PROCESS DESIGN

The design of products and services and the design of the processes are clearly
interrelated. It is not wise to focus on detailed design of any product or service
without some consideration of how it is to be produced (process). Small changes in
the design of products can have significant implications for the process through
which they are produced. This interrelation in product and process design is greater
in servicing businesses than in production businesses because many services
involve the customer in being part of the transformation process, the service, as far
as the customer sees it, cannot be separated from the process to which the customer
is subjected..

Process Selection refers to the way an organization chooses to produce its good or services.
It takes into account selection of technology, capacity planning, layout of facilities,
and design of work systems. The relationship among these are demonstrated in the
following figure.

. . . . InPut . . . . . . . . OutPut . . . .

Facilities &
Forecasting Equipment
Capacity
Planning

Product
Service Design
Layout

Process
Technological Selection
Change Work Design

Process selection is a naturally the next step after deciding about the design of new
products and services. An organizations process strategy would include the
following;

1. Make or Buy Decisions. The extent to which an organization will produce goods
or provide services in-house instead of buying them from an outside organization.
2. Capital Intensity. The mix of equipment and labor that will be used by the
organization.
3. Process Flexibility: The degree to which the system can be adjusted to changes in
processing requirements due to such factors as changes in product or service
design, changes in volume processed, and changes in technology

1. Make or Buy Decision:

Managers in Operations have to decide whether to develop a competence in-house
(Make) or hire an outside competent organization to supply that product (Buy). It is
often referred to as Make or Buy Decision.
In case of outsourcing, the managers carefully tend to hire such an outsourcer who
is honest, ethical, competent. It also requires that outsourcing contract should be
flexible yet reasonable and carry proper levels of services.

There are 6 reasons which are available to us in order to decide whether to develop
a competence in-house or hire an outside competent organization

i. Available capacity: If an organization has the equipment, necessary skills and

time, it often makes sense to produce an item or perform a service in house. The
additional costs would be relatively small compared with those required to buy
items or subcontract them.

ii. Expertise: If a firm lacks the expertise to do a job satisfactorily, buying might be a
reasonable alternative.

iii. Quality considerations: Firms that offer only specialized products and services
can usually offer higher quality than an organization that offer General
Products/Services. Therefore, sometimes it is preferred to buy certain products
from a specialized manufacturer rather than making them in-house.

iv. Nature of Demand: When demand for an item is high and steady, the
organization is often better off doing the work itself. However, wide fluctuations in
demand or small orders are usually better handled by specialists, who are able to
combine orders from multiple sources, which results in higher volume and tend to
offset individual buyer fluctuation.

v. Cost: Any cost savings achieved from buying or making must be weighed
against the preceding factors. Cost savings might come from the item itself or from
transportation cost savings. If there are fixed costs associated with making an item
that cannot be reallocated if the item is purchased, that has to be recognized in cost
analysis.

vi. Risk. Outsourcing or buying the services carries risk; often companies retain
flexibility by carrying out certain critical activities in house and repetitive menial
activities through out sourcing.
 TYPES OF PROCESSES:
The degree of standardization and the volume of output of a product or service
influence the way production is organized. Output can range from high volume,
highly standardized, …. to low volume, highly customized. Accordingly, different
types of processes can be arranged as follows.

1. Continuous Processing:
2. Semi-continuous /Repetitive Processing:
3. Intermittent Processing: (Batch Processing, Job Shop)
4. Automation:

1. Continuous Processes:
Continuous processing is employed when a highly uniform product or service is
produced. Products/Services that result from continuous processing are identical. It
is often performed by machines and its examples include, air-conditioning, heating,
CCTV monitoring systems, electricity, water treatment and filtration.

Operations for such processes run round the clock. Products are measured on
continuous bases instead of counting the number of products or service. (Such
industries are sometimes called process industries)

2. Semi-Continuous Processing/Repetitive Processing:

This type of processes allow some extent of flexibility or customization. Although
there is some amount of variety, standardized products of few kinds are produced.
Products are similar but not identical. This concept is closely related to Mass
Customization.

