Heizer_om13_ppt_07.pptx

Operations Management: Sustainability and Supply Chain Management Thirteenth Edition Chapter 7 Process Strategies Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Outline (1 of 2) • Global Company Profile: Harley-Davidson • Four Process Strategies • Selection of Equipment...

Operations Management: Sustainability and Supply Chain Management Thirteenth Edition Chapter 7 Process Strategies Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Outline (1 of 2) • Global Company Profile: Harley-Davidson • Four Process Strategies • Selection of Equipment • Process Analysis and Design • Special Considerations for Service Process Strategies Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Outline (2 of 2) • Production Technology • Technology in Services • Process Redesign Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Harley-Davidson • The only major U.S. motorcycle company • Emphasizes quality and lean manufacturing • Materials as Needed (MAN) system • Many variations possible • Tightly scheduled repetitive production Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Process Strategy The objective is to create a process to produce offerings that meet customer requirements within cost and other managerial constraints Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Process Strategies (1 of 2) • How to produce a product or provide a service that – Meets or exceeds customer requirements – Meets cost and managerial goals • Has long-term effects on – Efficiency and production flexibility – Costs and quality Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Process, Volume, and Variety Figure 7.1 Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Process Strategies (2 of 2) Four basic strategies 1. Process focus 2. Repetitive focus 3. Product focus 4. Mass customization Within these basic strategies, there are many ways they may be implemented Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Process Focus (1 of 2) • Facilities are organized around specific activities or processes • General purpose equipment and skilled personnel • High degree of product flexibility • Typically high variable costs and low equipment utilization • Product flows may vary considerably, making planning and scheduling a challenge Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Process Focus (2 of 2) Figure 7.2(a) Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Repetitive Focus (1 of 2) • Facilities often organized as assembly lines • Characterized by modules with parts and assemblies made previously • Modules may be combined for many output options • Less flexibility than process-focused facilities but more efficient Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Repetitive Focus (2 of 2) Figure 7.2(b) Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Product Focus (1 of 2) • 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 Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Product Focus (2 of 2) Figure 7.2(c) Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Mass Customization (1 of 4) • The rapid, low-cost production of goods and services to satisfy increasingly unique customer desires • Combines the flexibility of a process focus with the efficiency of a product focus Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Mass Customization (2 of 4) Figure 7.2(d) Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Mass Customization (4 of 4) • Imaginative product design • Flexible process design • Tightly controlled inventory management • Tight schedules • Responsive partners in the supply chain Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Comparison of Processes (1 of 4) Table 7.2 Comparison of the Characteristics of Four Types of Processes PROCESS FOCUS (LOW-VOLUME, HIGH-VARIETY; e.g., ARNOLD PALMER HOSPITAL) REPETITIVE FOCUS (MODULAR; e.g., HARLEYDAVIDSON) 1. Small quantity and large variety of products 1. Long runs, a standardized product from modules 1. Large quantity and small variety of products 1. Large quantity and large variety of products 2. Broadly skilled operators 2. Moderately trained employees 2. Less broadly skilled operators 2. Flexible operators PRODUCT FOCUS (HIGH-VOLUME, LOW-VARIETY; e.g., FRITO-LAY) MASS CUSTOMIZATION (HIGH-VOLUME, HIGH-VARIETY; e.g., DELL COMPUTER) Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Comparison of Processes (2 of 4) Table 7.2 Comparison of the Characteristics of Four Types of Processes PROCESS FOCUS (LOW-VOLUME, HIGH-VARIETY; e.g., ARNOLD PALMER HOSPITAL) REPETITIVE FOCUS (MODULAR; e.g., HARLEYDAVIDSON) 3. Instructions for each job 3. Few changes in the instructions 3. Standardized job instructions 3. Custom orders requiring many job instructions 4. High inventory 4. Low inventory 