PROCESS AND

C A PA C I T Y
DESIGN
CONTENTS
PROCESS DESIGN

PROCESS STRATEGIES

PROCESS TOOLS

CAPACITY PLANNING
 The heart of operations management (OM).*
PROCESS Process of creating and improving systems which
DESIGN will convert inputs into outputs.**
It must be flexible enough to accommodate changes
in inputs or outputs.
The objective of process design is to create a
system that is efficient and effective.***
It is essential for several reasons:
An effective process design can improve

PROCESS DESIGN
production efficiency and help reduce costs.
A well-designed process can enhance the
quality of the final product or service.
An efficient approach can help to reduce lead
times and increase customer satisfaction.

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PROCESS
S T R AT E G Y
PROCESS STRATEGY*
Is an organization’s approach to transforming
resources into good and services.

The objective of a process strategy is to build a

PROCESS DESIGN
production process that meets customer
requirements and product specification within
cost and other managerial constraints.

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TYPES OF
PROCESS
S T R AT E G I E S
PROCESS FOCUS

PROCESS DESIGN
REPETITIVE FOCUS
PRODUCT FOCUS
MASS CUSTOMIZATION FOCUS

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 PROCESS FOCUS
This strategy is devoted to making low-volume but high variety products. This is
often called as job shops.
The facility is organized around specific activities yet interconnected processes.
This is most commonly used when the product being produced is unique for each
customer, therefore a high degree of product flexibility.*

P R E S E N TAT I O N T I T L E
Requires high skilled personnel. **

Examples:
1) In a business, making custom guitars or bicycles based on the customers
measurements and preferences of materials and components.
2) In a factory, the processes are devoted to welding, grinding, and painting.
3) In an hospital, patients being routed to specialized departments, treated in a distinct
way, then exiting uniquely cared individuals.

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 PROCESS FOCUS
( L O W V O L U M E , H I G H V A R I E T Y,
INTERMITTENT PROCESS)

Arnold Palmer
Hospital

P R E S E N TAT I O N T I T L E
Many inputs Many different outputs
(surgeries, sick (uniquely treated patients)
patients, baby
deliveries,
emergencies)

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PROCESS FOCUS
PROS AND CONS
Advantages:
Greater product flexibility
More general purpose equipment
Lower initial capital investment

P R E S E N TAT I O N T I T L E
Disadvantages:
More highly trained personnel
More difficult production, planning and control
Low equipment utilization (5% to 25%)

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 REPETITIVE FOCUS
This is a classic assembly line where products produced are more standardized in
nature. *
Usually, the output is high.
The skills level of employees is usually low because this usually use automation
which are highly standardized but requires multi-tasking and concentration.

P R E S E N TAT I O N T I T L E
This has more structure and consequently less flexible than a process-focused facility.
More efficient by using modules which are the components of a product previously
prepared.

Examples:
1) Assembly lines for automobiles, electronics, motorbikes like Harley Davidson.

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 REPETITIVE FOCUS
(MODULAR)
Harley-Davidson Raw material and
module inputs

Multiple engines, and wheel modules

P R E S E N TAT I O N T I T L E
Few
modules

Modules combined for many outputs

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(many combination of motorcyles)
 PRODUCT FOCUS
Produces a high volume, low variety processes.
This requires a very long and continuous production runs. *
This business commonly focused to produce, improve and enhance the existing
products rather than focusing on new ones

P R E S E N TAT I O N T I T L E
Examples:
1) Frito Lays

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 PRODUCT FOCUS
( L O W V O L U M E , H I G H V A R I E T Y,
CONTINUOUS PROCESS)
Few Inputs
Frito Lay’s
Corn, potatoes,
water, seasoning

P R E S E N TAT I O N T I T L E
Output variations in
size, shape and
packaging)

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 M A S S C U S T O M I Z AT I O N F O C U S
Mass customization model of production which combines low-cost high volume of
output.
The flexibility of mass customization enables the customer or retailer to mix and
match the modules into different configurations and eventually realize a final custom-
made product.

P R E S E N TAT I O N T I T L E
Usually the use of computer-aided manufacturing systems is what permits this
customization.
A key requirement for successful mass customization is a modular design to allow
fast seamless change from each product to the next.

Example:
1. Furniture companies offers mass customization by providing multiple options for
various components or features.

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PROCESS
A deeper analysis is needed to understand the
complexities of process design. These can be
TOOLS done by using a number of process tools. They
are simply ways of making sense of what
happens or must happen in a process.