Ready-made shirts of standardized sizes such as Small, Medium, Large and Extra
Large are examples of this kind of processes. Other examples include computers,
automobile etc.

Methods and procedures of above two types are highly standardized. It also
enables the organizations to work with lesser skilled labor.

3. Intermittent Processing: (Batch Processing, Job Shop)

Intermittent Processing is used when it is required to produce variety of items in
smaller quantities. Level of customization in this type of processes is more than it is
in previous two types of processes.

This type of processes are not continuous, rather production is made at irregular
intervals. Semi-skilled workers are required and production volumes are much
lower than it is in continuous processes. Following are different forms of
Intermittent Processing.

i). Batch Processing: It is a system used to produce moderate volumes of similar

items. Products in one batch are similar to each other but are different from the
products from other batches. For example, an ice-cream producer will produce one
batch of vanilla ice-cream, then a second batch of strawberry ice-cream. The
processing requirement and equipment are the same but some of the ingredients
vary from one batch to another.

ii). Job Shop: A job shop contains a greater flexibility of job requirements as
compared to batch processing. It refers to A system that renders unit or small lot
production or service with variety of specifications according to customer needs.

Highly skilled labor is required in this kind of processes and production or delivery
of service occurs in very small volumes or on a single unit.

Example of job shop includes an auto workshop. Each car is handled on an

individual bases. The work is performed based on customer requirements. Other
examples are health care,

The table below provides a summary of the characteristics of all four types of
operations and their processes.

Continuous Repetitive Batch Production Job Shop

Processing Processing

Description Highly Standardized Standardized Customized

Standardized Goods/Services Goods/Services Goods/Services

Product Variety Very Low Low Moderate High

Equipment Very Low Low Moderate High

Flexibility

Volume Very High High Moderate Low

Output variety Very Low Low Moderate High

Advantages Very Efficient, Low Unit Cost, Flexibility Able to handle

Very High High Volume, wide variety of
Volume Efficient work

Disadvantages Very Rigid, Less Low Flexibility, Moderate per unit Slow, High per
Variety, Costly to High cost of cost, Moderate unit cost,
Change, downtime Scheduling Planning and
Downtime Cost is Complexity scheduling is
very high complicated

Project: A project is used for work that is non-routine, with a unique set of
objectives to be accomplished in a limited time frame. Equipment flexibility and
worker skills can range from low to high. Examples range from simple to
complicated, such as; launching a new product or service, publishing a book,
building a dam, and building a bridge.

The processes discussed do not always exist in their “pure” forms. It is usual to find
hybrid processes, i.e. processes that have elements of other process types embedded
in them
Another thing that is important to consider is the life cycle stages of each product.
In the first stages, products are produced in small quantities. As it passes through
next stages, sale and number of items produced increases. Therefore, managers
must know when to use a particular processes. A product may start production
through a job shop system, but when it is required to produce in large numbers,
managers may shift to Batch production. Later on, it can go on to Mass production
through continuous processing.

4. AUTOMATION:
Refers to that kind of a process, in which such a machinery is used that has sensors
and controlling devices that enables it to operate automatically.

Simply using machinery to perform the jobs is not automation. Rather, it refers to
Artificial Intelligent Machinery (that has sensors and controlling devices).

If a company decides to automate, the next question is how much. Automation can
range from factories that are completely automated to a single automated
operation.

Advantages of Automation: Automation offers a number of advantages over

human labor. First; It has low variability, whereas it is difficult for a human to
perform a task in exactly the same way, in the same amount of time, and on a
repetitive basis. Secondly, It maintains the exactly same quality for all the products
or services produced but a human hand can not maintain exact same quality for
each product produced. Third, human factor that may hinder productivity is not
involved, machines do not get bored or distracted, nor do they go out on strike, ask
for higher wages or get sick.

It also has some Disadvantages. Automation is highly costly because the

technology and machinery is expensive. Also, it is much less flexible than human
labor. Moreover, workers sometimes fear automation because it might cause them
to lose their jobs. That can have an adverse effect on morale and productivity.

