Unit II

Operations Processes: Process

Characteristics in Operations
Prof. Sujeet Subhash Tambe
B.E(Chemical), M.M.S(Operations), UGC-NET(Management), SET(Management), Ph.D (Pursuing)
Navsahyadri Group of Institutes,
Faculty of Management – MBA
Savitribai Phule Pune University
 Operations Process
• Process is the mechanism behind transforming
inputs into output.
• A Process is an arrangement of resources that
produces some mixture of goods and services.
• Operation=Process 1+Process2 +…+Process N
• Each Process is an internal supplier
and internal customer for other processes.
• Satisfying Internal customer will lead
to satisfying ultimate consumer.
Operations Process: Inputs

Manpower

Money Machine
Input
M’s

Material Method
 Operations Process: Inputs
Planning
Involves forecasting, identification, alternatives,
selection . Etc. (Itself is a Process has I/P- Forecasting
models, decision tree, operations research models)

Technology
Involves attainment, up gradation, adaptation,
improvement of technology. (R & D , Tech Ma Dept. uses
inputs such as technology forecasting, PLC etc.)

Time
Very critical while making business promise, E.g. Same
day delivery. (Processing time, lead time, waiting time,
Schedule of delivery Etc.)
 Transformation Process
It is the conversion process that converts
inputs into output. Management
should
processes make and effective
efficient these as per
requirement to maximize the The
profits. influencing processors are: factors
• Location: At which conversion processes are
carried out. Eg. Plant, here plant location, layout,
buildings, plant facilities etc. factors affects the
conversion process.
• MHS: Selection, Capacity, layout, accounting and
replacement.
 Transformation Process
• Product-Mix: The primary concern of the
processors is the product-mix. Decisions on
product mix are influenced by market potential ,
capacity, competition. Managers uses various
tools to determine optimum product mix. E.g.
Operations research tools.
• Cost related to labor, inventory, production: To
calculate labor cost method study, work study
techniques are used, production costs are
associated with production cost & overheads.
Inventory cost are highest contributor to product
cost (60% +) hence tight control is essential.
 Outputs
• It is the end result in terms finished goods or
consumable services for immediate customers
and then it processed into final finished form. E.g.
concept of internal customer in hotels.
• Some factors influence output are:
 Price
 Delivery
 Quality
 Profitability
 Transformation Process for Manufacturer

Inputs
Material, equipments, labor, technology

Quality of inputs monitored

Random Disturbances: Strikes, riots,
power failure, environment.
Transformation
Process
Quality of outputs monitored

Outputs
Machines, chemicals, consumer goods, scrap

Feedback Mechanism: Customer satisfaction survey, Increase in demand, customer complaints

 Volume Variety
Flow
Volume:
• Volume refers the average quantity of
products
to produced in the
manufacturing system.
• Low volume: Buildings, Film production agency.
• Medium Volume: Automobile, Auto component
• High Volume: Pharma, FMCG etc.
 Volume Variety
Flow
Variety:
• No. of alternatives and variants of each product
that are produced in a manufacturing systems.
Variants of Samsung grand, neo etc. similarly for
services hotels improves variety of offerings with
respect to increasing popularity.
• Variety in various process in the system.
• Planning and can become
scheduling complex more these choices
operating
on system.
account in the
of
 Volume Variety
Flow
Flow:
• Flow indicates the nature and intensity of
phenomenon of transformation process, and
provides an understanding of how materials gets
converted into finished goods stage.
• Understanding flow of process provides clues
for production planning and control involved in
complex operation processes.
• E.g. Flow involved in operations of making the
tea, flow involved in Supply Chain of Thyrocare.
 Volume Variety
Flow
Volume-Variety Relationship:
• Volume high, fewer varieties of products.
• Wide variety of flow and services, volume is low.
• Volume and variety affects flow patterns in a
manufacturing system, process design choices
available to an operations manager by studying
flow patterns and choosing the optimum
pattern.
 Types of processes and operations system
Continuous Flow System Intermittent flow system
• Assembly lines • Project
• Mass Production • Batch Production
• Continuous Flow • Job/Job shop production
– Synthetic Production
– Analytic Production

