Process Selection – UNIT 5
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Transcript of Process Selection – UNIT 5
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Process Selection unit 5
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Inputs:Product/Service InformationProduction System InformationOperations Strategy
Process Selection & Design:Process-Type SelectionVertical Integration Studies
Process/Product StudiesEuipment StudiesProduction Procedures Studies!acilities Studies
Outputs:
Process Tec"nology!acilitiesPersonnel Estimates
Process Selection and Design
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Process Selection and SystemDesign
Forecasting
Product and
Service Design
Technological
Change
Capacity
Planning
ProcessSelection
Facilities and
Equipment
Layout
Work
Design
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e process-focused Project ShopCharacteristics Unique products with certain complexity (boats, aircrafts, ships,
hotels, bridges, sports stadiums) he production process is managed li!e a pro"ect #a!es a one$of$a$!ind product (%olume & ') Uses general purpose equipment as informal relationships with many %endors ery little %ertical integration
*lexible layout often with factors of production mo%ing to "ob
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TheJob Shop+ process structure suited for low %olume production of a great %ariety
of non$standard products (highly customied products)-
Custom or wor!shop. /ow specialied operations carried out by thesame wor!er or group of wor!ers that follow up the whole processfor the order-
0atch. #ore specialied operations carried out by di1erentwor!ers or group of wor!ers (need for more specialiationand standardiation)-
Characteristics'- #a!es many products in small %olume2- Uses general purpose equipment, grouped by the same function in
3or! Centres4- as informal relationships with %endors5- ery little %ertical integration6- 7epartmentalied layout with chaotic 8ow
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The Large Batch (Cell,Flow Shopor Hybrd Shop!
+ process structure that produces a %ariety ofstandard products at relati%ely low %olumes-his %ariety of standard products has a similarsequence of operations.he equipment is laid out in line, instead ofgrouped by the same function-+fter completing one batch, equipmentad"ustments for the next one are made andthe next batch produced-
Characteristics'-#a!es se%eral families of products in
moderate %olume2-Uses general purpose equipment oftencustomied4-/ittle %ertical integration5-9imilar product follows the same path,produced in batches to reduce the impact of
setup time-6-ybrid layout with 8ow lines
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+ process structure designed to ma!e discrete parts- :artsare mo%ed through a set of specially designed
wor!stations at a controlled rate-Characteristics
'-#a!es few products in large %olume2-Uses specialied high$%olume equipment4-as formal relationships with %endors
5-#ay use %ertical integration6-:roduct$based layout with linear 8ow
"sse#bly L$e
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Continuous Flow+n often automated structure that con%erts
raw materials into ;nished products in onecontinuous process- 9ame operations are made in the same equipment
to ma!e the same product, reducing waiting time-
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Types of Processes *lexibility and Costs
0y :ro"ects
>ob 9hop
*low 9hop +ssembly /ine
Continuous
*lexibility
*ixed Costariable Cost
Unit Cost
+
- +
-
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Process Strategy in theindustry #anufacturing :rocess /ife Cycle
:rocesses go through di1erent phases as productsdo-
=nterdependency between :roduct and:rocess /ife Cycles. :rocess /ife Cycle. +1ects manufacturing costs,
quality and production %olumes, which a1ectssales %olumes-
:roduct /ife Cycle. =n8uences the type of
manufacturing process that can be economicallyand ;nancially "usti;ed-
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rocess ra egy n eindustry :roduct$:rocess #atrix
=-Continuous
*low
===-+ssembly
/ine
==-0atch
=->ob9hop
/owolume,
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Underlying Process elationship !etween"olume and Standardi#ation Continuum
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Di$erences %etween &ntermittentand Continuous 'perations
Decision &ntermittent 'peration Continuous 'peration
:roduct %ariety Ereat 9mall
7egree of standardiation /ow (igh
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(a)or Factors *$ecting ProcessSelection
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Degree of "ertical&ntegration ertical integration is the amount of the
production and distribution chain that isbrought under the ownership of a company-
his determines how many production
processes need to be planned and designed- 7ecision of integration is based on cost,a%ailability of capital, quality, technologicalcapability, and more-
9trategic outsourcing (lower degree of integration) isthe outsourcing of processes in order to react quic!erto changes in customer needs, competitor actions,and technology-
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Production Flei%ility
+ production process is more 8exible when theirequipment and human resources are able tomanage a wider %ariety of products, outputs,responsibilities and functions, at a reasonable cost
and time frame- :roduct 8exibility $$ ability of the production
(or deli%ery) system to quic!ly change fromproducing (deli%ering) one product (or
ser%ice) to another- olume 8exibility $$ ability to quic!ly
increase or reduce the %olume ofproduct( or ser%ice) produced (or deli%ered)-
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Degree of *utomation
+d%antages of automation =mpro%es product quality
=mpro%es product 8exibility
Aeduces labor and related costs
7isad%antages of automation @quipment can be %ery expensi%e
=ntegration into existing operations can be diFcult
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Factors a$ecting ProcessSelection Capital =n%estment
Combination of equipment and human resourcesat the manufacturing process-
he new manufacturing technologies pro%ide awide %ariety of a%ailable options.