4 Process Tools:
1. Flow Chart

PROCESS DESIGN
2. Time Function Mapping
3. Value Stream Mapping
4. Process Charts

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 FLOW CHART
Schematic or drawing of the
movement of material, product
and people
These charts can help in the
understanding, analysis and

P R E S E N TAT I O N T I T L E
communication of a process.

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TIME FUNCTION MAPPING
Time function mapping uses flow
charts but with added time on the
horizontal axis.
Nodes indicates the activities and
the arrows indicate the flow

P R E S E N TAT I O N T I T L E
direction with time on the
horizontal axis.
This tool allows the process
designers to identify and
elimiminate waste such as extra
specs, duplication and delay.

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VA LU E - S T R E A M M A P P I N G
This is a variation of time function mapping.
VSM takes an expanded look at where the
value is added in the entire production
proccess.
In VSM, the analysis is extended back to the

P R E S E N TAT I O N T I T L E
suppliers.
It takes into account not only the process but
also the management decisions and information
system that support the process.

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 PROCESS CHARTS
Process charts uses symbol, time, distance to
provide an objective and structures way to
analyze and record the activities that make up a
process.
This mainly focus on the value – added

P R E S E N TAT I O N T I T L E
activities.

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 Capacity

C A PA C I T Y This is the throughput or number of units a facility

PLANNING can hold, receive, store or produce in a given time.

Capacity Planning

A capacity planning process involves determining

how much production capacity is required to meet
changing demand for products.

PROCESS DESIGN
Design capacity refers to an organization's
maximum capacity to accomplish work over a given
time period in capacity planning.

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 D E S I G N A N D E F F E C T I V E C A PA C I T Y
Design Capacity Effective Capacity
is the maximum theoretical output of a system in a Capacity a firm expects to achieve given the current
given period under ideal conditions. operating constraints.
Normally expressed as a rate, such as the number of This lower than the design capacity due to the
tons of steel that can be produced per wee, per month, following conditions:
or per year. Facility may have been designed with the earlier

P R E S E N TAT I O N T I T L E
Utilization if the measure of performance where actual version of the product.
Product Mix
output is divided by the design capacity
Efficiency is the measure of performance where actual
output is divided by the effective capacity.

Example:
Ian’s Bistro has a table set of 2 or 4 chairs seating a total of 270 guests. While the seats are never filled that way, the design capacity is still 270.
At some instances that some tables will have 1 to 3 guests, tables can be pulled together for parties of 6 to 8, Effective capacity is close to 220, which is 81% of
design capacity.

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 C A PA C I T Y C O N S I D E R AT I O N S
1. Forecast Demand Accurately:
An accurate forecast is paramount to the capacity decision. Forecast will provide a closer estimate to the Management of the resources
needed to deliver the good and services to the customer based on the customer requirements.
2. Understand the technology and capacity increments
This consideration overall impacts the cost and dictates the capacity increments.

P R E S E N TAT I O N T I T L E
3. Find the optimum operating size (volume)
Technology and capacity increments often dictate the optimal size for a facility.
4. Build for Change
The facility and equipment to be allocated and determined shall be able to cater the fast-paced world of technology.

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 MANAGING DEMANDS
Capacity excess demand
Demand excess Capacity
The firm may want to stimulate demand through price
The firm may be able to curtail demand simply by
reductions or aggressive marketing.
rising pricess, scheduling long lead times and
discouraging marginally profitable business.
In the long-term solution is usually to increase

P R E S E N TAT I O N T I T L E
capacity

Tactics for Matching Capacity to Demand

1. Making staff changes
2. Adjusting equipment
3. Improving processes to increase throughput
4. Redesigning products to facilitate more throughput.
5. Adding process flexibility to better meet changing product preferences.

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6. Closing Facilities
 B O T T L E N E C K A N A LY S I S A N D
T H E O RY O F C O N S T R A I N T S
Theory of Constraints
Bottleneck
Body of knowledge that deals with anything that
This is a key concept in capacity analysis.
limits or constraints an organization’s ability to
This is an operation that is limiting factor or
achieve goals.
constraint. *
Physical constraints: process, personnel availability,
Lowest effective capacity of the operations which
raw materials, or supplies

P R E S E N TAT I O N T I T L E
impacts the overall output and committed delivery.
Non-physical constraints: procedures, morale and
training.

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 Realyn Austria
T H A N K YO U

24 P R E S E N TAT I O N T I T L E