Professional Documents
Culture Documents
Process Strategy
LO 7.4: Describe customer interaction in service processes construction firms, such as Bechtel
Repetitive: Fast-food restaurants
AACSB: Application of knowledge
Product: Shouldice Hospital 17. CAD data generates design data, but can also generate
Mass customization: Cafeterias and online stockbrokers, instructions for NC machines. If the NC machines are connected
such as Schwab (integrated) with other NC machines and material handling
LO 7.1: Describe four process strategies equipment such as AGVs or conveyors or other transfer machines,
the entire system is considered a flexible manufacturing system.
AACSB: Application of knowledge
LO 7.5: Identify recent advances in production technology
12. Competitive advantage of service firms in each process model:
Process focus for a general-purpose hospital: specialization
AACSB: Application of knowledge
of expertise in each hospital discipline, x-ray, physical 18. Additive manufacturing adds material (rather than removing
therapy, blood lab, etc., by both the technician and it) to produce products. This is typically done by building parts
supervision. layer by layer with semi-liquid materials. Additive manufacturing
Repetitive focus: High-quality modules as in most fast-food is being used for design testing, to build prototypes, for custom
(very limited menu) restaurants, and law clinics—with the products, and increasingly for high volume production.
low cost of the uncontested divorce. LO 7.5: Identify recent advances in production technology
Product focus: Shouldice Hospital, Southwest Airlines, and 19. The advantages of 3D printing (additive manufacturing)
online stockbrokers may be good examples of low-cost include the ability to produce complex products that traditionally
advantage. might consist of several parts. This often results in lower cost and
Mass customization: Per the text, McDonald’s is trying this a minimum of tooling and assembly. This fast, low-cost produc-
in a limited way. Charles Schwab seems to be effective at tion may allow fast response to customer orders and lower inven-
this in the financial services areas. They seek competitive tory in the supply chain.
advantage via low cost and high customization. Disadvantages include all of the start-up problems one would
LO 7.1: Describe four process strategies expect from a radically new technology, including frequent design
AACSB: Application of knowledge changes and reliability problems. Additionally, the raw material as
13. Numerically controlled machinery means the equipment is well as final products made in this manner have little or no history
computer controlled via programming languages. As an added as to strength, durability, and design functionality; therefore,
note, machinery with its own programmable computer is some- engineering guidelines must be established.
times called computer numerically controlled (CNC), implying LO 7.5: Identify recent advances in production technology
that there is computer memory at the machine. Machines that are AACSB: Reflective thinking
wired to a central machine are called direct numerically controlled
(DNC) machines.
ETHICAL DILEMMA
LO 7.5: Identify recent advances in production technology
For a nice class discussion exercise, all you need is an animal
AACSB: Application of knowledge rights advocate to really get things going. Most students will agree
14. In an automatic identification system (AIS), bar codes, radio that this is not a nice way to treat animals.
frequency (RF) signals, and optical signals improve both accuracy However, to get things in perspective, you might point out that
and speed of data entry contributing to productivity. For instance, much egg production is also handled this way with chickens in small
costs are reduced because clerks spend less time keying in prices cages, and although we do not put steers in cages, we do confine
and quantities and do so with fewer errors. New services are being them to feedlots, and most bulls become steers. The advantage to
developed as these systems collect more information about society is that food (pork in this example) is prepared very economi-
customer behavior. cally, bringing lower-cost food and some protein to those who might
LO 7.5: Identify recent advances in production technology not otherwise be able to afford it. (Lack of protein is a contributor to
AACSB: Application of knowledge limited mental development.) The violence reaped upon animals in
the food chain is not confined to what homo sapiens do to hogs.
15. Technological advances include numeric control, process
Animals reap violence on others in their food chain.
control, vision systems, robots, automated storage and retrieval
systems, automated guided vehicles, flexible manufacturing Virtually all of those cows grazing peacefully in pastures and
systems, and computer-integrated manufacturing (CIM). chickens looking quaint in farmyards will come to a violent end.
That violent end is often why the investment is made in them.
LO 7.5: Identify recent advances in production technology
The alternatives are expensive; we don’t even take very good
AACSB: Application of knowledge care of many animals in zoos.
16. FMS is a system that uses electronic signals from a centralized
computer to automate production and material flow. A flexible man- ACTIVE MODEL EXERCISE
ufacturing system (FMS) usually refers to the manufacturing element
(a subsystem) within a larger computer-integrated manufacturing ACTIVE MODEL 7.1: Crossover Chart
(CIM) system. A CIM includes elements of computer-aided design, 1. Suppose Kleber Enterprises wants to lower the point of indif-
computer-aided engineering, computer-aided drafting, production, ference between Software A and Software B to 2,000 units. What
inventory control, etc., as well as flexible manufacturing systems. would the Fixed costs need to be for Software B?
LO 7.5: Identify recent advances in production technology $270,000
AACSB: Application of knowledge
2. Examine the graph. If the expected volume is 1,500 reports, 2.18x = 15,000
which process should be used? x = 6,881 = the exact quantity at the crossover point
Software A 7.6 (a)
3. Examine the graph. If the expected volume is 15,000 reports,
At 4,000 Units
which process should be used?