+s the mechanical andGor automated operationsincrease, more capital is required-
#ost of the a%ailable options require a high capitalin%estment, which create a high ris! in case our sales%olumes (and therefore our production %olumes) are
lower than the expected-
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Factors a$ecting ProcessSelection Hature of the demand
#anufacturing processes ha%e to ha%e the necessary capacity tosupport the demand of products and ser%ices that the company isgoing to o1er-
9easonality, tendency and other characteristics of the demand aregoing to a1ect the capacity required o%er the time- 9ome processes are able to expand and contract more easily than others-
he ;nal selection of processes will be a1ected by the estimateddemand-
:rice. =f itIs high, consumers will tend to buy less and %ice %ersa-
o ;x the price, the company has to ta!e into account factors li!e
ad%ertising costs, sales force, ;nancial conditions, ser%ices pro%ided tothe customer, speci;c designs, in%entory and deli%ery policy, quality,etc-, at the same time than the costs related to manufacturing-
=t should be coordination between product price and process selection,due to the competiti%e ad%antages pro%ided by the di1erent types ofprocesses
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Factors a$ecting ProcessDesign Juality of the product or ser%ice
Juality is a competiti%e ad%antage in the currentbusiness en%ironment- he le%el of quality to be o1ered will a1ect directly the
selection of the production process-
he le%el required is directly related to the le%el of automation
of the process, since the automatic equipment manufacturesproducts with a high and consistent uniformity-
Customer participation
9er%ices that require higher contact with the customergenerally need less capital in%estment and ha%e more
8exibility- Customer presence normally a1ects the process
eFciency in a negati%e way, which increases cost-
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Factors a$ecting ProcessDesign he /earning e1ect
he wor!ing hours required per unit of product represent adecreasing function of the number of cumulati%e productionunits-
his reduction of wor!ing hours (and therefore cost) arebased on the gain of experience in design of products and
ser%ices, automation and capital in%estment, as well aschanges in methods and experience of the wor!ing force-
Companies competing in price try to ha%e highmanufacturing %olumes to ta!e ad%antage of the learninge1ect, and therefore ha%e a lower cost-
:roduction %olume
3or!ing
hoursper
unit
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B 2D 3iley
Designing Process Flow
:rocess design tools include :rocess 8ow analysis
:rocess 8owchart
7esign considerations include #a!e$to$stoc! strategy
+ssemble$to$order strategy
#a!e$to$order strategy
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B 2D 3iley
Process Design Tools
Process ,ow analysisis a tool used to analyeand document thesequence of steps withina total process- Usually
;rst step in :rocessAeengineering-
Process e-engineeringis astructured approachused when ma"orbusiness changes are
required as a result of. #a"or new products Juality impro%ement
needed 0etter competitors =nadequate
performance
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B 2D 3iley
Facility ayout and ProcessChoice
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'peration
!egin or end
&nformation
input
&nformationoutput
9hampoo directions'- /ather
2- Ainse4- Aepeat
:rocess 7ocumentation using *lowcharts
asic 8owchart symbols
@xample. +ny problems
with the followingset of directionsK
.uestionyes/no0
Shampoo0
!egin shampoo
inse hair withwarm water
ather shampoointo hair
Select %ottle
1et hair with
warm water
&nformation
on %ottle
2o
3es
4air
clean0
2ond shampoo
3es
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:rocess *low 7iagram (:*7)* process ,ow diagram is a mapping of the speci6c processes that raw materials7 parts7 and su%assem%lies follow as they mo8ethrough a plant9
0uilds on the concept of 8owcharting-
*cti8ity
* more constrained 8ersion of the operation sym%ol used in ,owcharting:9 e;uires a resource
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S$gle %bject Process Chart
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"sse#bly Process Chart Assembly charts
Disassembly charts
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"cto$ &ecso$ Flow &agra#
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4ow *re Ser8ices Di$erent from(anufacturing 9er%ices are di1erent from manufacturing
as theyL :roduce intangible products
=n%ol%e a high degree of customer contact
ype of ser%ice is classi;ed according todegree of customer contact
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Process Selection inSer8ices 9ome of the factors important in process
design for products are also important inser%ices. /e%el of customer contact
