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Chapter 4

Chapter 4. Processes: Turning Resources into Capabilities. Learning Objectives. Describe the functions and importance of concurrent engineering for product and service design.

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Chapter 4

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  1. Chapter 4 Processes: Turning Resources into Capabilities

  2. Learning Objectives • Describe the functions and importance of concurrent engineering for product and service design. • Describe the service system design matrix and understand the relationships between sales opportunities, customer contact, and process efficiency. • Describe the strengths and weaknesses of process-oriented, product-oriented, and cellular layouts • Describe the quality function deployment processes. • Describe the component matrices in the house of quality. • Use the house of quality to structure quality function deployment. • Differentiate between lean production, value stream mapping, Six Sigma, business process analysis, reengineering, and poka-yoke. • Construct a process flow chart. • Construct a service blueprint.

  3. Process Definition • A process is a collection of tasks and activities that together, and only together, transform inputs to outputs. Processes are organizing structures for resources, which provide the bridge between resources and capabilities.

  4. Process Decisions and Process Choice • Process decisions range from strategic to tactical • Many require long-term investments • All affect the firm’s ability to compete

  5. General Layout Alternatives • Product-oriented layout • Process-oriented layout • Cellular layout

  6. General Layout Decisions • The product-oriented layout • Provides resources in a fixed sequence • Matches the sequence of steps required to produce a product or service • Common in high-volume manufacturing

  7. Product Oriented Layout • Disadvantages • Lack of flexibility or customization • Employee boredom/ dissatisfaction • Quality problems • Advantages • Efficient production of standardized goods and services • High processing speed • Low cost per unit

  8. Process Oriented Layout • Process-oriented Layout • Organized by function • Processing steps can be completed in any sequence • Products or customers can take any “route” necessary.

  9. Process Oriented Layout DisadvantagesHigher cost per unitHigher skilled, high cost employeesTransport/wait time between departments Less consistency • Advantages • Flexibility • and customization

  10. Cellular Layouts • Cellular layouts • A compromise of product and process layouts • Create “families” of products with similar process requirements • A “cell” contains all resources needed for family

  11. Cellular Layouts • Advantages • Flexibility greater than a product-oriented layout • Less costly than a process-oriented layout • Less material transport/wait • Fewer changeovers Disadvantages Duplication of resources

  12. Choices for Manufacturers: The Product/Process Matrix Process Types • Project – Unique, one-of-a-kind, products or customers. Generally large in size (building a bridge, installing a software system, implementing a major improvement effort) • Job Shop – Predominantly manufacturing, high customization and flexibility, but higher volume than project. • Batch Production – Groups of identical products or customers processed together through one step and then moved together to the next step. More limited product variety, higher production volume.

  13. Choices for Manufacturers:The Product/Process Matrix Process Types (continued) • Assembly Line – Narrowly defined processes, made up of equipment with limited flexibility. Much higher volume. Still the possibility of some flexibility. • Continuous Flow (Repetitive)– Equipment and workstations dedicated to a single thing. Very high volume. Very low flexibility. Best chance for automation.

  14. Process flow selection and theProduct Process Matrix Tend to be process-oriented Can be either Tend to be product-oriented

  15. Other Process Choices: Demand Linkage • Manufacturers match output to demand in different ways • Make-to-order (MTO) • Process activated in response to an actual order • May be either standard or custom product • WIP and finished goods inventory kept to a minimum • Tends to have longer response time • Make-to-stock (MTS) • Process activated to meet expected or forecast demand • Customer orders are served from target stocking level • Shorter lead time for stocked items • MUCH longer for out of stock items • Risk of obsolescence, shrink, etc.

