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Process Strategy
Outline
♦ GLOBAL COMPANY PROFILE: DELL
COMPUTER CO.
♦ FOUR PROCESS STRATEGIES
♦ Process Focus
♦ Repetitive Focus
♦ Product Focus
♦ Mass Customization Focus
♦ Comparison of Process Choices
Outline - Continued
♦ PROCESS ANALYSIS AND DESIGN
♦ Flow Diagrams
♦ Time-Function Mapping
♦ Process Charts
♦ Service Blueprinting
♦ SERVICE PROCESS DESIGN
♦ Customer Interaction and Process Design
♦ More Opportunities to Improve Service Processes
♦ SELECTION OF EQUIPMENT AND
TECHNOLOGY
Outline - Continued
♦ PRODUCTION TECHNOLOGY
♦ Machine Technology
♦ Process Control
♦ Vision Systems
♦ Automated Storage and Retrieval System
♦ Automated Guided Vehicle (AGV)
♦ Flexible Manufacturing Systems (FMS)
♦ Computer-Integrated Manufacturing (CIM)
Outline - Continued
♦ TECHNOLOGY IN SERVICES
♦ ENVIRONMENTALLY FRIENDLY PROCESSES
♦ PROCESS REENGINEERING
Learning Objectives
When you complete this chapter, you should be
able to :
Identify or Define:
♦ Process focus
♦ Repetitive focus
♦ Product focus
♦ Process reengineering
♦ Service process issues
♦ Environmental issues
Learning Objectives - Continued
When you complete this chapter, you should be
able to:
Describe or Explain:
♦ Process analysis
♦ Service design
♦ Green manufacturing
♦ Production technology
Dell Computer Company
“How can we make the process of buying a
computer better?”
♦ Sell custom-build PCs directly to consumer
♦ Integrate the Web into every aspect of its business
♦ Operate with six days inventory
♦ Build computers rapidly, at low cost, and only when
ordered
♦ Focus research on software designed to make
installation and configuration of its PCs fast and simple
Fit of Process, Volume, and Variety
Low-Volume Repetitive Process High-Volume
(Intermittent) (Modular) (Continuous)
Continuum
Process-Focused Strategy
Bank
© 1995
Hospital Corel
Corp.
Machine
© 1995 Corel Corp. Shop
© 1995 Corel Corp.
Process Focused Strategy -
Pros & Cons
♦ Advantages
♦ Greater product flexibility
♦ More general purpose equipment
♦ Lower initial capital investment
♦ Disadvantages
♦ High variable costs
♦ More highly trained personnel
♦ More difficult production planning & control
♦ Low equipment utilization (5% to 25%)
Repetitive Focused Strategy
Truck
© 1995 Corel Corp.
Mass
Flu Shots
© 1984-1994 T/Maker Co.
(Discrete)
Paper (Continuous) © 1995 Corel Corp.
Flow Diagram Showing the
Steelmaking Process at NUCOR
A Comparison (1)
Process Focus Repetitive Focus Product focus Mass
(Low volume, High (Modular) (High-volume, Customization
variety) low-variety) (High-volume,
high-variety
1. Small quantity, Long runs, Large quantity, Large quantity,
large variety of standardized small variety of large variety of
products product, from products products
modules
2. General purpose Special Special purpose Rapid
equipment equipment aids in equipment changeover on
use of assembly flexible equipment
line
A Comparison (2)
Process Focus Repetitive Focus Product focus Mass
Customization
3 Broadly skilled Modestly trained Operators less Flexible operators
operators employees broadly skilled trained for
customization
4 Many instructions Reduced training Few work Custom orders
because of change and number of job orders and job require many
in jobs instructions instructions instructions
5 Raw material JIT techniques Raw material Raw material low
high relative to used low relative to relative to product
product value product value value
A Comparison (3)
Process Focus Repetitive Focus Product focus Mass
Customization
6 WIP high relative JIT techniques WIP low relative to WIP driven
to output used output down by JIT,
kanban, lean
production
7 Units move Movement Units move swiftly Goods move
slowly thru plant measured in hours thru facility swiftly thru
& days facility
8 Finished goods Finished goods Finished goods Finished goods
made to order, not made to frequent made to forecast, made to order
stored forecasts then stored
A Comparison (4)
Process Focus Repetitive Focus Product focus Mass
Customization
9 Scheduling Scheduling based Scheduling Scheduling
complex and on building models relatively simple, sophisticated to
concerned with from a variety of concerns accommodate
trade-off between forecasts establishing customization
inventory, sufficient rate of
capacity, and output to meet
customer service forecasts
10 Fixed costs Fixed costs Fixed costs high, Fixed costs high;
low, variable costs dependent on variable costs low variable costs
high flexibility of must be low
facilities
A Comparison (5)
Process Focus Repetitive Focus Product focus Mass
Customization
11 Costing, done Costs usually Because of high High fixed costs
by job, is known based on fixed costs, cost and dynamic
estimated prior to experience dependent on variable costs
doing job but only utilization of
known after doing capacity
job
Process Continuum
Continuum
Mass Customization
$ $ $
osts
s
costs
co
sB
c ss C
p r oc e
sA
$ ces Total
es
ro
al p
oc
Tot
pr
tal
To
400,000
300,000 Fixed cost –
Fixed cost – Process C
200,000 Fixed cost – Process B
V1(2,857) V2 (6,666)
Process A
Volume
Tools for Process Design
♦ Flow Diagrams
♦ Process Charts
♦ Time-Function/Process Mapping
♦ Work Flow Analysis
Production Process Flow Diagram
Customer
Purchasing Customer sales
(order inks, paper, representative
other supplies) take order
Process
Sales Order
Order
Production Wait
control
Order
Product
Plant A Print
WIP
Product
Warehouse Wait Wait Wait
WIP
Product
Plant B WIP
Extrude
WIP
52 days
Time Function Map
(Target)
Customer Order Receive
Product product
Process
Sales Order
Order
Production Wait
control Order
Product
Print WIP Extrude
Plant
Warehouse Wait
Product
Transport Move
High
General purpose
Degree of Labor Intensity
Retailing Boutiques
Low
Warehouse and Fast food Fine dining
Hospitals
catalog stores restaurants restaurants
Airlines
No frills
airlines
♦ Layout
♦ Human Resources
♦ Technology
Production Process &
Technology Alternatives
# Different Products or Parts
High General Purpose, NC,
CNC
CIM
Flexible
Manufacturing
System
Dedicated
Automation
Low
Low High
Volume of Products or Parts
Areas of Technology
♦ Machine technology
♦ Automatic identification systems (AIS)
♦ Process control
♦ Vision system
♦ Robot
♦ Automated storage and retrieval systems (ASRS)
♦ Flexible manufacturing systems (FMS)
♦ Computer-integrated manufacturing (CIM)
Machine Technology
♦ Increased precision
♦ Increased productivity
♦ Increased flexibility
♦ Decreased pollution
♦ Decreased size
♦ Decreased power requirements
Process Control