Professional Documents
Culture Documents
CH 07
CH 07
Management
Chapter 7 –
Process Strategy
PowerPoint presentation to accompany
Heizer/Render
Principles of Operations Management, 6e
Operations Management, 8e
© 2006
© 2006 Prentice
Prentice Hall, Inc. Hall, Inc. 7–1
Outline
Global Company Profile: Dell
Computer Co.
Four Process Strategies
Process Focus
Repetitive Focus
Product Focus
Mass Customization Focus
Comparison of Process Choices
© 2006 Prentice Hall, Inc. 7–2
Outline – Continued
Technology In Services
Process Redesign
Ethics And Environmentally
Friendly Processes
Customer sales
Purchasing
representative
Vendors
PREPRESS DEPT
Accounting Receiving
PRINTING DEPT
Warehouse
High
Many variety
inputs of
outputs
Raw Modules
materials combined
and for many
module output
inputs options
Few
modules
Figure 7.3
© 2006 Prentice Hall, Inc. 7 – 18
Product Focus
Facilities are organized by product
High volume but low variety of
products
Long, continuous production runs
enable efficient processes
Typically high fixed cost but low
variable cost
Generally less skilled labor
© 2006 Prentice Hall, Inc. 7 – 19
Product Focus
Bottling Plant
Output
variation
Many in size,
inputs shape,
and
packaging
B
C Electric
Ladle of molten steel furnace
H G
I
Table 7.2
© 2006 Prentice Hall, Inc. 7 – 22
Comparison of Processes
Process Repetitive Product Focus Mass
Focus Focus (High-volume, Customization
(Low volume, (Modular) low-variety) (High-volume,
high variety) high-variety)
Table 7.2
© 2006 Prentice Hall, Inc. 7 – 23
Comparison of Processes
Process Repetitive Product Focus Mass
Focus Focus (High-volume, Customization
(Low volume, (Modular) low-variety) (High-volume,
high variety) high-variety)
Table 7.2
© 2006 Prentice Hall, Inc. 7 – 24
Comparison of Processes
Process Repetitive Product Focus Mass
Focus Focus (High-volume, Customization
(Low volume, (Modular) low-variety) (High-volume,
high variety) high-variety)
Table 7.2
© 2006 Prentice Hall, Inc. 7 – 25
Comparison of Processes
Process Repetitive Product Focus Mass
Focus Focus (High-volume, Customization
(Low volume, (Modular) low-variety) (High-volume,
high variety) high-variety)
Table 7.2
© 2006 Prentice Hall, Inc. 7 – 26
Comparison of Processes
Process Repetitive Product Focus Mass
Focus Focus (High-volume, Customization
(Low volume, (Modular) low-variety) (High-volume,
high variety) high-variety)
Table 7.2
© 2006 Prentice Hall, Inc. 7 – 27
Mass Customization
Modular techniques
Mass Customization
Effective Rapid
scheduling throughput
techniques techniques
Process-Focused Product-Focused
High variety, low volume Low variety, high volume
Low utilization (5% to 25%) High utilization (70% to 90%)
General-purpose equipment Specialized equipment
t
os
$
t
c
os
tal st
l co
lc
To Tot a
ta
To
400,000
300,000
200,000
Fixed cost Fixed cost Fixed cost
Process A Process B Process C
Figure 7.6 (2,857) V1 V2 (6,666) Volume
© 2006 Prentice Hall, Inc. 7 – 31
Changing Processes
Process
Sales order
Production Wait
control
Plant A Print
Plant B Extrude
Process
Sales order
Production
control Wait
Warehouse Wait
Transport Move
Figure 7.8
© 2006 Prentice Hall, Inc. 7 – 36
Service Blueprint
Yes Yes
Perform
Level required work
#3
Figure 7.9
© 2006 Prentice Hall, Inc. 7 – 38
Process Analysis Tools
Flowcharts provide a view of the
big picture
Time-function mapping adds rigor
and a time element
Value stream analysis extends to
customers and suppliers
Process charts show detail
Service blueprint focuses on
customer interaction
© 2006 Prentice Hall, Inc. 7 – 39
Service Process Matrix
Degree of Customization
Low High
Mass Service Professional Service
Private
banking
Commercial
banking
High General-
Full-service purpose law firms
stockbroker
Degree of Labor
Boutiques
Retailing
No frills
Figure 7.10 airlines
© 2006 Prentice Hall, Inc. 7 – 40
Service Process Matrix
Mass Service and Professional Service
Labor involvement is high
Selection and training highly important
Focus on human resources
Personalized services
Service Factory and Service Shop
Automation of standardized services
Low labor intensity responds well to
process technology and scheduling
Tight control required to maintain
standards
© 2006 Prentice Hall, Inc. 7 – 41
Improving Service
Productivity
Strategy Technique Example
Separation Structure service so Bank customers go to
customers must go a manager to open a
where service is new account, to loan
offered officers for loans, and
to tellers for deposits
Self-service Self-service so Supermarkets and
customers examine, department stores,
compare, and internet ordering
evaluate at their own
pace
Table 7.3
© 2006 Prentice Hall, Inc. 7 – 42
Improving Service
Productivity
Strategy Technique Example
Postponement Customizing at Customizing vans at
delivery delivery rather than at
production
Focus Restricting the Limited-menu
offerings restaurant
Modules Modular selection of Investment and
service, modular insurance selection,
production prepackaged food
modules in
restaurants
Table 7.3
© 2006 Prentice Hall, Inc. 7 – 43
Improving Service
Productivity
Strategy Technique Example
Automation Precise personnel Automatic teller
scheduling machines
Scheduling Precise personnel Scheduling ticket
scheduling counter personnel at
15-minute intervals at
airlines
Training Clarifying the service Investment counselor,
options, explaining funeral directors,
how to avoid after-sale
problems maintenance
personnel
Table 7.3
© 2006 Prentice Hall, Inc. 7 – 44
Equipment and Technology
Computer-
OM runs the
aided design
CIM
production
(CAD) designs
process
the product
Management
Information
System
FMS
Computer-aided
manufacturing Automated storage and Robots put
(CAM) retrieval system (ASRS) the product
and automated guided together
vehicles (AGVs)
© 2006 Prentice Hall, Inc. 7 – 59
Technology in Services
Service Industry Example
Financial Debit cards, electronic funds transfer,
Services ATMs, Internet stock trading
Education Electronic bulletin boards, on-line journals
Utilities and Automated one-man garbage trucks, optical
government mail and bomb scanners, flood warning
systems
Restaurants and Wireless orders from waiters to kitchen,
foods robot butchering, transponders on cars that
track sales at drive-throughs
Communications Electronic publishing, interactive TV