  16. Other Process Choices: Demand Linkage • Assemble-to-order (ATO) • Partially manufactured and held in unfinished state • Customer order dictates final configuration • Quicker response than MTO; More flexible than MTS

  17. Choices for Service Providers:The Service System Design Matrix • Customer contact & sales opportunity versus efficiency. Exhibit 4.7 Service System Design Matrix

  18. Process design is as important as product design Products and/or services must meet customer needs Processes must meet product and/or service needs Linking Customer Needs to Product/Process Attributes - Quality Function Deployment (QFD)

  19. Phase 1: Product Planning Translating customer wants and needs into technical design parameters that can guide development of products and services. Quality Function Deployment: Phase 1 Example

  20. The “House of Quality” Supports QFD by providing a structured framework for linking customer to product and process The relationships between the WHATs and the HOWs The relationships among the HOWs HOW it can be achieved, in measurable technicalterms WHAT customers want Performance Goals for the HOWS

  21. The “House of Quality” links to competitors Relative importance of the WHATs Performance on WHAT’s relative to competitors • Relative importance of • performance goal to • delivery of customer • wants Performance goals achieved by competitors

  22. Phase 1 House of Quality Relationships amongHOWS HOWS WHATS Relationshipsbetween WHATsand HOWS Goals for HOWS

  23. Phase 1 House of Quality (continued) Quick delivery is most important to customers AND…It can affect howhot a pizza is when it arrives It is measured inminutes It is also something Mary is very good at. The goal is < 20 minutes

  24. The House of Quality • The “House” is used repetitively to drive customer requirements closer to the product and process design. • “Hows” from prior phase become “Whats” of current phase Phase 1 Product Planning Phase 2 Part Deployment Phase 3 Process Planning Phase 4 Production Planning

  25. Phase 2 House of Quality (continued) • Phase 2: Part Deployment • Technical design parameters provide information to guide the development of the components of the product or service.

  26. Phase 3 House of Quality • Phase 3: Process Planning • Based on component characteristics, processes are designed. • Specifying process requirements • Specific decisions on resource allocation and configuration • Prioritizing process requirements • Analyzing competitive offerings

  27. The House of Quality Phase 1 Product Planning Phase 2 Part Deployment Phase 3 Process Planning Phase 4 Production Planning • Phase 4: Production Planning • Process requirements are used to design a system that will control the process and make sure it continues to meet expectations. • The result is a discernable and measurable link between • The “wants” of the customer and the design of the product or service

  28. New Product and New Service Development • Design for manufacture and assembly (DFMA) • Product and process engineers consult to ensure that the product can be produced easily and at low cost • Design for logistics (DFL) • Product design considers costs associated with transportation • Design for environment (DFE) • Product design includes environmental concerns such as the manufacturing process, packaging issues, disposal, refurbishing, and recycling • Concurrent engineering • The ultimate in integrating process design and new product or service design

  29. A Closer Look at Concurrent Engineering • Performing product and service development engineering functions in tandem to reduce time and improve communication.

  30. Process Improvement Tools • Process Maps • A visual model of a process

  31. Process Improvement Tools (continued) • Value Stream Mapping • A common “lean systems” tool • Examines entire value stream for waste

  32. Process Improvement Tools (continued) • Service Blueprints

  33. Other Process Improvement Tools • Business Process Analysis • Focus on processes that cross functional boundaries and transitions between departments • Identified nonvalue-adding activities

  34. Other Process Improvement Tools • Reengineering • Clean slate • Focus on behind-the-scenes activities • High use of technology • High rate of use in the service sector

  35. Reengineering steps • Process selection • Identify potential areas for improvement based on need and likelihood of success • Description of current process • Using process flow diagram techniques, describe, precisely, the current process • Process improvement • Identify new ways to accomplish the process goals • Technology is often used as a catalyst for improvement • “Technology-enabled reengineering” • Process verification • Identify problems with the proposed changes and ensure that they can be eliminated • Implementing and monitoring • Make the changes and monitor the results for effectiveness

  36. Other Process Improvement Tools • Poka-Yoke • Mistake-proofing products and services • Preventing errors, reducing costs and improving quality • Design to prevent doing it any but the correct way • McDonald’s wrapping of burger • Car won’t start unless transmission is in “Park” • “Deadman switch” on lawn mower

  37. Broad Improvement Frameworks • Lean Systems • Organization-wide waste elimination • Evolved from JIT • Covered extensively in Chapter 13 • Six Sigma • Structured quality improvement process • Training intensive • Elimination of variability is focus • Covered Extensively in Chapter 6

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