Operations Management (CH 6) PDF

6 Process design KEY QUESTIONS INTRODUCTION In Chapter 1 we described how all operations consist of a collection What is process design?...

6 Process design KEY QUESTIONS INTRODUCTION In Chapter 1 we described how all operations consist of a collection What is process design? of processes (though these processes may be called ‘units’ or What should be the objectives of ‘departments’) that interconnect with each other to form an process design? internal network. Each process acts as a smaller version of the whole operation of which they form a part, and transformed How do volume and variety affect resources flow between them. We also defined a process as ‘an process design? arrangement of resources and activities that transform inputs into outputs that satisfy (internal or external) customer needs’. They are How are processes designed in the ‘building blocks’ of all operations, and as such they play a vital detail? role in how well operations operate. This is why process design is so important. Unless its individual processes are well designed, an operation as a whole will not perform as well as it could. And operations managers are at the forefront of how processes are designed. In fact, all operations managers are designers. When they purchase or rearrange the position of a piece of equipment, or when they change the way of working within a process, it is a design decision because it affects the physical shape and nature of their process, as well as its performance. This chapter examines the design of processes. Figure 6.1 shows where this topic fits within the overall model of operations management. Topic covered in Direct this chapter Operations Develop Design Design management Process Layout design and flow Deliver Process People in technology operations Figure 6.1 This chapter examines process design 176 M06 Operations Management 53961.indd 176 15/03/2019 17:57  What is process design? To ‘design’ is to conceive the looks, arrangement and workings of something before it is created. In that sense, it is a conceptual exercise. Yet it is one that must deliver a solution that will work in prac- tice. Design is also an activity that can be approached at different levels of detail. One may envisage the general shape and intention of something before getting down to defining its details. This is certainly true for process design. At the start of the process design activity it is important to under- stand the design objectives, especially when the overall shape and nature of the process is being decided. The most common way of doing this is by positioning it according to its volume and variety characteristics. Eventually the details of the process must be analysed to ensure that it fulfils its objec- tives effectively. Yet, it is often only through getting to grips with the detail of a design that the feasibility of its overall shape can be assessed. But don’t think of this as a simple sequential process. There may be aspects concerned with the objectives, or the broad positioning, of the process that will need to be modified following its more detailed analysis. Process design and product/service design are interrelated Often we will treat the design of services and products, on the one hand, and the design of the processes that make them, on the other, as though they were separate activities. Yet they are clearly interrelated. It would be foolish to commit to the detailed design of any product or service without some consider- ation of how it is to be produced. Small changes in the design of products and services can have pro- found implications for the way the operation eventually has to produce them. Similarly, the design of a process can constrain the freedom of product and service designers to operate as they would wish (see Figure 6.2). This holds good whether the operation is producing products or services. However, the overlap between the two design activities is generally greater in operations that produce services. Because many services involve the customer in being part of the transformation process, the service, as far as the customer sees it, cannot be separated from the process to which the customer is subjected. Overlapping product and process design has implications for the organization of the design activity, as we discussed in Chapter 4. Certainly, when product designers also have to make or use the things that they design, it can concentrate their minds on Operations principle what is important. For example, in the early days of flight, the engi- The design of processes cannot be done neers who designed the aircraft were also the test pilots who took independently of the services and/or them out on their first flight. For this reason, if no other, safety was a products that are being created. significant objective in the design activity. Designing the Designing the product or process service Products and Product/ Processes should be services should be service designed so they can designed in such a design has create all products and way that they can an impact services which the be created on process operation is likely to effectively design and introduce vice versa Figure 6.2The design of products/services and the design of processes are interrelated and should be treated together CHAPTER 6 PROCESS DESIGN 177 M06 Operations Management 53961.indd 177 15/03/2019 17:57  OPERATIONS IN PRACTICE Changi airport Airports are complex operations – really complex. Their processes handle passengers, aircraft, crew, baggage, commercial cargo, food, security, restaurants and numerous customer services. The operations managers, who oversee the daily operations of an airport, must cope with Aviation Administration rules and regulations, a huge number of airport service contracts, usually thousands of staff with a wide variety of specialisms, airlines with sometimes compet- ing claims to service priority, and customers, some of whom fly every week and others who are a family of seven with two baby strollers who fly once a decade. Also, their processes are vulnerable to disruptions from late arrivals, aircraft malfunction, weather, the industrial action of work- ers two continents away, conflicts, terrorism and exploding volcanoes in Iceland. Designing the processes that can oper- ate under these conditions must be one of the most including face recognition technology, are used at immigra- challenging operations tasks. So, to win prizes for ‘Best tion counters and departure-gates. Biometric technology Airport’ customer service and operating efficiency year after and ‘fast and seamless travel’ (FAST) services help to speed year has to be something of an achievement. Which is what passenger throughput and increase efficiency. After security the sixth busiest international airport, Changi airport in checks, passengers find themselves in 15,000 m2 of shop- Singapore, has done. As a major air hub in Asia, Changi ping, dining and other retail spaces, featuring local, cultural serves more than 100 international airlines flying to some and heritage-theme restaurants. This space also features a 300 cities in about 70 countries and territories worldwide. It 300-metre-long Central Galleria, which is a glazed open handles almost 60 million passengers (that’s roughly space that visually connects the departure, check-in, arrival 10 times the size of Singapore’s population). A flight takes and transit areas across the terminal. The emphasis on the off or lands at Changi roughly