from Dallas Auto Painting & Collision Repair.Right photo: Reprinted with permission from Carnegie Mellon University, Biorobotics Lab.

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Process Technology: In Manufacturing Companies

Source: Reprinted with permission from General Motors Corporation.

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Process Technology: In Manufacturing Companies

Source: Reprinted with permission from Scharffen Berger Chocolate Maker.

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Process Technology: In Service Companies

Source: Reprinted with permission from Amazon.com.

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Process Technology: In Service Companies

Source: Reprinted with permission from Vanderlande Industries.

Page 8: 3-1 McGraw-Hill/Irwin Operations Strategy Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Process Technology Chapter 3.

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The Experience and Learning Curves

Experience: Relationship between unit cost and total number of units produced

Learning: Relationship between total labor hours and total number of units produced

Page 9: 3-1 McGraw-Hill/Irwin Operations Strategy Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Process Technology Chapter 3.

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The Experience Curve: Strategic implications

Understanding and capitalizing on sources Improved labor efficiency Process yields and improvements Increased standardization, specialization Process automation Product or service redesign Increased scale or volume Improved value chain performance Shared experience effects

Distinguishing between human resource and capital sources of improvement

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Sources of improvement: ITT example

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Example from Boeing

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The Experience Curve: Competitive Effects

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Page 13: 3-1 McGraw-Hill/Irwin Operations Strategy Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Process Technology Chapter 3.

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Process technology strategy addresses several issues

Experience and learning Matching technology to business needs

Product-process and service-process matrix Impacts of new technologies Innovator or followerOutsource or insourceAutomation

Centralization and Standardization

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Matching technology to business needs Types of manufacturing processes

Project Job Shop Batch Repetitive or continuous flow Mass customization

Types of service processes Demand-sensitive services

e.g., banks, restaurants, retail stores Delivered services

e.g., fire and police protection Quasi-manufacturing

e.g., banks’ back offices, call centers

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Product-Process Matrix: Matching Processes to Product Needs

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Product-Process Matrix: Mapping to Product Requirements Over Time

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Service-Process Matrix: Adaptation of Product-Process Matrix

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Service-Process Matrix: Labor Intensity, Interaction and Customization

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Impacts of new technologies Incremental improvements in efficiency, quality, etc. Degree of flexibility

FMS systems Modularity Postponement Set-up time reduction Lean concepts

Major changes in business model Skill levels Scale inconsistent with plant network

Risks in both adoption and in not adopting

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Managing Process Technology in the Face of Dynamic Change

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Technology Choices: Innovate or Follow, Develop In-House or Outside

Innovation: Relationship of process and product innovation

Outsourcing: Use VI framework Importance of technology in competitive position Market impact of technology leader

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Factors in automation Business issues such as flexibility and fit with

strategy Operational issues such as repeatability and precision

and effect on performance drivers such as time to market (e.g Pharmaceutical)

Regulatory issues Social issues such as technological environment and

workforce implications Labor costs Sources of improvement and performance drivers

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Process technology strategy addresses several issues

Experience and learning Matching technology to business needs

Product-process and service-process matrix Impacts of new technologies Innovator or followerOutsource or insourceAutomation

Centralization and Standardization

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Intel and copy exactly

Run multiple sites identically to lead plant Process parameters Equipment sets Maintenance Training Specifications/documentation

Started when fab start-up yields lagged behind development fabs

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Copy exactly requires additional structure

Structure Joint engineering teams and control boardsSenior management reviewProblem is problem for entire team

Issues?

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Standardization factors

Product standardization (does it vary by market)

Stability of technology (do new technologies leapfrog or evolve)

Basis for learning (technology or worker based)

Levels of volume (eg cars in Brazil) Ranges of technologies and impact of labor

(can you use manual at low volumes)

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Process Technology Strategy Development Approach

Understand the business strategy and competitive environment

Understand the technology trends in the industry Understand the internal capabilities of the

organization Identify and assess process technology investment

alternatives, including multi-plant and automation options, outsourcing, etc.

Develop an implementation plan Implement, assess and measure benefits


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