Process

1. Process • A collection of tasks, connected by flows of goods and information, that transforms various inputs into more valuable outputs Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-8

2. Process Flow Diagram • Tasks are rectangles • Flows are arrows • Inventory is inverted triangle • Decision point is diamond © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-8

3. Process Flow Diagram • May show non-value added steps • Process improvement • Capacity calculations © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-8

4. Production Process Flow Diagram Customer Purchasing (order inks, paper, other supplies) Customer sales representative take order Vendors Prepress Department (Prepare printing plates and negatives) Receiving Accounting Printing Department Warehousing (ink, paper, etc.) Gluing, binding, stapling, labeling Collating Department Information flow Material flow Polywrap Department Shipping

5. Process Strategies • Involve determining how to produce a product or provide a service • Objective • Meet or exceed customer requirements • Meet cost & managerial goals • Has long-run effects • Product & volume flexibility • Costs & quality © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-8

6. Continuum Types of Process Strategies • Process strategies that follow a continuum • Within a given facility, several strategies may be used • These strategies are often classified as: Process-Focused Repetitive-Focused Product-Focused

8. Product A Operation 1 2 3 Product B Process-Focused StrategyJob Shop • Facilities are organized by process • Similar processes are together • Example: All drill presses are together • Low volume, high variety products • ‘Jumbled’ flow • Other names • Intermittent process • Job shop © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-11

9. Bank © 1995 Corel Corp. Hospital Machine Shop © 1995 Corel Corp. © 1995 Corel Corp. Process-Focused Strategy Examples © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-12

10. Process Focused Strategy -Pros & Cons • Advantages • Greater product flexibility • More general purpose equipment • Lower initial capital investment • Disadvantages • More highly trained personnel • More difficult production planning & control • Low equipment utilization (5% to 25%) © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-13

12. Batch Strategy • Facilities often organized in a line • Product is made in batches • Allows for many output options • Examples: beer, soup, paint, medicines • AKA Disconnected repetitive © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-14

13. Batch Strategy -Considerations • Allows for greater variety of product • Gains some cost efficiencies • More structured than process-focused, less structured than repetitive • Capacity is set by size of batch process © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-15

15. Repetitive Focused Strategy • Facilities often organized by assembly lines • Characterized by modules • Parts & assemblies made previously • Modules combined for many output options • Other names • Assembly line • Production line • Flow shop © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-14

16. Fast Food Clothes Dryer McDonald’sover 95 billion served Truck © 1995 Corel Corp. © 1984-1994 T/Maker Co. © 1995 Corel Corp. Repetitive-Focused Strategy - Examples © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-16

17. Repetitive Focused Strategy -Considerations • More structured than process-focused, less structured than product focused • Enables quasi-customization • Using modules, it enjoys economic advantage of continuous process, and custom advantage of low-volume, high-variety model • Less variety • Change in volume difficult © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-15

19. Products A & B 1 2 3 Operation Product-Focused Strategy • Facilities are organized by product • High volume, low variety products • Where found • Continuous process manufacturing • Commodities • Other names • Line flow production • Continuous production © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-17

20. Soft Drinks (Continuous, then Discrete) Light Bulbs (Discrete) © 1995 Corel Corp. © 1995 Corel Corp. Mass Flu Shots (Discrete) © 1984-1994 T/Maker Co. Paper (Continuous) © 1995 Corel Corp. Product-Focused Examples © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-19

21. Product-Focused Strategy Pros & Cons • Advantages • Lower variable cost per unit • Lower but more specialized labor skills • Easier production planning and control • Higher equipment utilization (70% to 90%) • Disadvantages • Lower product flexibility • More specialized equipment • Usually higher capital investment © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-18

23. Product-Process Examples • Auto industry • Prototype to high volume manufacturing • Food prep • Dream Dinners example for batch © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-15

25. Product-Process Examples • Auto industry • Prototype to high volume manufacturing • Food prep • Dream Dinners example for batch © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-15

27. Product-Process Examples • Auto industry • Prototype to high volume manufacturing • Food prep • Dream Dinners example for batch © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-15

29. End

30. Repetitive Process (Modular) Low-Volume (Intermittent) High-Volume (Continuous) Fit of Process, Volume, and Variety Process focus projects, job shops,(machine, print, carpentry) Standard Register Mass Customization (difficult to achieve, but huge rewards) Dell Computer Co. High Variety One or few units per run, high variety (allows customization) Changes in modules Modest runs, standardized modules Repetitive (autos, motorcycles) Harley Davidson Changes in attributes (such as grade, quality, size, thickness, etc.) Long runs only Poor strategy (Variable costs are high) Product focus (commercial baked goods, steel, glass) Nucor Steel

31. Volume and Variety of Products Volume and Low Volume High Repetitive High Volume Variety of Variety Process Process Low Variety Products (Intermittent) (Modular) Process (Continous) One or very few Projects Poor Strategy (Fixed costs and cost changing to other products are high) units per lot Very small runs, high Job Shops variety Modest runs, modest Disconnected variety Repetitive Batch Long runs, modest Connected Poor Strategy (High variable costs) variations Repetitive Very long runs, Continuous Changes in attributes Equipment utilization 5%-25% 20%-75% 70%-80% © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 7-24

32. Work Cells • Used when volume warrants a special arrangement of equipment • Take people and machines ordinarily dispersed • Arrange in a small group to focus on production of single product or group of related products

33. Work Cells • A temporary assembly-line-oriented arrangement of machines and personnel in what is ordinarily a process-oriented facility • Example: job shop with rearranged machinery and personnel to produce 30 unique control panels

34. Work Cells — Some Advantages • Reduced work-in-process inventory • Less floor space required • Reduced raw material and finished goods inventories required • Reduced direct labor costs • Heightened sense of employee participation • Increased utilization of equipment machinery • Reduced investment in machinery and equipment • Note: Green & Sadowski report increased capital investment and lower machine utilization TM 10 - 10