once every 90 seconds. aesthetic appeal of the terminal is something that Changi When Changi opened its new Terminal 4, it increased the considered important. It already boasts a butterfly garden, airport’s annual passenger handling capacity to around orchid and sunflower gardens as well as a koi pond. 82 million. Every stage of the customers’ journey through The feelings of passengers using the terminal were the terminal was designed to be as smooth as possible. The an important part of its design. Architecturally, the aim of all the processes within and around the terminal was design of T4 aimed to be functional, and yet have its to provide fast, smooth and seamless flow for passengers. own distinct character, while ensuring that the design Each stage in the customer journey was provided with and layout are passenger-centric and user-friendly. And enough capacity to cope with anticipated demand. A new with so many different companies involved in the overhead bridge was built across the airport boulevard day-to-day operation of the airport it was vital to connecting T4 with Singapore’s highway system to enable include as many stakeholders as possible during the the movement of cars, buses and airside vehicles. Two new design. Workshops were conducted with various stake- car parks accommodate up to 1,500 vehicles. The terminal holders, including airlines, ground handlers, immigration was connected to the new car parks via sheltered links. Once and security agencies, retail and food and beverage passengers arrive at the two-storey terminal building they operators as well as other users to ensure that the T4 pass through kiosks and automated options for self-check-in, design met the needs of each party. The objective was self-bag tagging and self-bag-drops. Their bags are trans- to ensure that T4 could deliver a seamless and refreshing ported to the aircraft via an advanced and automated experience for travellers, and also be a place where staff baggage handling system. Similarly, automated options, would feel proud and motivated to work. Process networks In Chapter 1 we used the ‘hierarchy of networks’ to illustrate how any operation is both made up of networks (of processes) and a part of networks (of other operations). This idea is of more than 178 PART TWO DESIGNING THE OPERATION M06 Operations Management 53961.indd 178 15/03/2019 17:57  External suppliers External customers An internal Individual processes in the The operation ‘process chain’ internal ‘process network’ Figure 6.3 A process network within an operation showing an internal ‘process chain’ academic interest. It is essential in making all networks, including process networks, work effec- tively. Figure 6.3 shows a simplified internal process network for one business. It has many processes that transform items and transfer them to other internal processes. Through this network there are many ‘process chains’: that is, threads of processes within the network. And thinking about processes as part of a network has a number of advantages. First, understanding how and where a process fits into the internal network helps to establish appropriate objectives for the process. Second, one can check to make sure that everyone in a process has a clear ‘line of sight’ forward through to end customers, so that the people working in each process have a better chance of seeing how they contribute to satisfying the operation’s customers. Even more important, one can ask the question, ‘how can each process help the intermediate processes that lie between them and the customer, to operate effectively?’ Third, a clear ‘line of sight’ backwards through to the operation’s suppliers makes the role and importance of suppliers easier to understand. Finally, reversing the question, not understanding how process chains interact can reduce the effectiveness of the whole operation, and increase the risk of disruption spreading. Process chains can become channels for disruption when things go wrong. What should be the objectives of process design? The whole point of process design is to make sure that the performance of the process is appropriate for whatever it is trying to achieve. For example, if an operation competes primarily on its ability to respond quickly to customer requests, its processes will need to be designed to give fast throughput times. This would minimize the time between customers requesting a product or service and them receiving it. Similarly, if an operation competes on low price, cost-related objectives are likely to dominate its process design. In other words, some kind of logic should link what the operation as a whole is attempting to achieve, and the performance objectives of its individual processes. As when we examined product and service design innovation in Chapter 4, we will include ‘sustainability’ as an operational objec- Operations principle tive of process design, even though it is really a far broader soci- The design of any process should be judged etal issue that is part of the organization’s ‘triple bottom line’ (see on its quality, speed, dependability, flexibility, Chapter 2). This is illustrated in Table 6.1. cost and sustainability performance. CHAPTER 6 PROCESS DESIGN 179 M06 Operations Management 53961.indd 179 15/03/2019 17:57  Table 6.1 The impact of strategic performance objectives on process design objectives and performance Operations performance Typical process design objectives Some benefits of good process objective design Quality ▶ Provide appropriate resources, ▶ Products and services produced capable of achieving the ‘on-specification’ specification of products or services ▶ Less recycling and wasted ▶ Error-free processing effort within the process Speed ▶ Minimum throughput time ▶ Short customer waiting time ▶ Output rate appropriate for ▶ Low in-process inventory demand Dependability ▶ Provide dependable process ▶ On-time deliveries of products resources and services ▶ Reliable process output timing ▶ Less disruption, confusion and and volume rescheduling within the process Flexibility ▶ Provide resources with an ▶ Ability to process a wide range appropriate range of capabilities of products and services ▶ Change easily between ▶ Low cost/fast product and processing states (what, how, or service change how much is being processed?) ▶ Low cost/fast volume and timing changes ▶ Ability to cope with unexpected events (e.g. supply or a processing failure) Cost ▶ Appropriate capacity to meet ▶ Low processing costs demand ▶ Low resource costs (capital ▶ Eliminate process waste in costs) terms of: ▶ Low delay/inventory costs ▶ excess capacity (working capital costs) ▶ excess process capability ▶ in-process delays ▶ in-process errors ▶ inappropriate process inputs Sustainability ▶ Minimize energy usage ▶ Lower negative environmental ▶ Reduce local impact on and societal impact community ▶ Produce for easy disassembly ‘Micro’ process objectives Operations performance objectives translate directly to process design objectives as shown in Table 6.1. But, because processes are managed at a very operational level, process design also needs to consider a more ‘micro’ and detailed set of objectives. These are largely concerned with flow through the process. When whatever is being ‘processed’ enters a process, it will progress through a series of activities where it is ‘transformed’ in some way. Between these activities it may dwell for some time in inventories, waiting to be transformed by the next activity. This means