(arbitrary
Software C Units At 0 Units number)
4. As the fixed costs for developing Software B drop, what (A) Y = 800 + 1.10x 800 $5,200 Refurbish
happens to the graph? (B) Y = 1,100 + 0.70x 1,100 $3,900 Modify
The cost line for B drops and the area between the break- (C) Y = 1,800 + 0.4x 1,800 $3,400 New
even points for B widens. There is a wider range of volume
A
over which Software B is the best choice. $5,000
7.9 (a) Find break-even points, X. 7.10 (a) $85,000 + $1.25x = $44,000 + $1.75x
Mass customization: 1,260,000 + 60X = 120X X = 21,000 x = 82,000 units
Intermittent: 1,000,000 + 70X = 120X X = 20,000 (b) 60,000 $2.50 – [($1.25 60,000) + $85,000]
Repetitive: 1,625,000 + 55X = 120X X = 25,000 Loss of $10,000
Continuous: 1,960,000 + 50X = 120X X = 28,000 (c) 60,000 $2.50 – [($1.75 60,000) + $44,000]
Find least-cost process at X = 24,000 units. Profit of $1,000.
Fixed cost VC Units 7.11 (a) $ 75,000 + $16x = $60,000 + $20x
Mass customization: 1,260,000 + 60(24,000) = 2,700,000 x = 3,750 units
Intermittent: 1,000,000 + 70(24,000) = 2,680,000 (b) Machine A is preferable above 3,750 units
Repetitive: 1,625,000 + 55(24,000) = 2,945,000 (c) Machine B is preferable below 3,750 units
Continuous: 1,960,000 + 50(24,000) = 3,160,000 7.12 (a) $65,000 + $10x = $34,000 + $14x
Least-cost process: Intermittent process x = 7,750
(b) Proposal A is preferable. (Above a volume of 7,750,
24,
000
> 20,
000?
Yes. proposal A should be chosen.)
Anticipated Intermittent
production process
volume break-even point 7.13# (a) A fun topic, as students will add a lot of waiting. Flow
(b) Annual profit using intermittent process: is, of course, dependent upon the school but usually in-
$[120(24,000) – 2,680,000] = $200,000 cludes the following:
The intermittent process will maximize profit.
Annual profit: $200,000
7.14
7.17# Using the value stream map, Figure 7.6, as a starting point, VIDEO CASE STUDIES
analyze the opportunity for improvement and develop an improved
process.
Remove inventory, improve throughput by reducing setup, 1 PROCESS STRATEGY AT WHEELED COACH
reduce lot sizes, use pull techniques, and focus on only activities A 7-minute video filmed specifically for this text and case is
the customer is willing to pay for. Possible improvements include available in MyOMLab.
(1) driving the lot size down to 500 and trying to lower it even 1. The major auto companies are not in the custom design busi-
more if the supplier and shipping can do so efficiently; (2) getting ness, and ambulance volume is small compared with the
more frequent shipments from supplier, perhaps twice a week or volume of the big three U.S. auto manufacturers.
even each day; (3) shipping smaller lots; and (4) implementing a
LO 7.2: Compute crossover points for different processes
work cell that performs the machine, component mount, assemble,
test, and pack function on a one-piece-flow basis. AACSB: Analytical thinking
2. The traditional way to build specialized custom products such
CASE STUDY as autos was for the work to stand still and to bring the mate-
ROCHESTER MANUFACTURING’S PROCESS rial and parts to the workstation.
DECISION LO 7.1: Describe four process strategies
1. As a production manager for RMC, what do you recommend? AACSB: Application of knowledge
Why? 3. It is more efficient to prepare work modules and then deliver
As production manager, you believe that the inherent them to the assembly line than it would be to produce the
advantages of an FMS should tilt the scales in favor of FMS. components on the line because of all of the advantages of
Your management task should be easier and therefore better work cells. Work cells can be designed around the modules
because those parts of your workday that are related to (upholstery, wiring, or cabinetry work) with the necessary
scheduling, manpower, maintenance, and housekeeping supplies, talents, and machinery located in that particular
should require less direction and be easier to control. You “module.” Then the employees become experienced in those
would be inclined to ask the “numbers people” to be sure modules and the customized modules can be delivered to the
they included all of these relatively minor shop floor issues line as needed.
in the decision.
LO 7.1: Describe four process strategies
LO 7.5: Identify recent advances in production technology
AACSB: Application of knowledge
AACSB: Analytical thinking
4. Management sets high expectations for quality and provides
2. Prepare a case by a conservative plant manager for main- an extensive in-house training program to ensure the proper
taining the status quo until the returns are more obvious. talent is available. Because custom products require unique
A conservative plant manager may well be the individual in labor standards, they are set for each module and assembly
the decision-making process who is asked about the return area to ensure that the work at each station can be accom-
on investment. ROI may be largely the plant manager’s plished in the time allocated. Absentees, tardiness, and special
responsibility. If the numbers do not support change, then talents can play havoc with such a system.
don’t do it. Additionally, the trauma of change in layout,
LO 7.1: Describe four process strategies
training, and acceptance by workers contains numerous
hidden costs. Consequently, the plant manager may have a AACSB: Analytical thinking
strong case for the status quo.
