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Management has many options in the selection, definition, and design of goods and services.

Product selection is
choosing the good or service to provide customers or clients. For instance, hospitals specialize in various types of
patients and various types of medical procedures. They select their product when they decide what kind of hospital
to be. A hospitals management may decide to operate a general purpose hospital, a maternity hospital, or even a
hospital specializing in heart diseases. Numerous other options exist for hospitals, just as they exist for
restaurants and automobile companies.
Product decisions
Product design is the mother of all operations processes in an organisation. The processes for manufacture, the
planning of production, the processes and checks for quality depend upon the nature of the product. One may say
that it all starts with the design of the product. Even the logistics or plain shipment of the product depends upon
how or what the product has been designed for. Design gives the blueprint. When the design engineer keys in the
computer aided design or when a product design artist draws lines on a sheet of paper, it starts a train of
Product decisions are fundamental and have major implications throughout the operations function. They
influence capital equipment cost, layout design, space requirements, the skills of people hired and trained,
materials, and the processes used.
Factors Influence in Generation of New Product Opportunities
Product selection, definition, and design take place on a continuing basis because so many new product
opportunities exist.
Five factors influencing market opportunities are
1. Economic change, which brings increasing, levels of affluence in the long run but economic cycles and price
changes in the short run. For instance, in the long run, more and more people can afford an automobile, but in the
short run, a recession may alter the demand for automobiles.
2. Sociological and demographic change, which may appear in such factors as decreasing family size. This
alters the size preference for homes, apartments, and automobiles.
3. Technological change, which makes possible everything from home computers to mobile phones to artificial
4. Political/legal change, which brings about new trade agreements, tariffs, and government contract
5. Other changes, which may be brought about through market practice, professional standards, suppliers, and

A process is a set of steps that result in a specific outcome. For example, a customer service request might have
the following steps:
1. Customer requests service
2. Service department enters request into a tracking system
3. The request is routed to the repair department

4. A repair technician is assigned to evaluate the request and to respond to the customer
5. A technician is dispatched, if appropriate
6. Once the response is made, a survey is sent to the customer to confirm their issue was resolved
In this case, the process is response to customer service request, and the outcome is resolution of the customer's
Goal of Process Planning
The goal of process planning is to improve and streamline the business methods of a company. This would have
results like:

Lower costs, due to fewer staff needed to complete the same process

Higher efficiency, by eliminating problematic process steps like loops and bottlenecks

Higher accuracy, by including checkpoints and success measures to make sure process steps are completed

Greater understanding by all staff of what they need to do to meet their department objectives

Principles of Process Planning

Here are some general principles to keep in mind when evaluating or improving processes:

First, define the outputs, and then look toward the inputs needed to achieve those outputs

Define the goals of the process and evaluate them regularly to make sure they are still appropriate. This
would include specific measures like quality scores and turnaround times

When mapped, the process should appear as a logical flow, without loops back to earlier steps or

Any step performed needs to be included in the documentation. If not, it should be eliminated or
documented, depending on whether or not it's necessary to the process

People involved in the process should be consulted, because they often have the most current information
on what works and what does not

Steps to Plan a Process

Process planning involves the definition, documentation, review and improvement of steps in business
processes used at a company. Each of these steps will be described below.

The first step is to define what the process should accomplish. Make sure you can answer the following
questions about the process:

What is the output of this process?

Who receives the output, and how do they define success?

What are the inputs for the process?

Are there defined success measures in place - such as a turnaround time or quality scores?

Are there specific checkpoints in the process that need to be addressed?

For example, let's look at an order fulfillment process:

The output of the process is a complete and accurate order shipped to the buyer

The recipient of the order is the buyer, and they define success as receipt of their purchase within a
reasonable timeframe (generally as specified at the point of purchase)

The inputs are order information from the sales department

Defined success measures would be specific to the company; examples might be a 2-day turnaround time
from payment receipt to shipping, a 99% accuracy rate in terms of items shipped, and a backorder rate of
less than 5%

At the product conception stage, manufacturing proposes investigates processes and concepts. When the product
concept has been finalized, the role of process management then is to develop cost estimates, define process
architecture, conduct process simulation and validate suppliers. Concurrently with the detailed product design,
process management is involved in the designing of the process, designing and developing tooling and participating
in building full-scale prototype. At the time the product development teams are developing the prototype, the
process management teams test and try out tooling and equipment; help build second phase; an assembly line is a
prototypes; install equipment and specify process procedures.
This is followed by building pilot units in commercial process; refining process based on pilot experience, training
personnels and verifying supply channels. Finally at the release of product, process management has to ramp up
plan to volume targets, meet targets for quality, yield and cost. /The analytical work of process planning can be
divided into two classes:
Process analysis,
Operation analysis
Process analysis: is governed by the main process decisions namely, capital/labour intensity, outsourcing,
resource flexibility and volumes. These four decision areas represent broad strategic issues that have to decide
prior to finalizing the process design. It is concerned with the overall set of operations constituting the process.
Process analysis is not directly concerned with the content of operations constituting the process, or with the
detailed method of carrying out the operations. It comes out with recommendations for primary (work station) and
secondary equipment (accessories) required for the most effective and efficient production of the products and work
flow. The process analysis decisions are reflected in a route sheet. A route sheet normally specifies the sequence of
operations in a process by name and numbers. A rout sheet is prepared for each component.
Operation Analysis: Once the process analysis decisions are taken management has to determine exactly how
each process will be performed. This is called operation analysis. Operation analysis is concerned with the work
content constituting the operation and method of performing the work, given the resources allocated to the process.
Similar to process analysis, operation analysis generates an operation sheet. It specifies the steps and elements of
work for each operation. These are specified in a proper sequence. Together with the route sheet and operation
sheet provide all the information required to perform a process effectively and efficiently.
There are different ways to categorize a process. They can be categorized on the basis of orientation, e.g. market
orientation or manufacturing process; they may also be categorized on the basis of the production methodology or
customer involvement. The various type set processes are given below:
Processes by Market Orientation: There are four types of processes based on market orientation:
Make to stock-The goods usually are standard, mature products. As a general rule make to stock products
compete primarily on the basis of cost and availability. Example of such products includes most retail goods.
Assemble to order-products are standard items that are assembled from in stock subassemblies. This allows
customers to specify a wide range of options.

Make to order- are made from previously designs, but are made only after an order has been received. Make
to order products are used when the standard product is too costly to stock, have too uncertain demand, or will
deteriorate if stocked on shelf.
Engineer to order-This market orientation is used to make unique products that have not been previously
engineered, Extensive customization to suite the customers need is possible but only if customer is willing to
wait for this addition stage in the value creation process.
Processes as production systems: A production system refers to how an organization organizes material flow
using different process technologies. There are five types of production systems:
Projects: These are one-off projects. It is based on extensive customization that is suited to the customers
need. Many construction projects, project management contract, shipbuilding and civil engineering projects fall
in this category.
Job shop: Construction is characterized by processing of small batched of a large number of products, most of
which require a different set or sequence of processing steps. Production equipment is mostly general purpose to
meet the specific customer orders.
Batch production: Production is in discrete parts that are repeated at regular intervals. Such a structure is
generally employed for relatively stable lines of products, each of which is produced in medium volume.
Assembly Line: It is a mass production process. On assembly line, production follows in a predetermined
sequence of steps which are continuous rather than discreet. The product moves from work station to
workstation at a controlled rate following the sequence needed to build the product.
Continuous flow: It is common in the food processing industry, and in industries involving undifferentiated
materials. Most bulk products are manufactured using continuous flow production; generally, on-line control
and continuous system monitoring is needed.