Hature (le%el and pattern) of customer demand
9er%icing 8exibility
7egree of automation
9er%ice quality
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Process Design in Ser8ices
hree schemes for producing and deli%eringser%ices /ow degree of customer contact $ Juasi$
#anufacturing
#edium degree of Customer contact M mixedser%ice
igh degree of customer contact M :ure ser%ice
Customer $as$:articipant
Customer$as$:roduct
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Process Design in Ser8ices
Juasi$#anufacturing :hysical goods are dominant o%er intangible
ser%ice
:roduction of goods ta!es place along a
production line
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Process Design in Ser8ices
Customer$as$:articipant :hysical goods may be a signi;cant part of the
ser%ice
9er%ices may be either standardied or custom
igh degree of customer in%ol%ement in theprocess
@xamples. +#, self$ser%ice gas station
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Process Design in Ser8ices
Customer$as$:roduct hrough personal attention to the customer
Customied ser%ice on the customer
igh degree of customer contact
here is a perception of high quality Customer becomes the central focus of the
process design
@xamples. ospital care, medical clinic, hairsalon
N$4O
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Ser8ice StrategyB Focus *d8antage
Ser8ice-System Design (atri
Ser8ice !lueprinting Ser8ice Fail-sa6ng Characteristics of a 1ell-Designed
Ser8ice Deli8ery System
OBJECTIVES
N$4D
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9er%ice 0usinesses
Facilities-%ased ser8icesB 1here the
customer must go to the ser8ice facility 4ospitals7 Schools/colleges7 *T(s
Field-%ased ser8icesB 1here the productionand consumption of the ser8ice ta@es place
in the customers en8ironment loan melas7census count7 water/electricity supply9
+ ser%ice businessis the management oforganiations whose primary business requiresinteraction with the customer to produce theser%ice
N$4N
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he Customer Centered iew
heCustomer
he 9er%ice9trategy
he:eople
he9ystems
A philosophical view that
suggests the organization
exists to serve the
customer, an the
s!stems an the
emplo!ees exist to
"acilitate the process o"
service#
A philosophical view that
suggests the organization
exists to serve the
customer, an the
s!stems an the
emplo!ees exist to
"acilitate the process o"
service#
N$4P
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9er%ice$9ystem 7esign #atrix
#ail contact
!ace-to-face
loose specs
!ace-to-face
tig"t specsP"one
$ontact
!ace-to-face
total
customi%ation
uffered
core 'none(
Permea)le
system 'some(
*eactive
system 'muc"(
+ig"
,o+ig"
,o
Degree of customer/server contact
Internet &
on-site
tec"nology
Sales
Opportunity
Production
Efficiency
N$5
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Characteristics of 3or!ers,
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@xample of 9er%ice 0lueprinting M /ine of interaction, line of%isibility, front oFce, bac! oFce
&rus"
s"oes
.pply
polis"
!ail
point
&uff $ollect
payment
$lean
s"oes #aterials
'e/g/0 polis"0 clot"(
Select and
purc"ase
supplies
Standard
e1ecution time
2 minutes
Total accepta)le
e1ecution time3 minutes
45
secs
45
secs
63
secs
73
secs
8rong
color -a1
Seen )y
customer 63
secs
,ine of
visi)ility
9ot seen )y
customer )ut
necessary to
performance
N$52
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9er%ice *ail$sa;ngPoka-Yokes (A Proactive Approach)
Eeeping amista@e from%ecoming a
ser8ice defect
4ow can wefail-safe the
three Ts0
as!
angiblesreatment
N$54
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hree Contrasting 9er%ice 7esigns
The production line approach>e9 (cDonalds?
The self-ser8ice approach >e9automatic teller machines?
The personal attentionapproach >e9 it#-Carlton4otel Company?
N$55
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Characteristics of a 3ell$7esigned 9er%ice 9ystem
:9 ach element of the ser8icesystem is consistent with theoperating focusof the 6rm
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Characteristics of a 3ell$7esigned 9er%ice 9ystem (Continued)
59 &t pro8ides e$ecti8e links%etween the %ac@ oGce and thefront oGce so that nothing falls%etween the crac@s
H9 &t manages the evidenceofser8ice ;uality in such a waythat customers see the 8alue ofthe ser8ice pro8ided
I9 &t is cost-eective
N$5O
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+pplying 0eha%ioral 9cience to 9er%ice @ncounters
:9 The front-end and %ac@-end of theencounter are not created e;ual
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9er%ice Euarantees as 7esign 7ri%ers
ecent research suggestsB *ny guarantee is %etter than no
guarantee
&n8ol8e the customer as well asemployees in the design
*8oid compleity or legalisticlanguage
Do not ;ui%%le or wriggle when acustomer in8o@es a guarantee
(a@e it clear that you are happy forcustomers to in8o@e the guarantee