4. Low inventory 4. Low inventory relative to the value of the product PRODUCT FOCUS (HIGH-VOLUME, LOW-VARIETY; e.g., FRITO-LAY) MASS CUSTOMIZATION (HIGH-VOLUME, HIGH-VARIETY; e.g., DELL COMPUTER) Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Comparison of Processes (3 of 4) Table 7.2 Comparison of the Characteristics of Four Types of Processes PROCESS FOCUS (LOW-VOLUME, HIGH-VARIETY; e.g., ARNOLD PALMER HOSPITAL) REPETITIVE FOCUS (MODULAR; e.g., HARLEYDAVIDSON) PRODUCT FOCUS (HIGH-VOLUME, LOW-VARIETY; e.g., FRITO-LAY) 5. Finished goods are made to order and not stored 5. Finished goods are made to frequent forecasts 5. Finished goods are made to a forecast and stored 5. Finished goods are build-to-order (BTO) 6. Scheduling is complex 6. Scheduling is routine 6. Scheduling is routine 6. Sophisticated scheduling accommodates custom orders MASS CUSTOMIZATION (HIGH-VOLUME, HIGH-VARIETY; e.g., DELL COMPUTER) Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Comparison of Processes (4 of 4) Table 7.2 Comparison of the Characteristics of Four Types of Processes PROCESS FOCUS (LOW-VOLUME, HIGH-VARIETY; e.g., ARNOLD PALMER HOSPITAL) 7. Fixed costs are low and variable costs high REPETITIVE FOCUS (MODULAR; e.g., HARLEYDAVIDSON) PRODUCT FOCUS (HIGH-VOLUME, LOW-VARIETY; e.g., FRITO-LAY) MASS CUSTOMIZATION (HIGH-VOLUME, HIGH-VARIETY; e.g., DELL COMPUTER) 7. Fixed costs are dependent on flexibility of the facility 7. Fixed costs are high and variable costs low 7. Fixed costs tend to be high and variable costs low Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Focused Processes • Focus brings efficiency • Focus on depth of product line rather than breadth • Focus can be – Customers – Products – Service – Technology Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Selection of Equipment • Decisions can be complex as alternate methods may be available • Important factors may be – Cost – Cash flow – Market stability – Quality – Capacity – Flexibility Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Flexibility • Flexibility is the ability to respond with little penalty in time, cost, or customer value • May be a competitive advantage • May be difficult and expensive • Without it, change may mean starting over Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Process Analysis and Design (1 of 3) • Is the process designed to achieve a competitive advantage? • Does the process eliminate steps that do not add value? • Does the process maximize customer value? • Will the process win orders? Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Special Considerations for Service Process Strategies • Some interaction with customer is necessary, but this often affects performance adversely • The better these interactions are accommodated in the process design, the more efficient and effective the process • Find the right combination of cost and customer interaction Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Service Process Matrix (1 of 3) Figure 7.8 Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Service Process Matrix (2 of 3) Mass Service and Professional Service • Labor involvement is high • Focus on human resources • Selection and training highly important • Personalized services Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Service Process Matrix (3 of 3) Service Factory and Service Shop • Automation of standardized services • Restricted offerings • Low labor intensity responds well to process technology and scheduling • Tight control required to maintain standards Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Improving Service Productivity (1 of 2) Table 7.3 Techniques for Improving Service Productivity STRATEGY Separation TECHNIQUE Structuring service so customers must go where the service is offered EXAMPLE Bank customers go to a manager to open a new account, to loan officers for loans, and to tellers for deposits Self-service Self-service so customers Supermarkets and examine, compare, and department stores evaluate at their own Internet ordering pace Focus Restricting the offerings Limited-menu restaurant Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Improving Service Productivity (2 of 2) Table 7.3 Techniques for Improving Service Productivity STRATEGY Modules TECHNIQUE Modular selection of service Modular production EXAMPLE Investment and insurance selection Prepackaged food modules in restaurants Automation Separating services that may lend themselves to some type of automation Automatic teller machines Ordering via an app Scheduling Precise personnel scheduling Scheduling airline ticketcounter personnel at 15minute intervals Training Clarifying the service options Explaining how to avoid problems Investment counselor, funeral directors