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Process Strategy

Process Strategy. Process Strategy. The process by which a firm converts inputs into goods and services The purpose is to build a production process that meets customer requirements and product specifications within the budget and other constraints. Types of Process Strategy. 4 Types:

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Process Strategy

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  1. Process Strategy

  2. Process Strategy • The process by which a firm converts inputs into goods and services • The purpose is to build a production process that meets customer requirements and product specifications within the budget and other constraints

  3. Types of Process Strategy • 4 Types: • Process Focus • Repetitive Focus • Product Focus • Mass Customization

  4. Process Focus Strategy • Low volume, high variety • Job shops • Meeting individual customer requirements • High flexibility of operation • AKA Intermittent Process • Examples: • Print • Hospitals

  5. Many variety of outputs Many inputs Many departments and many routings Process Focus Job Shop

  6. Repetitive Focus • Classic assembly line model • Modules • More customized product production • Less flexibility • Structured • Examples • Restaurants • Automobiles

  7. Modules combined for many output options Raw materials and module inputs Few modules Repetitive Focus Automobile Assembly Line

  8. Repetitive Focus: Harley Davidson

  9. Product Focus • AKA Continuous Process • Very long continuous production runs • High volume, low variety • Standardized production • High quality • Examples: • Glass • Light bulb

  10. Output variations in size, shape, and packaging Few inputs Product Focus Continuous Work Flow

  11. Mass Customization • Rapid, low cost production • What and when the customer wants it • Requires sophisticated operations capabilities • BTO • Examples: • Dell Computers • Toyota

  12. Dell Computers

  13. Comparison of Processes

  14. Comparison of Processes

  15. Comparison of Processes

  16. Comparison of Processes

  17. Comparison of Processes

  18. Comparison of Processes

  19. Process Analysis and Design • The following questions should be answered: • What type of competitive advantage is the process design trying to achieve? • Does the process eliminate steps that do not add value? • Does the process maximize value as perceived by the customer? • Will the process win orders?

  20. Tools of Process Analysis • Flow Diagram • Drawing showing the movement of inputs • Helps in understanding, analysis and communication of process • Time-Function Mapping • AKA Time-Function Mapping and Process Mapping • Same as flow diagram with the addition of time taken between processes • Helps in identifying and eliminating waste

  21. Tools of Process Analysis • Value-Stream Mapping (VSM) • Similar to process mapping, with the addition of an expansion of looking at where value is added in the entire production process • Process Chart • Use symbols, time and distance for analysis • Allows analyst to focus on value added activities

  22. Capacity • The number of units a facility can hold, receive, store or produce in a given period of time • Determines: • Capital requirements (fixed costs) • Satisfaction of demand • Facility usage

  23. Capacity Planning • Long-Range • Over one year • Adding facilities • Adding long lead time equipment • Intermediate Planning • 3 to 18 Months • Subcontracting • Adding : • Equipment • Shifts • Personnel

  24. Capacity Planning • Short Range Planning • Scheduling jobs • Scheduling personnel • Allocating machinery

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