that the time that a unit spends in the process (its throughput time) will be longer than the sum of all the trans- forming activities that it passes through. Also, the resources that perform the processes activities may not be used all the time because not all items will necessarily require the same activities and the capacity of each resource may not match the demand placed upon it. So, neither the items moving through the process, nor the resources performing the activities may be fully utilized. Because of this the way that items leave the process is unlikely to be exactly the same as the way they arrive at the 180 PART TWO DESIGNING THE OPERATION M06 Operations Management 53961.indd 180 15/03/2019 17:57  process. It is common for more ‘micro’ performance flow objectives to be used that describe process flow performance. For example: ▶ Throughput rate (or flow rate) is the rate at which items emerge from the process, i.e. the number of items passing through the process per unit of time. ▶ Cycle time is the reciprocal of throughput rate: it is the time between items emerging from the process. The term ‘takt time’ is the same, but is normally applied to ‘paced’ processes like moving belt assembly lines. It is the ‘beat’ or tempo of working required to meet demand.1 ▶ Throughput time is the average elapsed time taken for inputs to move through the process and become outputs. ▶ ‘Work-in-progress’ or process inventory is the number of items Operations principle in the process, as an average over a period of time. Process flow objectives should include ▶ The utilization of process resources is the proportion of availa- throughput rate, throughput time, work- ble time that the resources within the process are performing in-progress and resource utilization, all of useful work. which are interrelated. OPERATIONS IN PRACTICE Fast (but not too fast) food drive-throughs There is some dispute about who established the first drive- through (or drive-thru, if you prefer). Some claim it was the In-N-Out in California. Other claimants include the Pig Stand restaurant in Los Angeles, where Royce Hailey first promoted the drive-through service, allowing customers to simply drive by the back door of the restaurant where the chef would come out and deliver the restaurant’s famous ‘Barbequed Pig’ sandwiches, and Red’s Giant Hamburg in Springfield, Missouri. What became apparent though, as the drive-through idea began to spread (and include services other than fast food such as banks), was that their design could have a huge impact on their efficiency and profitabil- ity. Today, drive-through processes are slicker, and far, far, faster, although most stick to a proven formula with orders generally placed by the customer using a microphone and country. The orders were then sent back to the restaurants picked up at a window. It is a system that allows drive- and the food was assembled only a few metres from where throughs to provide fast and dependable service. In fact, the order was placed. Although saving only a few seconds there is strong competition between drive-throughs to on each order, it could add up to extra sales at busy times of design the fastest and most reliable process. For example, the day. A good drive-through process should also help some Starbucks drive-throughs have strategically placed customers to contribute to speeding things up. So, for exam- cameras at the order boards so that servers can recognize ple, menu items must be easy to read and understand. regular customers and start making their order – even before This is why what are often called ‘combo meals’ (burger, it’s placed. Other drive-throughs have experimented with fries and a cola) can save time at the ordering stage. By simpler menu boards and see-through food bags to ensure contrast, complex individual items or meals that require greater accuracy. There is no point in being fast if you don’t customization can slow down the process. This can become deliver what the customer ordered. These details matter. It an issue for drive-through operators when fashion moves has been estimated that sales increase 1 per cent for every towards customized salads and sandwiches. Yet there are six seconds saved at a drive-through. One experiment in signs that above a certain speed of service, other aspects of making drive-through process times slicker was carried out process performance become more important. As one drive- by a group of McDonald’s restaurants. On California’s through chief operations manager points out, ‘you can get central coast 150 miles from Los Angeles, a call centre took really fast but ruin the overall experience, because now orders remotely from 40 McDonald’s outlets around the you’re not friendly’. CHAPTER 6 PROCESS DESIGN 181 M06 Operations Management 53961.indd 181 15/03/2019 17:57  Standardization of processes One of the most important process design objectives, especially in large organizations, concerns the extent to which process designs should be standardized. By standardization in this context we mean ‘doing things in the same way’, or more formally, ‘adopting a common sequence of activities, methods and use of equipment’. It is a significant issue in large organizations because, very often, different ways of carrying out similar or identical tasks emerge over time in the various parts of the organization. But, why not allow many different ways of doing the same thing? That would give a degree of autonomy and freedom for individuals and teams to exercise their discre- tion. The problem is that allowing numerous ways of doing things causes confusion, misunderstandings and, eventually, inefficiency. In healthcare processes, it can even cause preventable deaths. For example, the Royal College of Physicians in the UK revealed that there were more than 100 types of charts that were used for monitoring patients’ vital signs in use in UK hospitals.2 This leads to confusion, they said. Potentially, thousands of hospital deaths could be prevented if doctors and nurses used a standardized bed chart. Because hospitals can use different charts, doctors and nurses have to learn how to read new ones when they move. They recommended that there should be just one chart and one process for all staff who check on patients’ conditions. Professor Derek Bell said: ‘Developing and adopting a standardized early warning system will be one of the most significant developments in healthcare in the next decade.’ Operations principle Standardization is also an important objective in the design of Standardizing processes can give some some services and products, for similar reasons (see Chapter 4). significant advantages, but not every process The practical dillema for most organizations is how to draw the can be standardized. line between processes that are required to be standardized, and those that are allowed to be different. Environmentally sensitive process design With the issues of environmental protection becoming more important, process designers have to take account of ‘green’ (sustainability) issues. In many developed countries, legislation has already provided some basic standards. Interest has focused on some fundamental issues: ▶ The sources of inputs to a product or service. (Will they damage rainforests? Will they use up scarce minerals? Will they exploit the poor or use child labour?) ▶ Quantities and sources of energy consumed in the process. (Do plastic beverage bottles use more energy than glass ones? Should waste heat be recovered and used in fish farming?) ▶ The amounts and type of waste material that are created in the manufacturing processes. (Can this waste be recycled efficiently, or must it be burnt or buried in landfill sites?) ▶ The life of the product itself. If a product has a long useful life, will it consume fewer resources than a short-life product? ▶ The end-of-life of the product. (Will the redundant product be difficult to dispose of in an envi- ronmentally friendly way?) Designers are faced with complex trade-offs between these factors, although it is not always easy to obtain all the information that is needed to make the ‘best’ choices. To help make more rational decisions in the design activity, some industries are experimenting with life cycle analysis. This technique analyses all the production inputs, the life cycle use of the product and its final disposal, in terms of total energy used and all emitted wastes. The inputs and wastes are evaluated at every stage of a service Operations principle or product’s creation, beginning with the extraction or farming The design of any process should include of the basic raw materials. The short case ‘Ecover’s ethical oper- consideration of ethical and environmental ation design’ demonstrates that it is possible to include issues. ecological considerations in all aspects of product and process design. 182 PART TWO DESIGNING THE OPERATION M06 Operations Management 53961.indd 182 15/03/2019 17:57  OPERATIONS IN PRACTICE Ecover’s ethical operation design3 Ecover cleaning products, such as washing liquid, are famously ecological. In fact, it is the company’s whole rationale. ‘We clean with care’, says Ecover, ‘whether you’re washing your sheets, your floors, your hands or your dishes, our products don’t contain those man-made chemicals that can irritate your skin’. But it isn’t just the company’s products that are based on an ecologically sustainable foundation. Ecover’s ecological factories in France and Belgium also embody the company’s commitment to sustainability. Whether it is the factory roof, the use of energy or the way it treats the water used in the production processes, Ecover points out that it does its best to limit environmental impact. For example, the ongoing process of improvement; in fact, we’ve recently devel- Ecover factory operates entirely on green electricity – the type oped a new kind of green plastic we like to call “Plant-astic” produced by wind generators, tidal generators and other that’s 100% renewable, reusable and recyclable – and made natural sources. What is more, it makes the most of the from sugarcane.’ energy it does use by choosing energy efficient lighting, and Even the building is ecological. It is cleverly designed to then only using it when needed. And, although the machin- follow the movement of the sun from east to west, so that ery it uses in the factories is standard for the industry, it keeps production takes place with the maximum amount of its energy and water consumption down by choosing natural daylight (good for saving power and good for low-speed appliances that can multi-task and don’t require working conditions). The factory’s frame is built from pine water to clean them. For example, the motors on its mixing rather than more precious timbers and the walls are machines can mix 25 tonnes of Ecover liquid while ‘consum- constructed using bricks that are made from clay, wood ing no more electricity than a few flat irons’. And it has a pulp and mineral waste. They require less energy to bake, ‘squeezy gadget that’s so efficient at getting every last drop yet they’re light, porous and insulate well. The factories’ of product out of the pipes, they don’t need to be rinsed roofs are covered in thick, spongy Sedum (a flowering through’. Ecover say that they ‘hate waste, so we’re big on plant, often used for natural roofing) that gives insulation recycling. We keep the amount of packaging used in our prod- all year round. In fact, it’s so effective, that they don’t need ucts to a minimum, and make sure whatever cardboard or heating or air conditioning – the temperature never drops plastic we do use can be recycled, re-used or re-filled. It’s an below 4°C and never rises above 26°C. How do volume and variety affect process design? In Chapter 1 we saw how processes range from those producing at high volume (for example, credit card transaction processing) to a low volume (for example, funding a large complex take-over deal). Also, processes can range from producing a very low variety of products or services (for example, in an electricity utility) to a very high variety (for example, in an architects’ practice). Usually the two dimensions of volume and variety go together – but in a reversed way. So, low-volume processes often produce a high variety of products and services, and high-volume processes often produce a narrow variety of products and services. Thus, there is a continuum from low volume–high variety through to high volume–low variety, on which we can position processes. And within a single oper- ation there could be processes with very different positions on this volume–variety spectrum. So, for example, compare the approach taken in a medical service during mass medical treatments, such as large-scale immunization programmes, with that taken in trans- plant surgery where the treatment is designed specifically to meet the needs of one person. In other words, no one type of process Operations principle design is best for all types of requirement in all circumstances – The design of any process should be different products or services with different volume–variety posi- governed by the volume and variety it is required to produce. tions require different processes. CHAPTER 6 PROCESS DESIGN 183 M06 Operations Management 53961.indd 183 15/03/2019 17:57  High Variety Low High Variety Low Low Volume High Low Volume High Diverse/ Intermittent complex Project processes Professional Jobbing services processes Batch Services Process Process shops processes tasks flow Mass Mass processes services Continuous processes Repeated/ Continuous divided Manufacturing process types Service process types Figure 6.4 Different process types imply different volume–variety characteristics for the process Process types The position of a process on the volume–variety continuum shapes its overall design and the gen- eral approach to managing its activities. These ‘general approaches’ to designing and managing processes are called process types. Different terms are used to identify process types depending on whether they are predominantly manufacturing or service processes, and there is some variation in the terms used. For example, it is not uncommon to find the ‘manufacturing’ terms used in service industries. Figure 6.4 illustrates how these ‘process types’ are used to describe different positions on the volume–variety spectrum. Project processes Project processes deal with discrete, usually highly customized products, often with a relatively long time-scale between the completion of each item, where each job has a well-defined start and finish. Project processes have low volume and high variety. Activities involved in the process can be ill-defined and uncertain. Transforming resources may have to be organized especially for each item (because each item is different). The process may be complex, partly because the activities in such processes often involve significant discretion to act according to professional judgement. Examples of project processes include software design, movie production, most construction work and large fabrication operations such as those manufacturing turbo generators. The major construction site shown in the picture is a project process. Each ‘item’ (building) is different and poses different challenges to those running the process (civil engineers). 