PROCESS CHOICE

Course Roadmap

Operations Strategy Roadmap

Operations
Strategy
Operations Management
Competitive Priorities Process Choice
Order Winners Volume and Variety

Quality Supply Chain

Management Management

1
 4-4

Process Choice
Module Objectives
• Distinguish between types of manufacturing
operations
• Identify key management issues in operations
• Distinguish between manufacturing and service
operations
• Understand the relations of products and services in
the service bundle
• Match product to the appropriate manufacturing or
service process
• Understand the implications of process choice
decisions

4-5

Operations as a System

INPUTS TRANSFORMATION OUTPUTS

Energy
Materials
Transformation
Labor Process Goods or
Capital (physical, physiological, Services
logistical, psychological)
Information

Feedback information for

control of process inputs
and process technology

 The McGraw-Hill Companies, Inc. 2000 / Duray

4-6

Process Choice
• Process is a strategic choice
– Not industry specific
– Not technology driven

Based on Volume and Variety of products

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Major Decisions for

Effective Process Design

4-8

Example:
Bicycle Manufacturing
Capital
Intensity Lots of automation Schwinn ’80s
Huffy Lots of labor / unit
Capital Used
(equipment)
per unit
produced Serotta
Automated equipment
Little labor per unit

Little automation
Moderate Automation Trek Lots of skilled labor
Labor Used
Moderate Labor
per unit
Resource Flexibility produced
S. Lawrence

4-9

Example:
Bicycle Manufacturing
Desirable
Capital Used Undesirable!
(equipment)
per unit
produced

Efficient
Frontier Desirable
Desirable
Labor Used
per unit
produced
S. Lawrence

3
 10

Major Decisions for

Effective Process Design

4 - 11

Customer Involvement
• Make to Stock (MTS) Low Involvement
• Assemble to Order
(ATO)
• Engineered to Order
(ETO)
• Make to Order (MTO) High Involvement

Service and Manufacturing Processes

Differ Across Nature of Output and Degree of
Customer Contact

More like a More like

manufacturing a service
process process

• Physical, durable output • Intangible, perishable output

• Output can be inventoried
• Low customer contact
• Long response time
• Capital intensive
• Quality easily measured
Figure 1.3
• Output cannot be inventoried
• High customer contact
• Short response time
• Labor intensive
• Quality not easily measured

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Comparison of Goods and Services

Goods Services

100% 75% 50% 25% 0% 25% 50% 75% 100%

Self-service groceries
Automobile
Installed carpeting
Fast-food restaurant
Gourmet restaurant
Auto maintenance
Haircut
Consulting services

14

Major Decisions for

Effective Process Design

4 - 15

Product-Flow Characteristics
• Product Flow
– Linear Flow
– Jumbled Flow
– Project Flow

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 4 - 16

Jumbled Flow
WS 2 WS 4

WS 1 WS 3 WS 5

WS Task or work station

Product flows

Irwin/McGraw-Hill  The McGraw-Hill Companies, Inc. 2000

Flow Strategies
Flexible/Jumbled flows at a Health Clinic

D R P

T B

D: Doctor (examination rooms)

R: Radiology (X-ray)
T: Triage (assess severity of illness)
B: Blood (lab test)
P: Pharmacy (fill prescriptions)

Flow Strategies
Flexible/Jumbled flows at a Health Clinic

Physical exam

Physical exam
D R P

T B

D: Doctor (examination rooms)

R: Radiology (X-ray)
T: Triage (assess severity of illness)
B: Blood (lab test)
P: Pharmacy (fill prescriptions)

6
 Flow Strategies
Flexible/Jumbled flows at a Health Clinic

Physical exam

Physical exam
D R P
Broken arm
Broken arm
T B

D: Doctor (examination rooms)

R: Radiology (X-ray)
T: Triage (assess severity of illness)
B: Blood (lab test)
P: Pharmacy (fill prescriptions)
Figure 2.3 (a)
Krajewski RitzmanR/ Duray

Flow Strategies
Flexible/Jumbled flows at a Health Clinic

Physical exam

Flu
Physical exam
D R P
Broken arm
Broken arm
T B
Flu
D: Doctor (examination rooms)
R: Radiology (X-ray)
T: Triage (assess severity of illness)
B: Blood (lab test)
P: Pharmacy (fill prescriptions)

4 - 21

Linear Flow

WS 1 WS 2 WS 3

WS Task or work station

Product flow

Irwin/McGraw-Hill

7
 Flow Strategies
Linear flows at an Automobile Assembly Plant

A H F S

A: Front-end body-to-
chassis assembly
H: Hood attachment
F: Fluid filling
S: Start-up testing

Flow Strategies
Linear flows at an Automobile Assembly Plant

A H F S

A: Front-end body-to-
chassis assembly
H: Hood attachment
F: Fluid filling
S: Start-up testing