46
 Process Product Matrix

Not Economical

Not Flexible

The Product-Process Matrix was first introduced by Robert Hayes and Steven
Wheelwright in the Harvard Business Review in 1979.
Facility
Location• The is to choose a
location
goal that minimizes costs
while increasing operational
efficiencies and product
quality.
• To accomplish this goal,
management must consider
such regional costs as land,
construction, labor, local
taxes, energy, and local living
standards.
• In addition, management
must consider whether the
local labor pool has the skills
that the firm needs.
 Objectives of Facility
Layout
• A facility layout problem may have many
objectives. In the context of manufacturing
plants, minimizing Material handling costs is
the most common one.
• Includes efficient utilization of labor and
space. (Per sq. ft area of plant)
• Eliminate waste or redundant movement and
bottlenecks.(Weakest element in the link, Eg.
Chain, CPM-PERT in projects)
 Objectives of Facility
• Layout
Facilitate: Organization structure (According to
trade), communication and interaction between
workers, manufacturing process and visual
control( Andon signals, visual factory)
• Provide: convenience, safety and comfort of the
employees, flexibility to adapt to changing
conditions( Change in technology)
• Minimize: Manufacturing cycle time or
customer flow time, accidents, investment
(Unidirectional flow and lesser cross trafficking
and linkages)
 Importance of Facility
Layout
• Economical MHS: Material handling major
is
Minimization for
contributor of long distance
higher movements costs.
manufacturing best
handling principle is no handling.
• Improved quality control: Specific quality control
and inspection check required for particular
operations. E.g. operation specific for drilling
operation quality check in terms of measuring the
bore size.
• Better Supervision: Better/ full view of the plant
and better control over manpower handling.
 Importance of Facility
Layout
• Effective use of floor area: every sq. cm area
is to be utilized in such a manner which will
maximize labor utilization (calculation of
every single minute spent Work/Method study
techniques) by multiple operations handled
by them at a time.
• Minimum equipment investment: Planned
machine balance and loading and location ( in
order to minimize the MHS).
Factors Affecting facility layout
changes
Management
Policy

Arrangement Manufacturing
of MHS process

Layout
Changes

Type of
Nature of
equipment and
product
infrastructure

Volume of
Production
 Basic types of
Layouts
A. Process Layout
A. Used in a job shop for a low volume,
customized products

B. Product Layout
A. Used in a flow shop for a high volume,
standard products
Process
Layout
Product
Layout
 Basic Types of
Layouts
C. Fixed Position Layout
C. Used in projects for large products e.g.,
airplanes, ships and rockets

D. Cellular layouts
C. A cell contains a group of machines
dedicatedfor a group of similar parts
D. Suitable for producing a wide variety parts in moderate
volume

Hybrid or Combined Layout: Combination of layouts.

Cellular
Layout
 Fixed
Position

http://www.scrigroup.com/limba/engleza/105/Production-of-Quality-Goods-an65429.php
 Factors Ty p e of La y ou t
Fixe d Position Product (Line) Cellular ( G T ) Process (Functional)

1. Ty p e of Ship building, Continuous and Small to m e di um J ob or small batch

Operation Large scale repetitive batch
project,
Construction or
Industrial project
2. Facilities m o v e s to Placed along the Similar parts are Grouped by
A r r a n g e m e n t of a fixed product/ line of product flow groupe d in part- specialty
facilities project f a m i l y. F o r e a c h
part-family o n e
m a c h i n e cells is
formed which
c o n t a i n s a ll
facilities n e e d e d b y
corresponding
part-
f a m i l y.

3. Cost of Moderate to low Moder ate to high Moderate to high Moderate to low
layout
4. Material Moderate Less Less High
handling
5. Material Va r i a b l e p a t h Fixed path Fixed path Va r i a b l e p a t h
travel
6. Moderate Ve r y h i g h High Low
Utilization of
facilities
7. General purpose Special purpose Special purpose General purpose
O p e r a tin g facilities
8. Unskilled/skilled Unskilled Multi-skilled as o n e Skilled
E m p l o y e e s k il l operator m a y
handle more than
o ne operation
9. (Q/P) Normally I as Large (Q/P) Moderate (Q/P) Small (Q/P)
ratio : Q is single product
production production
Quantity P is
n u m b e r of products
or variety
www.transtutors.com/homework-help/industrial-management/plant-layout/comparison-of-plant- 61
layouts.aspx
 Services System
• Design
Designing Service system is a creative process.
It is the way in service concept and service
package are provided to the consumer. E.g.
Thyrocare pathology labs or visit to the BBQ.
(Attempt to give special / standardized
Experience to the customer)
• The service delivery system is dictated by and
defined by the service concept includes core
service (food), supporting good and services
(ambience), facilitating goods and services
(billing), role of staff (waiter), consumer
e
3/31 / 64
 Service System
• Two Design that affects the design of
dimensions
an appropriate delivery system are as follows:
1. Characteristic of the Market:
 Technical Dimension: Whatexactly
comprises services (specification by
thyrocare
in labs related to blood sample)
 Business Dimension: How operations decide
to provide a service (No. of vehicles to handle
the cargo)+ criteria to get considered by
customers (Cost and Service levels)related to
3 PL services provided. 65
 Service System
Design
• Two dimensions that affects the design of an
appropriate delivery system are as follows:
2. Service Complexity: The complexity of a
service itself will directly impacts the number
of steps to complete it. Some services are
simple in nature e.g. Experience of eating food
in canteen and some are very complex
processes. E.g. Experience of eating food in
Five star hotel.
66
 Service System Design
Matrix
Low
Trucking Service
Labor Intensity

