duction and Operations Management MGT613

VU

Lesson 18

PROCESS SELECTION

Process Selection plays an important part in over all design of production and operations

management systems. Process Selection allows an organization to offer a safe and reliable product

and service through pragmatic design and effective capacity planning. With the help of process

selection we can understand the different types of processing including manual, rigid, and flexible

as well as various automated approaches to processing. Process selection allows an operations

manager to better understand the need for management of technology. Together with capacity

planning it helps an organization to develop different approaches to meet the irregular demand

pattern of the customers.

Introduction and Meaning

Process Selection refers to the way an organization chooses to produce its good or services. It takes into

account selection of technology, capacity planning, layout of facilities, and design of work systems.

Process selection is a natural extension after selection of new products and services.

An organizations process strategy would include

1. Make or Buy Decisions. The extent to which an organization will produce goods or provide in

house as opposed to relying on an outside organization to produce or provide them.

2. Capital Intensity. The mix of equipment and labor will be used by the government.

3. Process Flexibility: The degree to which the system can be adjusted to changes in processing

requirements due to such factors as changes in product or service design, changes in volume

processed, and changes in technology.

Reasons to ( produce in-house or outsource) Make or Buy

There are 6 reasons which are available to us in order to decide whether to develop a competence in

house or hire an outside competent organization to supply that product, service or particular

expertise. The latter requires that the outsourcer to be honest, ethical, competent. It also requires that

outsourcing contract should be flexible yet pragmatic and carry proper levels of services.

Available capacity if an organization has the equipment, necessary skills and time, it often

makes sense to produce an item or perform a service in house. The additional costs would

be relatively small compared with those required to buy items or subcontract them.

Expertise. If a firm lacks the expertise to do a job satisfactorily, buying might be a

reasonable alternative.
Quality considerations. Firms that specialize can usually offer higher quality than an

organization can attain itself. Conversely, special quality requirements or the ability to

closely monitor quality may cause an organization to perform a job itself.

Nature of demand. When demand for an item is high and steady, the organization is often

better off doing the work itself. However, wide fluctuations in demand or small orders are

usually better handled by specialists, who are able to combine orders from multiple sources,

which results in higher volume and tend to offset individual buyer fluctuation.

Cost. Any cost savings achieved from buying or making must be weighed against the

preceding factors. Cost savings might come from the item itself or from transportation cost

savings. If there are fixed costs associated with making an item that cannot be reallocated if

the item is purchased, that has to be recognized in cost analysis.

Risk. Outsourcing or buying the services carries risk; often companies retain flexibility by

carrying out certain critical activities in house and repetitive menial activities through

outsourcing.

78
Production and Operations Management MGT613

VU

Types of Operation

The degree of standardization and the volume of output of a product or service influence the way

production is organized. Output can range from high volume, highly standardized, to low volume,

highly customized.

1. Continuous Processing.

1. Repetitive Processing.

2. Intermittent Processing.

1. Batch Processing

2. Job Shop.

3. Automation

1. Computer Aided Manufacturing

2. Numerically Controlled Machines

3. Robot

4. Manufacturing Cell.

5. Flexible Manufacturing System.

Continuous and Semi Continuous Operations

1. A system that produces highly uniform products or continuous services, often performed by

machines.

1. Processing of chemicals, photographic film, newsprint and oil products

2. Repetitive Processing. A production system that renders one or a few highly standardized

products or services.

1. Automobiles, televisions, computers ,calculators, cameras and video equipments

Intermittent Processing

1. A system that produces lower volumes of items or services with a greater variety of processing

requirements.

1. Processing of chemicals, photographic film, newsprint and oil products

2. Batch Processing. A system used to produce moderate volumes of similar items.

1. Paint, ice cream, canned vegetables

2. Magazines, newspapers, textbooks and user manuals.

3. Job Shop. A system that renders unit or small lot production or service with varying

specifications according to customer needs

Automation.

Machinery that has sensing and controlling devices that enables it to operate automatically.

1. Computer Aided manufacturing the use of computers in process control.

2. Numerically Controlled Machines that perform operations by following mathematical

processing instructions

3. Robot a machine that consists of a mechanical arm, a power supply and a controller.

Flexible Automation

1. Manufacturing Cell. One or a few N/C machines that produce a variety of parts.

2. Flexible Manufacturing System. A group of machines designed to handle intermittent

processing requirements and produce a variety of similar products.

1. Designed to handle Intermittent processes

2. Offers reduce labor costs and consistent quality.

3. Higher Flexibility as compared to hard automation

2. Disadvantage.

1. Requires longer time for planning and development

79