Figure 2.3 (b)

Krajewski Ritzman/ Duray

Flow Strategies
Linear flows at an Automobile Assembly Plant

A H F S

A: Front-end body-to-
chassis assembly
H: Hood attachment
F: Fluid filling
S: Start-up testing

Figure 2.3 (b)

Krajewski Ritzman/ Duray

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 4 - 25

Project Flow
Task 2 Task 4

Start End

Task 1 Task 3

Task Task or activity

Precedence relationship

Irwin/McGraw-Hill
 The McGraw-Hill Companies, Inc. 2000

4 - 26

Product-Flow Characteristics
• Types of Product Flow • Types of Process
– Linear Flow – Continuous, Line,
Batch
– Jumbled Flow – Batch and Job Shop
– Project Flow – Project

 The McGraw-Hill Companies, Inc. 2000 / Duray

Process types

Project
Flow
Jumbled Flow

Linear Flow

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 4 - 28

Key Elements Affecting Process

Choice
• Product Volumes

• Product Variety

4 - 29

Examples of Process Choice

King Soopers Video

30

Major Decisions for

Effective Process Design

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 31

The Big Picture

King Soopers Bakery

4 - 32

Key Elements Affecting Process

Choice
• Product Volumes

• Product Variety

 The McGraw-Hill Companies, Inc. 2000 / Duray

Process types

11
 Process Choice

High
Custom
Cakes

Pastries
Variety
Volume
Bread

Low
Low High
Volume

4 - 35

Factors Affecting Process Choice

Cake- Pastry- Bread –
job shop batch line
Market
(volume)

Capital

Labor

Materials

Technology

Product Life
Cycle

4 - 36

Factors Affecting Process Choice

Cake- Pastry- Bread –
job shop batch line
Market Small / New large
(volume)

Capital

Labor

Materials

Technology

Product Life
Cycle

12
 4 - 37

Factors Affecting Process Choice

Cake- Pastry- Bread –
job shop batch line
Market Small / New large
(volume)

Capital Low High

Labor

Materials

Technology

Product Life
Cycle

4 - 38

Factors Affecting Process Choice

Cake- Pastry- Bread –
job shop batch line
Market Small / New large
(volume)

Capital Low High

Labor Skilled Little/low

Materials

Technology

Product Life
Cycle

4 - 39

Factors Affecting Process Choice

Cake- Pastry- Bread –
job shop batch line
Market Small / New large
(volume)

Capital Low High

Labor Skilled Little/low

Materials Flexible Flexible/Mixed Standard

Technology

Product Life
Cycle

13
 4 - 40

Factors Affecting Process Choice

Cake- Pastry- Bread –
job shop batch line
Market Small / New large
(volume)

Capital Low High

Labor Skilled Little/low

Materials Flexible Flexible/Mix Standard

Technology Flexible Dedicated

Product Life New products Mature

Cycle

4 - 41

Factors Affecting Process Choice

Cake- Pastry- Bread –
job shop batch line
Market Small / New large
(volume)

Capital Low High

Labor Skilled Little/low

Materials Flexible Flexible/Mixed Standard

Technology Flexible Dedicated

Product Life
Cycle

4 - 42

Factors Affecting Process Choice

Cake- Pastry- Bread –
job shop batch line
Market Small / New large
(volume)

Capital Low High

Labor Skilled Little/low

Materials Flexible Flexible/Mixed Standard

Technology Flexible Dedicated

Product Life New products Mature

Cycle

14
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Major Decisions for

Effective Process Design

4 - 44

Factors Affecting Process Choice

• Market conditions and competition
• Product Life Cycle

• Capital requirements
• Labor supply and cost
• Management skills
• Materials supply and cost
• State of technology

 The McGraw-Hill Companies, Inc. 2000 / Duray

4 - 45

•Product Life Cycle Stages

Low volume-low standardization, one of a
kind
Multiple products, low volume
Few major products, higher volume
High volume-high standardization,
commodity product

Irwin/McGraw-Hill  The McGraw-Hill Companies, Inc. 2000

15
 4 - 46

Process Life Cycle Stages

Jumbled flow (job shop)
Disconnected line flow (batch)
Connected line flow (assembly line)
Continuous flow

Irwin/McGraw-Hill  The McGraw-Hill Companies, Inc. 2000

4 - 47

Life Cycle Alignment

Product Life Cycle Stages Process Life Cycle Stages
 Low volume-low  Jumbled flow (job shop)
standardization, one of a
kind  Disconnected line flow
 Multiple products, low (batch)
volume
 Few major products,  Connected line flow
higher volume (assembly line)
 High volume-high
standardization,
commodity product  Continuous flow