Generally speaking, there are three kinds of automation: fixed, programmable, and
flexible.

i. Fixed Automation:
A kind of automation that uses high-cost specialized equipment for a fixed sequence of
operations. Low cost and high volume are its primary advantages; minimal
flexibility and the high cost of making major changes are its primary limitations.

ii. Programmable Automation:

A kind of automation that uses a computer program to control high cost general
purpose equipment. Computer program provides both the sequence of operations
and specific details about each operation which enables it to exhibit customized
production.
Changing the sequence is easy and cheap, but changing a computer program is
complicated and expensive. This type of automation has an advantage of flexibility
in operations because changes in production requirements/sequence can be
handled by the computer program. Computer-aided manufacturing (CAM) and
Numerically controlled (N/C) machines are included in programmable automation.

Computer-aided manufacturing (CAM): refers to the use of computers in process

control, ranging from robots to automated quality control.

Numerically controlled (N/C) machines are the machines that perform operations by
following mathematical processing instructions.

iii. Flexible Automation:

Flexible automation evolved from programmable automation. It uses equipment
that is more customized than that of programmable automation. A key difference
between the two is that flexible automation requires significantly less changeover
time. This advantage takes over the limitation of programmable automation where
“changing a computer program is complicated and expensive”. Which means that
flexibility in operations can be added even the almost continuous operations of
equipment are performed.

In practice, flexible automation is used in several different formats.

Flexible manufacturing system (FMS) A group of machines designed to handle

intermittent processing requirements and produce a variety of similar products.
Such Systems may range from three or four machines to more than a dozen
controlled by a supervisory computer. They are designed to handle intermittent
processing requirements with some of the benefits of automation and some of the
flexibility of individual, or stand-alone, machines.

Computer-integrated manufacturing (CIM) is a system that uses an integrating

computer system to link a broad range of manufacturing activities, including
inventory handling, flexible manufacturing systems, purchasing, order processing,
and production planning and control.

CIM might be as simple as linking two or more FMSs by a host computer. The
overall goal of using CIM is to link various parts of an organization to achieve rapid
response to customer orders and/or product changes
 OBJECTIVES OF PROCESS DESIGN
(Quality, Speed, Dependability, Flexibility, Cost)

Quality:
You would want to do things right; that is, you would not want to make mistakes,
and would want to satisfy your customers by providing error-free goods and
services which are ‘fit for their purpose’. This is giving a quality advantage.

Speed:
You would want to do things fast, minimizing the time between a customer asking
for goods or services and the customer receiving them in full, thus increasing the
availability of your goods and services and giving a speed advantage.

Dependability:
You would want to do things on time, so as to keep the delivery promises you have
made. If the operation can do this, it is giving a dependability advantage.

Flexibility:
You would want to be able to change what you do; that is, being able to vary or
adapt the operation’s activities to cope with unexpected circumstances or to give
customers individual treatment. Being able to change far enough and fast enough to
meet customer requirements gives a flexibility advantage.

Cost:
You would want to do things cheaply; that is, produce goods and services at a cost
which enables them to be priced appropriately for the market while still allowing
for a return to the organization; or, in a not-for-profit organization, give good value
to the taxpayers or whoever is funding the operation. When the organization is
managing to do this, it is giving a cost advantage.

Process Design Objectives for a Process Design Objectives for a

Hospital Supermarket
Quality
• Patients receive appropriate • Goods are in good condition &
treatment well organized in shelves
• Patients are consulted and well • Store is clean and well decorated
informed • Staff is friendly and helpful
• Staff is friendly and helpful
Speed
• Time between requiring • The time taken for total
treatment and receiving treatment transaction of going to market,
is kept to minimum. shopping and returning home is
• Time for test results and X-Ray kept to minimum
etc is kept to minimum. • Immediate availability of goods.
Dependability
• Keeping appointment time • Consistent opening hours
• Minimizing cancellation of • Proportion of Out-of-stock goods
appointments kept to minimum
 • Test results, X-Ray are containing
accurate information
Flexibility
• Consistent opening hours
• Proportion of Out-of-stock goods
kept to minimum
• Constant availability of parking
Cost
• Minimizing Operating Costs
• Constant availability of parking
• Introduction of new goods or
promotions
• A wide range of good stocked
• Ability to adjust working space
according to customers in rush
hours.
• Minimizing purchasing costs
associated with package
discounts.
• Minimizing Supply Chain Costs