184 PART TWO DESIGNING THE OPERATION M06 Operations Management 53961.indd 184 15/03/2019 17:57  Jobbing processes Jobbing processes also deal with high variety and low volumes. However, while in project processes each item has resources devoted more or less exclusively to it, in jobbing processes each product has to share the operation’s resources with many others. Resources will process a series of items but, although each one will require similar attention, they may differ in their exact needs. Many jobs will probably be ‘one-offs’ that are never repeated. Again, jobbing processes could be relatively complex, however they usually produce physically smaller products and, although sometimes involving considerable skill, such processes often involve fewer unpredictable circumstances. Examples of jobbing processes include the work of made-to-measure tailors, many precision engi- neers such as specialist toolmakers, furniture restorers, and the printer who produces tickets for the local social event. This craftsperson is using general purpose wood- cutting technology to make a product for an individual customer. The next product made will be different (although maybe similar) for a different customer. Batch processes Batch processes may look like jobbing processes, but do not have the same degree of variety. As the name implies, batch processes produce more than one item at a time. So each part of the process has periods when it is repeating itself, at least while the ‘batch’ is being processed. If the size of the batch is just two or three items, it is little different to jobbing. Conversely, if the batches are large, and especially if the products are familiar to the operation, batch processes can be fairly repetitive. Because of this, the batch type of process can be found over a wide range of volume and variety levels. Examples of batch processes include machine tool manufacturing, the production of some special gourmet frozen foods and the manufacture of most of the component parts which go into mass-pro- duced assemblies such as automobiles. In this kitchen food is being prepared in batches. All batches go through the same sequence (preparation, cooking and storage) but each batch is of a different dish. CHAPTER 6 PROCESS DESIGN 185 M06 Operations Management 53961.indd 185 15/03/2019 17:57  Mass processes Mass processes are those which produce items in high volume and relatively narrow variety (narrow in terms of its fundamentals – an automobile assembly process, might produce thousands of variants, yet essentially the variants do not affect the basic process of production). The activities of mass processes are usually repetitive and largely predictable. Examples of mass processes include frozen food production, automatic packing lines, automobile plants and television factories. The automobile plant is everyone’s idea of a mass process. Each product is almost (but not quite) the same, and made in large quantities. Continuous processes Continuous processes have even higher volume and usually lower variety than mass processes. They also usually operate for longer periods of time. Sometimes they are literally continuous in that their products are inseparable, being produced in an endless flow. They often have relatively inflexible, capital-intensive technologies with highly predictable flow, and although products may be stored during the process, their predominant characteristic is of smooth flow from one part of the process to another. Examples of continuous processes include water processing, petrochemical refineries, electricity utilities, steel making and some paper making. This continuous water treatment plant almost never stops (it only stops for maintenance) and performs only one task (filtering impurities). Often we only notice the process if it goes wrong. Professional services Professional services are high-contact processes where customers spend a considerable time in the service process. They can provide high levels of customization (the process being highly adaptable in order to meet individual customer needs). Professional services tend to be people-based rather than equipment-based, and usually staff are given considerable discretion in servicing customers. Professional services include management consultants, lawyers’ practices, architects, doctors’ surger- ies, auditors, health and safety inspectors and some computer field service operations. Here consultants are preparing to start a consultancy assignment. They are discussing how they might approach the various stages of the assignment, from understanding the real nature of the problem through to the implementation of their recommended solu- tions. This is a process map, although a very high level one. It guides the nature and sequence of the consult- ants’ activities. 186 PART TWO DESIGNING THE OPERATION M06 Operations Management 53961.indd 186 15/03/2019 17:57  Service shops Service shops have levels of volume and variety (and customer contact, customization and staff discretion), between the extremes of professional and mass services (see next paragraph). Service is provided via mixes of front- and back-office activities. Service shops include banks, high street shops, holiday tour operators, car rental companies, schools, most restaurants, hotels and travel agents. The health club shown in the picture has front-office staff who can give advice on exercise programmes and other treatments. Although every client has a unique fitness programme, certain activities (for example, safety issues) have to follow defined processes. Mass services Mass services have many customer transactions, involving limited contact time and little customization. Staff are likely to have a relatively defined division of labour and have to follow set procedures. Mass services include supermarkets, a national rail network, an airport, telecommunications service, library, television station, the police service and the enquiry desk at a utility. For example, one of the most common types of mass service are the call centres used by almost all companies that deal directly with consumers. Coping with a very high volume of Operations principle enquiries requires some kind of structuring of the process of commu- Process types indicate the position of nicating with customers. This is often achieved by using a carefully processes on the volume–variety spectrum. designed enquiry process (sometimes known as a script). This is the ‘back office’ of part of a retail bank (the type that we all use). It is a call centre that deals with many thousands of calls every day. Staff are required to follow defined processes (scripts) to make sure customers receive a standard service. The product–process matrix The most common method of illustrating the relationship between a process’s volume–variety position and its design characteristics is shown in Figure 6.5. Often called the ‘product–process’ matrix,5 it can in fact be used for any type of process, whether producing products or services. The underlying idea of the product–process matrix is that many of the more important elements of process design are strongly related to the