MGMT 3240.61 Chapter 4 Process Design and Analysis

Describe the nature of the process swamp and the need to improve processes that matter to customers

Companies carry out hundreds or thousands of processes. It is critical to select processes to improve that most matter to customers, otherwise, improvements may be made that have no impact on end profits.

U=

Cycle Time Step (/) Cycle Time System (*) 100%

Identify the key differences between and the advantages and disadvantages of each product process type

In general, higher-volume processes have low per-unit costs, little flexibility, high capital investment, very specialized worker skills, and dedicated, single- purpose technology. In contrast, lower-volume processes have much higher flexibility, higher per-unit costs, lower capital investment, and both general worker skills and general-purpose equipment.

Customer involvement in Professional Service

High

Customer involvement in Service Shop

High

Labor Intensity in Mass Service

High

Labor Intensity in Professional Service

High

Explain the Hybrid layouts

It attempts to combine the advantages of process and product layouts by grouping disparate machines into work centers or cells to work on products with similar shapes and processing requirements.

Example of Service shop

Hospitals Auto repair Gourmet restaurants

Customer involvement in Mass Service

Low

Customer involvement in Service Factory

Low

Labor Intensity in Service Factory

Low

Labor Intensity in Service Shop

Low

Example of Service Factory

Movie theaters Airlines Hotels Fast Food Transportation

Characterize how strategic goals should be matched with appropriate process choices. .

No single product or service must be made with a specific process type. Cookies can be made in a low-volume job shop or a high-volume line process; thus, the choice of process type must be carefully matched with strategy.

Example of Professional Service

Physicians Lawyers Accountants

What are the three physical types of layouts

Process layouts Product layouts Hybrid layouts

Example of Mass Service

Retail stores Wholesalers Schools

Service factories

Services with both low customer contact/customization and a low degree of labor intensity

Identify process bottlenecks in terms of human, equipment, or demand limitations

The goal is to identify the bottleneck step that is the limiting factor in increasing output Every process has at least one bottleneck, which may be human labor, equipment capacity, or demand'

Describe the product process matrix for manufacturing organizations..

The product-process matrix matches product characteristics with process characteristics for manufactured products and includes project, job shop, batch, line flow, and continuous flow processes.

Describe the service process matrix for service organizations.

The service-process matrix matches product characteristics with process characteristics for services and includes the service factory, service shop, mass service, and professional service as process types.

straight-line distance between two points

(x, y) = coordinates of proposed site (xi, yi) = coordinates of existing facility

Explain the Process layouts

They group together machines, equipment, or people with similar functions or goals. Process layouts are typically used for lower-volume, flexible processes such as job shop, batch, service shop, or professional service.

Explain the Product layouts

This dedicate equipment and workers to specific products on a linear route. Product layouts are most often used for high-volume, relatively inflexible processes such as line flow, continuous flow, mass service, or service factory

Output=

Time Period (/) Cycle Time

Process Choice

a procedure involving numerous decisions regarding the relationships among workers, technology, raw materials, and job assignments

Service blueprint

a technique for describing and analyzing a service that incorporates the actions of both the customer and the server

Process simulation

a technique that employs computer software to develop a visual model of a process that incorporates multiple work centers, inputs, and processing techniques as variables

Self-Sourcing

a technique that includes customers in the process in a way that reduces the resource demands on the organization providing the product or service, while also providing the customer with improved service

Reengineering

a technique that involves a shift from a functional perspective on the business to a process-oriented perspective

Flowcharting

a technique that involves graphically portraying the key elements, steps, participants, and materials of a process

Project process

a type of process that has a high degree of customization, a large scope, a high degree of customer involvement, and the use of primarily generalized tools and equipment (HC)

Job Shop

a type of process that provides high flexibility to produce a variety of products in limited volumes

Gantt Chart

a visual representation of schedules for the resources used in a particular process or project

Load*distance score

a weighted calculation of load times the distance covered LD = the load-distance value li = the load expressed as a weight, number of trips, or units being shipped from the proposed site to location i di = the distance between the proposed site and location i

group technology

an approach in which the product parts having similarities (shape, usage, and/or manufacturing process) are grouped together to achieve a higher level of integration between the product design and manufacturing

Example of line flow

bicycle assembly

Example of Continuous flow

brewery

from-to charts

diagrams that show the number of trips or the amount of materials flowing between different departments or work centers

What is a higher-volume processes?

higher-volume processes have low per-unit costs, little flexibility, high capital investment, very specialized worker skills, and dedicated, single- purpose technology.