PROCESS MAPPING
Process mapping simply involves describing processes in terms of how the
activities within the process relate to each other. There are many techniques which
can be used for process mapping (or process blueprinting, or process analysis, as it
is sometimes called). However, all the techniques identify the different types of
activity that take place during the process and show the flow of materials or people
or information through the process.

Process mapping symbols:

Process mapping symbols are used to classify different types of activity. And
although there is no universal set of symbols used all over the world for any type of
process, there are some that are commonly used. Most of these derive either from
the early days of ‘scientific’ manage- ment around a century ago (see Chapter 9) or,
more recently, from information system flowcharting. Following Figure shows the
symbols we shall use here.
These symbols can be arranged in order, and in series or in parallel, to describe any
process. For example, the retail catering operation of a large campus university has
a number of outlets around the campus selling sandwiches. Most of these outlets
sell ‘standard’ sandwiches that are made in the university’s central kitchens and
transported to each outlet every day.

However, one of these outlets is different; it is a kiosk that makes more expensive
‘customized’ sandwiches to order. Customers can specify the type of bread they
want and a very wide combination of different fillings. Because queues for this
customized service are becoming excessive, the catering manager is considering
redesigning the process to speed it up. The process will be changed as in the
following diagram.
 SOME KEY TERMS
Cycle Time: Rate at which units Emerge from System.
Throughput Time: Time for an input to become an output
Work in Process (WIP): Number of Units in Process
The Utilization: Proportion of time, a resource is performing work
Idle Time: Proportion of time, a resource is Idle, Not performing

Consult the video example of an assembly line to understand these terms.

Suppose that the time to assemble and sell a sandwich (the work content) using the
old process was two minutes and that two people were staffing the process during
the busy period. Each person could serve a customer every two minutes, therefore
every two minutes two customers were being served, so on average a customer is
emerging from the process every minute. This is called the cycle time of the
process, the average time between units of output emerging from the process.
When customers join the queue in the process they become work-in-process (or
work-in-progress) sometimes written as WIP. If the queue is ten people long
(including that customer) when the customer joins it, he or she will have to wait ten
minutes to emerge from the process. Or put more succinctly:

Throughput time = Work-in-process × Cycle time

10 minutes wait = 10 people in the system × 1 minute per person

This mathematical relationship is called Little’s law.

Little’s Law:
It is simple but very useful, and it works for any stable process. For example,
suppose it is decided that, when the new process is introduced, the average number
of customers in the process should be limited to around ten and the maximum time
a customer is in the process should be on average four minutes. If the time to
assemble and sell a sandwich (from customer request to the customer leaving the
process) in the new process has reduced to 1.2 minutes, how many staff should be
serving?
Putting this into Little’s law
Given that an individual can be served in 1.2 minutes,

Number of servers required = 1.2 / 0.4 = 3

In other words, three servers would serve three customers in 1.2 minutes. Or one
customer in 0.4 minute.

Throughput Efficiency:
This idea that the throughput time of a process is different from the work content of
whatever it is processing has important implications. What it means is that for
significant amounts of time no useful work is being done to the materials,
information or customers that are progressing through the process. In the case of
the simple example of the sandwich process described earlier, customer throughput
time is restricted to 4 minutes, but the work content of the task (serving the
customer) is only 1.2 minutes. So, the item being processed (the customer) is only
being ‘worked on’ for 1.2/4 = 30 per cent of its time. This is called the throughput
efficiency of the process.

In this case the throughput efficiency is very high, relative to most processes,
perhaps because the ‘items’ being processed are customers who react badly to
waiting. In most material and information transforming processes, throughput
efficiency is far lower, usually in single percentage figures.