volume–variety position of the process. So, for any pro- cess, the tasks that it undertakes, the flow of items through the process, the layout of its resources, the technology it uses, and the design of jobs, are all strongly influenced by its volume–variety position. This means that most processes should lie close to the diagonal of the matrix that rep- resents the ‘fit’ between the process and its volume–variety position. This is called the ‘natural’ diagonal, or the ‘line of fit’. CHAPTER 6 PROCESS DESIGN 187 M06 Operations Management 53961.indd 187 15/03/2019 17:57  Critical commentary Although the idea of process types can be useful, it is in many ways simplistic. In reality, there is no clear boundary between process types. For example, many processed foods are manufactured using mass production processes but in batches. So, a ‘batch’ of one type of cake (say) can be followed by a ‘batch’ of a marginally different cake (perhaps with different packaging), followed by yet another, etc. Essentially this is still a mass process, but not quite as pure a version of mass processing as a manufacturing process that only made one type of cake. Similarly, the categories of service processes are likewise blurred. For example, a specialist camera retailer would normally be categorized as a service shop, yet it also will give, sometimes very specialized, technical advice to customers. It is not a professional service like a consultancy, of course, but it does have elements of a professional service process within its design. This is why the volume and variety characteristics of a process are sometimes seen as being a more realistic way of describing processes. The product– process matrix adopts this approach. Moving off the natural diagonal A process lying on the natural diagonal of the matrix shown in Figure 6.5 will normally have lower operating costs than one with the same volume–variety position that lies off the diagonal. This is because the diagonal represents the most appropriate process design for any volume–variety position. Processes that are on the right of the ‘natural’ diagonal would normally be associated with lower volumes and higher variety. This means that they are likely to be more flexible than seems to be warranted by their actual volume–variety position. That is, they are not taking advantage of their ability to standardize their activities. Because of this, their costs are likely to be higher than they would be with a process that was closer to the diagonal. Conversely, processes that are on the left of the diagonal have adopted a position that would normally be used for higher volume and lower variety processes. Processes will therefore be ‘over-standardized’ and probably too inflexible for their OPERATIONS IN PRACTICE Sands Film Studio, jobbing costume makers4 Every film or television programme that is set in any printing, and varied specialist services such as corset and period, other than the present day, needs costumes for its crinoline making as well as millenary (hats). During the actors. And most films have a lot of characters, so that design and making process actors often visit the work- means a lot of costumes. Look at Sands Film Studios in shop, which has been called an ‘Aladdin’s cave’ of London and you will see a well-established and perma- theatrical costumes. ‘This is really where the actors come nent costume-making workshop. You will also see a face to face with their character for the first time, and it’s typical ‘jobbing’ process. Sands Films provides a wide a fascinating process to watch’, Olivier Stockman, the range of wardrobe and costume services. Its customers company’s Managing Director, says. Making a costume are the film, stage and TV production companies, each of can only start once a project has been approved and a which has different requirements and time constraints. costume designer appointed, although discussions with And because each project is different and has different the workshop may have started prior to that. When the requirements, the workshop’s jobs go from making a budget and the timing have been agreed, the designer single simple outfit to providing a wide variety of can start to present ideas and finished designs to the specially designed costumes and facilities over an workshop. And although the processes in the workshop extended production period. The facilities include most are well established, each costume requires different skills normal tailoring processes such as cutting, dyeing and and so has a different route through the stages. 188 PART TWO DESIGNING THE OPERATION M06 Operations Management 53961.indd 188 15/03/2019 17:57  Manufacturing Service Low volume Product/service High volume operations operations High variety characteristics Low variety process types process types Project Professional Flexibility service More process flexibility than is needed, Process performance characteristics Jobbing so high cost Th e ‘n at ur al ’d ia Batch Service shop go na lo r‘ lin e of Less process fit ’ Mass flexibility than is needed, so high cost Cost Continuous Mass service Figure 6.5Deviating from the ‘natural’ diagonal on the product–process matrix has consequences for cost and flexibility Source: Based on Hayes and Wheelwright volume–variety position. This lack of flexibility can also lead to high costs because the process will not be able to change from one activity to another as readily as a more flexible process.6 So, a first step in examining the design of an existing process is to check if it is on the natural diagonal of the product–process matrix. The volume–variety position of the process may have changed without Operations principle any corresponding change in its design. Alternatively, design Moving off the ‘natural diagonal’ of the changes may have been introduced without considering their suit- product–process matrix will incur excess cost. ability for the processes volume–variety position. Example The ‘meter installation’ unit of a water utility company installed and repaired water meters. Each installation job could vary significantly because the requirements of each customer varied and because meters had to be fitted into different water pipe systems. When a customer requested an installation, a supervisor would survey the customer’s water system and inform the installation team. An appointment would then be made for an installer to visit the customer’s location and install the meter. Then the company decided to install a new ‘standard’ remote-reading meter to replace the wide range of existing meters. This new meter was designed to make installation easier by including universal quick-fit joints that reduced pipe cutting and jointing during installation. As a pilot, it was also decided to prioritize those customers with the oldest meters and conduct trials of how the new meter worked in practice. All other aspects of the installation process were left as they were. However, after the new meters were introduced the costs of installation were far higher than forecast and the installers were frustrated at the waste of their time and the now relatively stand- ardized installation job. So the company decided to change its process. It cut out the survey stage CHAPTER 6 PROCESS DESIGN 189 M06 Operations Management 53961.indd 189 15/03/2019 17:57  of the process because, using the new meter, 98 per cent of installations could be fitted in one visit, minimizing disruption to the customer. Just as significantly, fully qualified installers