4 - 48
PRODUCT-PROCESS MATRIX
PRODUCT STRUCTURE (Product Life Cycle)
I III
II III
Low volume-low High volume-high
Multiple products, Few major products
standardization, one of standardization,
low volume higher volume
a kind commodity products

I
Jumbled flow
(job shop)
Commercial NONE
Printer

II
PROCESS STRUCTURE (Process Life Cycle)

Disconnected
line flow Heavy
(batch) Equipment

III
Connected
Automobile
line flow
assembly
(assembly
line)

Sugar
IV Refinery
Continuous
flow NONE

Irwin/McGraw-Hill  The McGraw-Hill Companies, Inc. 2000

16
 Manufacturing Process Design:
Product-Process Matrix -- Process Choice
Less Customization and Higher Volume

Product Design
(1) (2) (3) (4)
Low-volume Multiple products with low Few major High volume, high
products, made to moderate volume products standardization,
Less Complexity, Less Divergence, More Line Flows

Process to customer higher Continuous Flow

Characteristics order volume

(1)
Complex and highly
customized process, Job
unique sequence of process
tasks
Small batch
(2) process
Disconnected line flows,
moderately complex
work Large batch
process

(3) Line
Connected line, , highly process
repetitive work

(4) Continuous
Continuous flows process
49
© 2007 Pearson Education

Decision Patterns for

Manufacturing Processes
Major process decisions

Low-Volume,
make-to-order process
• More complexity, more Job
divergence, more flexible process
flows
• More customer involvement Small batch
• More resource flexibility process
• Less capital intensity

Large batch
process

High-Volume, Line
make-to-stock process process
• Less complexity, less
divergence, more line flows
• Less customer involvement Continuous
• Less resource flexibility process
• More capital intensity
50
Low High
© 2007 Pearson Education

Process types

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 5 - 52

Definition of Service
Key Concepts
• Intangibility of the product
• Simultaneous production and consumption

Difficulty in defining and measuring quality

and productivity

 The McGraw-Hill Companies, Inc. 2000 / Duray

4 - 53

Product-Flow/Process
Characteristics
• Types of Product Flow • Types of Process
– Linear Flow – Back Office
– Jumbled Flow – Hybrid Office
– Project Flow – Front Office

Service Process Design: Customer-Contact

Model
Less Customer Contact and Customization

Service Package
(1) (2) (3)
Process High interaction with Some interaction with Low interaction with
customers, highly customers, standard customers, standardized
Characteristics
Less Complexity, Less Divergence, More Line Flows

customized service services with some options services

(1) Or here …
Jumbled flows,
Front office
complex work with
many exceptions

(2)
Flexible flows with
some dominant
Hybrid office
paths, moderate job
complexity with
some exceptions

(3)
Line flows, routine Back office
work easily Don’t want to be
understood by here …
employees

54
Figure 4.3

18
 Decision Patterns for
Service Processes
Major process decisions

High customer-contact
process
• More complexity, more Front office
divergence, more flexible flows
• More customer involvement
• More resource flexibility
• Capital intensity varies with
volume.

Hybrid office

Low customer-contact
process
• Less complexity, less
divergence, more line flows Back office
• Less customer involvement
• Less resource flexibility
• Capital intensity varies with
volume..
Low High 55

© 2007 Pearson Education

Process types

Process types

DTO

MTO

ATO
or
MTS

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Process Identification Internet Plant Tours

M&Ms
https://www.youtube.com/watch?v=iapNZqTV7YQ

Sconza Candy
https://www.youtube.com/watch?v=PsuSkRjFNaU&t=53s
https://www.youtube.com/watch?v=3jjCoxP-4mY

Steinway
https://www.youtube.com/watch?v=jAInt7hIZlU
Steinway 1929
https://www.youtube.com/watch?v=tEnuMbyw1eE

Yamaha
https://www.youtube.com/watch?v=OeMab58WDF4&t=276s

IBM Mortgage Loan Processing

https://www.youtube.com/watch?v=296td0Zt6Kw

Toyota Express maintenance

https://www.youtube.com/watch?v=AddSSv3bZ98&t=237s

Cake boss
https://www.youtube.com/watch?v=Ayfr-jexMrc&t=6s

https://www.youtube.com/watch?v=NIGK6niusqM

Process Choice
• Process is a choice
• Based on volume and variety

• Once a process is chosen, there are specific

tools to use for each process.
(labor, materials, technology, scheduling, etc)

4 - 60

Process Choice
Module Objectives
• Distinguish between types of manufacturing
operations
• Identify key management issues in operations
• Distinguish between manufacturing and
service operations
• Understand the relations of products and
services in the service bundle
• Match product to the appropriate
manufacturing or service process
• Understand the implications of process
choice decisions

20