After-sale maintenance personnel Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Production Technology 1. Machine technology 2. Automatic identification systems (AISs) 3. Process control 4. Vision systems 5. Robots 6. Automated storage and retrieval systems (ASRSs) 7. Automated guided vehicles (AGVs) 8. Flexible manufacturing systems (FMSs) 9. Computer-integrated manufacturing (CIM) Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Machine Technology • Increased precision, productivity, and flexibility • Reduced environmental impact • Additive manufacturing produces products by adding material, not removing it • Supports innovative product design, minimal custom tooling required, minimal assembly time, low inventory, and reduced time to market Comp uter n contro umerical l (C N C ) Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Automatic Identification Systems (AISs) and RFID • Improved data acquisition • Reduced data entry errors • Increased speed • Increased scope of process automation Bar codes and RFID Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Process Control • Real-time monitoring and control of processes – Sensors collect data – Devices read data on periodic basis – Measurements translated into digital signals, then sent to a computer – Computer programs analyze the data – Resulting output may take numerous forms Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Vision Systems • Aid to inspection • Consistently accurate • Never bored • Modest cost • Superior to individuals performing the same tasks Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Robots • Perform monotonous or dangerous tasks • Perform tasks requiring significant strength or endurance • Generally enhanced consistency and accuracy Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Automated Storage and Retrieval Systems (ASRSs) • Automated placement and withdrawal of parts and products • Reduced errors and labor • Particularly useful in inventory and test areas of manufacturing firms Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Automated Guided Vehicle (AGVs) • Electronically guided and controlled carts • Used for movement of products and/or individuals Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Flexible Manufacturing Systems (FMSs) • Computer controls both the workstation and the material handling equipment • Enhanced flexibility and reduced waste • Can economically produce low volume but high variety • Reduced changeover time and increased utilization • Stringent communication requirement between components Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Computer-Integrated Manufacturing (CIM) (1 of 2) • Extend flexible manufacturing – Backward to engineering and inventory control – Forward into warehousing and shipping – Can also include financial and customer service areas – Reducing the distinction between low-volume/highvariety, and high-volume/low-variety production Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Computer-Integrated Manufacturing (CIM) (2 of 2) Figure 7.9 Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Technology in Services (1 of 3) Table 7.4 Examples of Technology's Impact on Services SERVICE INDUSTRY EXAMPLE Financial Services Debit cards, electronic funds transfer, ATMs, Internet stock trading, online banking via cell phone, Apple pay Education Online newspapers and journals, interactive assignments via WebCT, Blackboard, and smartphones Restaurants and foods Wireless orders from waiters to kitchen, robot butchering, transponders on cars that track sales at drive-throughs Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Technology in Services (2 of 3) Table 7.4 Examples of Technology's Impact on Services SERVICE INDUSTRY Hotels EXAMPLE Electronic check-in/check-out, electronic key/lock systems, mobile Web bookings Wholesale/retail trade Point-of-sale (POS) terminals, e-commerce, electronic communication between store and supplier, bar-coded data, RFID, self-checkout, pay via facial recognition Transportation Automatic toll booths, satellite-directed navigation systems, Wi-Fi in automobiles Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Technology in Services (3 of 3) Table 7.4 Examples of Technology's Impact on Services SERVICE INDUSTRY Health care EXAMPLE Online patient-monitoring systems, online medical information systems, robotic surgery, artificial intelligence for medical diagnoses Airlines Ticketless travel, scheduling, Internet purchases, boarding passes downloaded as two-dimensional bar codes on smart phones Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved Copyright This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials. Copyright © 2020, 2017, 2014 Pearson Education, Inc. All Rights Reserved