were often not needed, so installation could be performed by less expensive labour. This example is illustrated in Figure 6.6. The initial position of the installation process is at point A. The installation unit was required to install a wide variety of meters into a very wide variety of water systems. This needed a survey stage to assess the nature of the job and the use of skilled labour to cope with the complex tasks. The installation of the new type of meter changed the volume–variety position for the process by reducing the variety of the jobs tackled by the process and increasing the volume it had to cope with. However, the process was not changed so the design of the process was appropriate for its old volume–variety position, but not the new one. In effect, it had moved to point B in Figure 6.6. It was off the diagonal, with unnec- essary flexibility and high operating costs. Redesigning the process to take advantage of the reduced variety and complexity of the job (position C on Figure 6.6) allowed installation to be performed far more efficiently. How are processes designed in detail? After the overall design of a process has been determined, its individual activities must be configured. At its simplest this detailed design of a process involves identifying all the individual activities that are needed to meet the objectives of the process, and deciding on the sequence in which these activ- ities are to be performed and who is going to do them. There will, of course, be some constraints to this. Some activities must be carried out before others and certain people or equipment can only do some activities. Nevertheless, for a process of any reasonable size, the number of alternative pro- cess designs is usually large. Because of this, process design is often done using some simple visual approach such as process mapping. Low volume Product/service High volume High variety characteristics Low variety Original service with New service, Flexibility appropriate process characteristics old process, so excess process A B flexibility and high cost Process perf ormance characteristics New service with new process having appropriate The ‘natural’ diagonal C process or ‘line of fit’ characteristics Cost Figure 6.6 A product–process matrix with process positions from the water meter example 190 PART TWO DESIGNING THE OPERATION M06 Operations Management 53961.indd 190 15/03/2019 17:57  OPERATIONS IN PRACTICE Space4 housing processes7 Productivity in house building is a problem. While most industries have made, sometimes spectacu- lar, productivity gains, house building has actually been getting less productive. To add to the prob- lem, a combination of population growth and rapid urbanization means that in many countries, demand for housing is rising rapidly. But some companies are trying to remedy this by adopting new production methods. Space4 is one of these. It is a division of Persimmon, which is the UK’s largest house builder. Its huge building in Birmingham (UK) contains what some believe could be the future of house building. It is more like the way you would expect an automobile to be made. It has a production line whose 90 oper- ators, many of whom have automobile assembly are stacked in 3-metre piles and are then fork lifted into experience, are capable of producing the timber-framed trucks where they are dispatched to building sites across panels that form the shell of the new homes at a rate of a the UK. Once the panels arrive at the building site, the house every hour. The automated, state-of-the-art elec- construction workforce can assemble the exterior of a tronic systems within the production process control all 1,200 sq ft (average size) new home in a single day. facets of the operation, ensuring that scheduling and oper- Because the external structure of a house can be built in a ations are timely and accurate. There is a direct link few hours, and enclosed in a weatherproof covering, staff between the computer-aided design (CAD) systems that working on the internal fittings of the house, such as design the houses and the manufacturing processes that plumbers and electricians, can have a secure and dry envi- make them, reducing the time between design and manu- ronment in which to work, irrespective of external facture. The machinery itself incorporates automatic conditions. Furthermore, the automated production predictive and preventative maintenance routines that process uses a type of high-precision technology which minimize the chances of unexpected breakdowns. But not means there are fewer mistakes in the construction process everything about the process relies on automation. Because on site. This means that the approval process from the local of their previous automobile assembly experience, staff are regulatory authority takes less time. This process, says used to the just-in-time, high-efficiency culture of modern Space4, speeds up the total building time from 12–14 mass production. After production, the completed panels weeks to 8–10 weeks. Process mapping Process mapping simply involves describing processes in terms of how the activities within the pro- cess relate to each other. There are many techniques which can be used for process mapping (or pro- cess blueprinting, or process analysis, as it is sometimes called). However, all the techniques identify the different types of activity that take place during the process and show the flow of materials or people or information through the process. Process mapping symbols Process mapping symbols are used to classify different types of activity. And although there is no universal set of symbols, used all over the world for any type of process, there are some that are commonly used. Most of these derive either from the early days of ‘scientific’ management around a CHAPTER 6 PROCESS DESIGN 191 M06 Operations Management 53961.indd 191 15/03/2019 17:57  Process mapping symbols derived Process mapping symbols derived from scientific management from system analysis Operation (an activity that Beginning or end of process directly adds value) Inspection (a check of Activity some sort) Transport (a movement of Input or output from the process something) Delay (a wait, e.g. for materials) Direction of flow Storage (deliberate storage, as Decision (exercising discretion) opposed to a delay) Figure 6.7 Some common process mapping symbols century ago (see Chapter 9) or, more recently, from information system flowcharting. Figure 6.7 shows the symbols we shall use here. These symbols can be arranged in order, and in series or in parallel, to describe any process. For example, Figure 6.8 shows one of the processes used in a theatre lighting operation. The company hires out lighting and stage effects equipment to theatrical companies and event organizers. Customers’ calls are routed to the store technician. After discussing their requirements, the technician checks the Supplier Send Call Supplier’s customer customer equipment to guide store N N Customer Y Y Confirm Stored Find wants Search to equip. supplier? search? supplier N Reserve Check Supply Y Customer on Kit wagon to Assemble availability from stock? request availability store kit file file Deliver to Pack for N Needs Check Kit to customer delivery attention? equipment workshop Y Repair Figure 6.8 Process map for ‘enquire to delivery’ process at stage lighting operation 192 PART TWO DESIGNING THE OPERATION M06 Operations Management 53961.indd 192 15/03/2019 17:57  equipment availability