LO 7.5: Identify recent advances in production technology
AACSB: Analytical thinking
3. Prepare the case for an optimistic sales manager who sug-
gests that you should move ahead with the FMS now.
The optimistic sales manager’s case is that improved deliv-
ery time (i.e., improved throughput) and improved quality
may well yield a higher market share, which, if the company
is already above break-even, is great for profitability, and
hence ROI will be higher than projected (sales growth is not
typically included in ROI computations). Additionally, the
management task is easier (i.e., fewer machines to maintain,
fewer people to supervise), and additional floor space will be
available when needed.
LO 7.5: Identify recent advances in production technology
AACSB: Analytical thinking
2. If the mother is scheduled for a Caesarean-section birth 4. Describe in detail a process that the hospital could analyze
(i.e., the baby is removed from the womb surgically), how would besides the one mentioned in this case.
this flowchart change? Many options are available to the student, including the hundreds
See Step 7 of the flowchart for Question 1, on next page. of processes charted by hospital staff such as: forms needed under
LO 7.3: Use the tools of process analysis various situations, vacated room turnaround, admissions, invento-
ry, delivery of foodservice, and information requirements (for the
AACSB: Application of knowledge
patient and information from the patient). See the “Maternal and
3. If all mothers were electronically (or manually) preregistered, Newborn Required Information...” figure below for an example of
how would the flowchart change? Redraw the chart to show how to document information requirements.
your changes.
LO 7.3: Use the tools of process analysis
Dispense with Step 2b. AACSB: Analytical thinking
LO 7.3: Use the tools of process analysis
AACSB: Analytical thinking
—Copyright by Dodd, Mead & Co., New York, and used by special
arrangement.
THE FIRST FURROW
By James J. Montague
Don’t you ever feel a yearnin’, ’long about this time o’ year,
For a robin’s song to tell you that the summer time is near?
Don’t you ever sort o’ hanker for the blackbird’s whistlin’ call,
Echoin’ through the hillside orchard, where the blossoms used to
fall?
Don’t you wish that you were out there, breathin’ in the April air,
Full o’ glad an’ careless boyhood, an’ with strength an’ health to
spare?
Don’t it hurt you to remember, when the springtime comes around,
How the first, long, rollin’ furrow used to wake the sleepy ground?
How’d you like to take the children, born to dirty city streets,
Out to where the brook goes pulsin’ when the heart o’ nature beats?
How’d you like to watch ’em wonder at the boomin’ of the bees,
Or to see ’em dodge the petals that are snowin’ from the trees?
How’d you like to see their faces catch the color o’ the rose,
As they raced across the meadow where the earliest crocus grows?
Wouldn’t it be joy to watch ’em follow on behind the plow,
As it cut the first brown furrow, like it’s doin’ out there now?
SUNSHINE
By Fred Emerson Brooks
“CICELY”
ALKALI STATION
By Bret Harte
I’ve had some mighty mean moments afore I kem to this spot,—
Lost on the plains in ’50, drowned almost, and shot;
But out on this alkali desert, a hunting a crazy wife,
Was ra’ly as on-satis-factory as anything in my life.
Listen! thar’s the same music; but her lungs they are stronger now
Than the day I packed her and her mother,—I’m derned if I jest know
how.
But the doctor kem the next minit, and the joke o’ the whole thing is
That Cis. never knew what happened from that very night to this!
But Cicely says you’re a poet, and maybe you might, some day,
Jest sling her a rhyme ’bout a baby that was born in a curious way,
And see what she says; but, old fellow, when you speak of the star,
don’t tell
As how ’twas the doctor’s lantern,—for maybe ’twon’t sound so well.
RECIPROCITY
By H. Bedford-Jones
HULLO!
By Sam Walter Foss
COLUMBUS
By Arthur Hugh Clough
Then he sat down beside her, and an hour or two went by,
But still upon the grassy brink his rod and line did lie;
“I thought,” she shyly whispered, “you’d be fishing all the day!”
And he was—in the usual way.
So he gravely took his rod in hand and threw the line about,
But the fish perceived distinctly he was not looking out;
And he said, “Sweetheart, I love you,” but she said she could not
stay,
But she did—in the usual way.
Then the stars came out above them, and she gave a little sigh
As they watched the silver ripples like the moments running by;
“We must say good-by,” she whispered by the alders old and gray.
And they did—in the usual way.
And day by day beside the stream, they wandered to and fro,
And day by day the fishes swam securely down below,
Till this little story ended, as such little stories may,
Very much—in the usual way.
And now that they are married, do they always bill and coo?
Do they never fret and quarrel, like other couples do?
Does he cherish her and love her? Does she honor and obey?
Well, they do—in the usual way.
HUMOROUS SELECTIONS IN POETRY
A SIMILAR CASE
Anonymous
IRISH CASTLES
By Fitz-James O’Brien