Examples of lower-volume processes

job shop batch service shop professional service.

Examples of higher-volume processes?

line flow continuous flow mass service or service factory

What is a lower-volume processes

lower-volume processes have much higher flexibility, higher per-unit costs, lower capital investment, and both general worker skills and general-purpose equipment.

Product-process matrix

matches product characteristics with the appropriate choice of production process

Example of Batch

neighborhood bakery

Continuous processes

processes that have high volume and low flexibility, and that work with nondiscrete items that are not divided into their final packages until the very end of production

Line process

processes that have high volumes, standardized products, and dedicated resources

Outsourcing

selecting suppliers with expertise in a particular area of business to produce and deliver a component part or service to an other company

Professional services

services with both high customer contact or customization and a high degree of labor intensity (HC AND HL)

Mass services

services with low customer contact or customization in combination with high labor intensity (LC AND HL)

Service Shops

services with low labor intensity but high customer contact or customization (HC AND LL)

Example of Project

software installation

Labor Intensity

the amount of labor needed to provide a service relative to the total amount off physical resources needed

Customer involvement

the degree to which customers are involved in shaping the end service/product that they receive

Output

the number of units that can be produced per unit of time

Utilization

the percentage of available time that equipment, space, or labor is used and adding value

Line of visibility

the point at which customers lose physical sight of the steps in a particular process; separates front-office operations that directly interact with customers from back-office operations that are more independent

Bottleneck

the step with the slowest cycle time in a given process; this is the step that limits the overall productivity for the process

Assembly line balancing

the technique of assigning work to individual stations so that the variability across all stations in an assembly line is minimized

Cycle time

the time it takes to complete a particular step or action once

Throughput time

the time that an individual unit must spend in a given process or step

Break-even analysis

a mathematical technique that allows a comparison of total costs for different processes

break-even analysis

a mathematical technique that allows a comparison of total costs for different processes

The International Benchmark Clearing House has categorized common business processes

Generate demand Fulfill demand Plan and manage the enterprise Develop products and services

Batch process

a higher volume job shop, in which the same or similar products are produced repetitively

product layout

a layout that dedicates equipment and workers to specific products on a linear route

Disadvantages of Process layouts

1. Frequent changeovers result in lost production time 2. High inventory levels are necessary to compensate for variable output rates 3. Product throughput time can be very long 4. Production planning and control is challenging

what are the three typical constraints that are often encountered in process analysis

1. Labor resources 2. Machine or equipment resources 3. Demand

Disadvantages of Product layouts

1. Low flexibility 2.Low utilization for lower-volume products 3.High risk of layout redesign for products/services with uncertain life cycles

Modeling begins with high-level models that reveal

1. see the sequence of steps 2. draw boundaries around the processes 3. identify key players and functional groups within bounded processes 4 identify handoffs between sub processes 5 identify supplier/customer interfaces

Advantages Product layouts

1.Faster processing rates 2. Lower inventories (and faster throughput) 3. Fewer changeovers, less material handling more efficient

Advantages of process layouts

1.Resources are general purpose and less capital intensive 2.flexibility is high-can adapt easily to changes in product mix or volume 3.Capacity utilization is high because of the ability to perform multiple jobs/tasks on each piece of equipment

Process layout

a layout that groups together machines, equipment, or people with similar functions or goals

Example of Job Shop

Commercial printer

CT=cycle time T=throughput time C=capacity

T/C Throughput time (/) Capacity

Explain the effects of computerized technologies, including the Internet, on traditional product/process relationships

Technological improvements offer a fundamental way to improve processes. Computerized technologies in particular provide customers with greater access, decrease costs for the organization offering the product or service, and help improve the tracking of and accounting for information.

fixed-position layout

a layout that requires the product (because of its extreme weight or size) to remain at one location