file to see if the equipment can be supplied from the company’s own stock on the required dates. If the equipment cannot be supplied in-house, customers may be asked whether they want the company to try and obtain it from other possible suppliers. This offer depends on how busy and how helpful individual technicians are. Sometimes customers decline the offer and a ‘Guide to Customers’ leaflet is sent to the customer. If the customer does want a search, the technician will call potential suppliers in an attempt to find available equipment. If this is not successful the customer is informed, but if suitable equipment is located it is reserved for delivery to the company’s site. If equipment can be supplied from the company’s own stores, it is reserved on the equipment availability file and the day before it is required a ‘kit wagon’ is taken to the store where all the required Operations principle equipment is assembled, taken back to the workshop, checked, and Process mapping is needed to expose the if any equipment is faulty it is repaired at this point. After that it reality of process behaviour. is packed in special cases and delivered to the customer. Different levels of process mapping For a large process, drawing process maps at this level of detail can be complex. This is why processes are often mapped at a more aggregated level, called high-level process mapping, before more detailed maps are drawn. Figure 6.9 illustrates this for the total ‘supply and install lighting’ process in the stage lighting operation. At the highest level the process can be drawn simply as an input–transfor- mation–output process with materials and customers as its input resources and lighting services as outputs. No details of how inputs are transformed into outputs are included. At a slightly lower or more detailed level, what is sometimes called an outline process map (or chart) identifies the sequence of activities but only in a general way. So, the process of ‘enquire to delivery’ that is shown in detail The operation of supplying and installing lighting equipment The outline process of supplying and installing lighting equipment ‘Enquire ‘Install ‘Collect to and and delivery’ test’ check’ File Inform failure customer note N Rectify in Y Rectify time? N To customer Y Routine Y Safety Pass Job Return site Compliant? Install control check check? sign-off to base check N The detailed process of the ‘Install and test’ activity Y Rectify in N Call for Rectify time? help Figure 6.9 The ‘supply and install’ operations process mapped at three levels CHAPTER 6 PROCESS DESIGN 193 M06 Operations Management 53961.indd 193 15/03/2019 17:57  in Figure 6.8 is here reduced to a single activity. At the more detailed level, all the activities are shown in a ‘detailed process map’ (the activities within the process ‘install and test’ are shown). Although not shown in Figure 6.9, an even more micro set of process activities could be mapped within each of the detailed process activities. Such a micro detailed process map could specify every single motion involved in each activity. Some quick service restaurants, for example, do exactly that. In the lighting hire company example, most activities would not be mapped in any more detail than that shown in Figure 6.9. Some activities, such as ‘return to base’, are probably too straightforward to be worth mapping any further. Other activities, such as ‘rectify faulty equipment’, may rely on the technician’s skills and discretion to the extent that the activity has too much variation and is too complex to map in detail. Some activities however may need mapping in more detail to ensure quality or to protect the company’s interests. For example, the activity of safety checking the customer’s site to ensure that it is compliant with safety regulations will need specifying in some detail to ensure that the company can prove it exercised its legal responsibilities. Mapping visibility in process design Processes with a high level of customer ‘visibility’ cannot be designed in the same way as pro- cesses that deal with inanimate materials or information. ‘Processing’ people is different. As we discussed in Chapter 1, operations and processes that primarily ‘transform’ people present a par- ticular set of issues. Material and information are processed, but customers experience the pro- cess. In processes where customers see, at least, part of the process, it is sometimes useful to map them in a way that makes the degree of visibility of each part of the process obvious. This allows those parts of the process with high visibility to be designed so that they enhance the customer’s perception of the process. Figure 6.10 shows yet another part of the lighting equipment company’s operation: ‘the collect and check’ process. The process is mapped to show the visibility of each activity to the customer. Here four levels of visibility are used. There is no hard and fast rule about this; many processes simply distinguish between those activities that the customer could see and those that they couldn’t. The boundary between these two categories is often called the ‘line of Call Check it Very high Worked Agree customer worked visibility OK? N report to agree OK terms Y Line of interaction Take out High equipment visibility Medium To site To base visibility Line of visibility Back office Prepare Amend – low report usage visibility records N Check Did it Equipment and clean work OK? to store equipment Y Figure 6.10 The ‘collect and check’ process mapped to show different levels of process visibility 194 PART TWO DESIGNING THE OPERATION M06 Operations Management 53961.indd 194 15/03/2019 17:57  visibility’. In Figure 6.10 three categories of visibility are shown. At the very highest level of vis- ibility, above the ‘line of interaction’, are those activities that involve direct interaction between the lighting company’s staff and the customer. Other activities take place at the customer’s site or in the presence of the customer but involve less or no direct interaction. Yet further activities (the two transport activities in this case) have some degree of visibility because they take place away from the company’s base and are visible to potential customers, but are not visible to the imme- diate customer. Visibility, customer experience and emotional mapping When customers experience a process, it results in the customer feeling emotions, not all of which are necessarily rational. Most of us have been made happy, angry, frustrated, surprised, reassured or furious as customers in a process. Nor is the idea of considering how processes affect customer emotions confined to those processes that are intended to engage the emotions: for example, enter- tainment-type organizations such as theme parks. Any high customer contact product (or more likely, service) always creates an experience for the customer. Moreover, customer experience will affect customer satisfaction, and therefore has the potential to produce customer loyalty, influence expectations and create emotional bonds with customers. This is why many service organizations are seeing how customers experience their processes (the so-called ‘customer journey’) at the core of their process design. Designing processes with a significant experience content requires the systematic consideration of how customers may react to the experiences that the process exposes them to. This will include the sights, sounds, smells, atmosphere and general ‘feeling’ of the se