Mass Factor
Service y
College, Ba
Hospitals Service Shop
nki
ng
Professional Doctor,
High Service Financial Analyst
High Customization Low

Designing service system is function of Location, facility

design
and layout, Quality, equipment selection, service capacity etc. 67
one of the major factor is Frequency of the
Factors involved in Service System
Design
Technology/
People Mix

Nature of
the services Complexity
delivered of
Services

Service

Syste
Order m
winning vs. Design Categories
Order of
qualifying Services

Volumes
 Design of Services
System
Two types of design:
A. Overall Design
 The Market: External factors that affects
services. Eg. Toy Library in emerging zone.
 The Services Encounter (Where and what is
delivered - setting expectations) and
Experience(The reality)
 Retention. (Repetitively providing same
experience without fail)
 Design of Services
System
Two types of design:

B. Detailed Design: Two principal phases are

1. Back office or front office: Canteen
2. The delivery system
 Elements of Services System
Design
• Facility layout and locations
• Servicescape
• Service process and Design
• Technology and IT support
• Organizational Support

Stages in services delivery design?

 Tools for Designing Service
System
• Services Blueprinting: Designing Services That
Deliver written by G. Lynn Shostack in Jan
1984 issue.
• The blueprint is most useful to managers
developing new services, others can apply the
same principles to test the quality of services
for which they contract/ existing.
• The involve are disused as A.
Identifying d
issues B. Isolating the fail
processes the time
points C. Establishing D
.Analyzing the Profitability frame
Service Blueprinting
Line of
Interaction

Line of
Visibility

Service
Blueprint
Front
Office

Back
Office
 Service Blueprint for Shoeshine services

/31/2016 Source: https://hbr.org/1984/01/designing-services-that-deliver/ar/1 73

Profitability Analysis for given example
 Tools for Designing Service
System
• QFD: Quality Function Deployment is, a focused
methodology for carefully listening to the voice of
the customer and then effectively responding to
those needs and expectations. It has four phases
namely Product Planning, Part Development, Process
Planning, Production Planning.
• The house of quality is a kind of conceptual map that
provides the means for inter-functional planning and
communications.
• People with different problems and responsibilities
can thrash out design priorities while referring to
patterns of evidence on the house’s grid.
 House Of
Quality
Interrelationship
between
Technical
Descriptors
Technical Descriptors
(Voice of the organization)

Requirements
Requirement
s (Voice of

Prioritized
Customer)

Customer
Customer

Relationship between
the

Requirements and
Descriptors

Prioritized Technical
Descriptors

QFD is converting the customers requirement into technical specification

Tools for Designing Service
System
• Servicescape: developed by Booms and
Conceptto emphasize the impact of the physical
Bitner
environment in which service process takes place. It
includes facilities exterior and interior environment.
E.g. Eating the food in McDonalds and local burger
shop. Framework follows SOR Theory:
1.Stimulus=Physical Evidence
2. Organisms=Customers and employee’s response
to stimuli
3.Response= Changed/ unchanged behavior
depending customerand employees
reactions
on to physical evidence. internal
77
Same as landscape development
Tools for Designing Service
System
• Waiting line analysis: Customer enters into
the system wait in for queue for next available
server as per queue discipline customer is
selected for service and customer leaves the
system. System should be such that
discourage customers should be minimized.
E.g. Waiting in restaurants