Design of Operations System

Prof. Chandana Perera

Design of Operations System
Design of physical system
Process selection
Long-term capacity planning
Location selection
Layout planning
Design of work organization

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Process Selection
Process Selection Vs Design

Process Selection – strategic

Process Design – tactical

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Process selection: strategic decision of choosing
the way to produce the products or services. It
addresses issues like:
What type of technology to use
How to arrange the flow of operations

Process selection arises naturally when a new

product/service is planned

But it also arises for existing products due to

technological advances and changes in customer
needs

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Does firm need to produce all the parts of the
product “in-house”?

Very often firms purchase all/some of the parts

from outside and do assembly only. Some firms
even purchase (subcontract) the assembly.

The decision “make” or “buy” depends on

Quality considerations
The nature of demand
Cost considerations
• Capital cost
• Operations cost

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 Process Selection and the Big Picture
Capacity
Demand planning
Forecasts
Facilities and
Product Process Equipment
design selection
Layout
Technological
change
Work
design

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Process selection is closely related to the degree of
standardization and output volume of the
product/service.

Standardization: extent to which there is absence of

variety in the product/service.

Standardization means that

There are fewer parts to deal with in inventory and
manufacturing
More routine purchasing, materials handling and quality
control procedures can be used
But most importantly, standardization allows for long
production runs (i.e. High output volume) and
automation in the processes.
Closely related to the product life cycle
of the product or service

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 Life Cycles of Products or Services
Maturity
Demand

Decline

Growth

Introduction
Time

Standardization  as the product moves into

maturity/saturation phase
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Types of Processes
Project Process
Jobbing Process
Discrete Products
Batch Process
Mass (Line) Process
Continuous Process Continuous Products

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 Types of Processes

Project Processes
One-off, complex, large scale, high work
content “products”
Specially made, every one customized
Defined start and finish: time, quality and
cost objectives
Many different skills have to be
coordinated

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 Types of Processes

Jobbing Processes
Very small quantities: “one-offs”, or only a
few required
Specially made. High variety, low repetition.
“Strangers”
Skill requirements are usually very broad
Skilled jobber, or team of jobbers complete
whole product

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 Types of Processes

Batch Processes
Higher volumes and lower variety than for
jobbing
Standard products, repeating demand. But
can make specials
Specialized, narrower skills
Set-ups (changeovers) at each stage of
production

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 Types of Processes

Mass (Line) Processes

Higher volumes than Batch
Standard, repeat products (“runners”)
Low and/or narrow skills
No set-ups, or almost instantaneous ones

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 Types of Processes

Continuous Process
Extremely high volumes and low
variety: often single product
Standard, repeat products (“runners”)
Highly captial-intensive and automated
Few changeovers required
Difficult and expensive to start and stop
the process

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 Manufacturing process Service process
types types
High

High
Project
Professional
service
Jobbing

Service shop

Variety
Variety

Batch

Mass

Contin- Mass service

Low
Low

-uous

Low Volume High Low Volume High

Flexibility

Unit cost
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 Deviating from the ‘natural’ diagonal on the
product-process matrix has consequences for
cost and flexibility
Manufacturing Volume Service operations
operations process types
process types Variety

Project None
Professional
More service
process
Jobbing flexibility
than is
needed so
Less
high cost Service
Batch process Shop
flexibility
than is
needed so
Mass high cost
Mass
service
Continuous None

The ‘natural’ line of fit of

process to volume/variety
characteristics

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 The Product/Process Matrix
INCREASING VARIETY
INCREASING VOLUME

PRODUCT CHARACTERISTICS
Low volume Low volume Higher volume High volume
Low Multiple Few major High
standardization products products standardization

Random
flow
PROCESS CHARACTERISTICS

(project) Custom
furniture
Jumbled
flow maker Machine
(jobbing)
tool
Disconnected
line flow
maker
(batch)
Automobile
Connected factory
line flow
(mass) Petro-
Smooth flow chemical
(Continuous) refinery

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 The Product/Process Matrix
INCREASING VARIETY
INCREASING VOLUME

PRODUCT CHARACTERISTICS
Low volume Low volume Higher volume High volume
Low Multiple Few major High
standardization products products standardization

Random
flow
PROCESS CHARACTERISTICS

(project)
Investment
Jumbled banking
flow Customer
(jobbing)
service
Disconnected branch
line flow
(batch)
Bank call
Connected centre
line flow
(mass)
Credit card
Smooth processing
flow
(Continuous)

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Guidelines For Process Selection

Match product requirement with the process

capabilities- position diagonally

Positioning off the diagonal: is it always a bad

process choice?
Eg: Motorola mass-produce custom
pagers. Where would you place this on the
matrix?

As product goes thorough its life-cycle,

processes need to be changed as well.

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Process Flow Design
A process flow design can be defined as a
mapping of the specific processes that raw
materials, parts, and subassemblies follow as they
move through a plant.

The most common tools to conduct a process flow

design include assembly drawings, assembly
charts, and operation and route sheets

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