Job Shop, Flow Shop, and Batch Processing

1. Job Shop, Flow Shop, and Batch Processing

2. Facility Layout : Job Shop Product 1 Product 2 Output A B Input C D

3. Job Shop (Functional Layout) Functional layout: similar resources in the same department. Ex. all press machines are located in stamping department. Ex. Bakeries, law firms, emergency rooms, repair shops. • low volume, high variety customized products • flexible resources • skilled human resources • jumbled work flows • high material handling • large volume of inventories • long flow time • highly structured information system • high cost per unit of product but low investment

4. Facility Layout : Flow Shop Product 1 Product 2 A D B Input Output C B A

5. Flow Shop (Product Layout) Product layout or line layout: Resources are arranged according to the sequence of the operations. Usually requires duplication ( and investment) of a resource pool; dedication of resources. Discrete flow shop; assembly line, Continuous flow shop; beverage. • high standardization, high speed • low material handling, short flow time • low flow unit processing cost • high investment cost; needs mass production. • special purpose equipment, and low skilled labor prevent flexibility Most processes fall somewhere on the continuum between Job Shop and Flow Shop; batch processing.

6. The Product-Process Matrix • The product-process matrix is a tool for improving strategic fit. It focuses on the match between product attributes – defined by the market segment and reflected in the customer value proposition – and process capabilities to deliver value. • It verifies alignment, often by comparing the degree of variety in the value proposition with the degree of flexibility in the process. This combination is then represented by a covered area in the matrix where the distance to the diagonal represents the degree of misalignment.

7. Matching Process Choice with Strategy: Product-Process Matrix Process Flexibility High JOB SHOP Commercial Printer, Architecture firm BATCH Heavy Equipment, Auto Repair Opportunity Opportunity Costs Costs FLOW SHOP Auto Assembly, Car lubrication shop CONTINUOUS Out-of-pocket Out-of-pocket FLOW Costs Costs Oil Refinery Low Product Variety High Low Jumbled Flow. Process segments loosely linked. Disconnected Line Flow/Jumbled Flow but a dominant flow exists. Connected Line Flow (assembly line) Continuous, automated, rigid line flow. Process segments tightly linked. Low Standardization High Standardization Commodity Products Few Major Products One of a kind Low Volume Many Products High volume

8. Matching Process Choice with Strategy: Product-Process Matrix Opportunity Costs Out-of-pocket Costs Process Flexibility A similar graph can be prepared to show the relationship between process flexibility and cost, or process flexibility and response time, but not for quality. High JOB SHOP Jumbled Flow. Process segments loosely linked. Commercial Printer, Architecture firm BATCH Disconnected Line Flow/Jumbled Flow but a dominant flow Heavy Equipment, Auto Repair exists. FLOW SHOP Connected Line Flow (assembly line) Auto Assembly, Car lubrication shop Continuous, automated, CONTINUOUS rigid line flow. Process segments tightly FLOW linked. Low Oil Refinery Product Variety High Low Low Standardization High Standardization Commodity Products Few Major Products One of a kind Low Volume Many Products High volume

9. The Product-Process Matrix • Positions outside the diagonal signal misalignment. Three star chefs who serve simple meals (burritos and tacos) with their highly flexible job shop process incur high opportunity costs. Substantial savings would result from changing resources (including chefs) and streamlining the process into a flow shop. • Asking Chipotle's to change its menu daily would require high changeover costs. Asking it to deliver a three-star dining experience is virtually impossible.