Chapter 3: Product Design and Process Selection

Why is a process flowchart useful?

for seeing the totality of the operation and for identifying potential problem areas

What type of operations focus on products in the early stage of the life cycle?

intermittent

Which type of operation is used to produce many different products with varying process requirements in lower volumes?

intermittent

What type of machine is controlled by a computer and can do a variety of tasks, such as drilling, boring, or turning parts of different sizes and shapes?

numerically controlled

Continuous processes

operate continually to produce a very high volume of a fully standardized product. Examples include oil refineries, water treatment plants, and certain paint facilities. The products produced by continuous processes are usually in continual rather than discrete units, such as liquid or gas. They usually have a single input and a limited number of outputs. Also, these facilities are usually highly capital intensive and automated.

Which of the following is a tool for evaluating an operation in terms of the sequence of steps from inputs to outputs with the goal of improving its design?

process flow analysis

Concurrent engineering is

simultaneously design the product and the process

Which of the following is not a fixed cost?

materials

What is Raissa's cookie company revenue if she sells 200 chocolate chip cookies at $1.50 each?

$300

What is the maximum variable cost a firm can have to meet a target break even cost of $ with a fixed cost of $400,000.00 if they project they can sell 25,000 units at a unit cost of $75.00?

59

Process flowcharts can also be used to map the flow of the customer through the process and to identify potential problem areas. Figure 3.9 shows a flowchart for Antonio's Pizzeria that includes the steps involved in placing and processing a customer order. The points in the process for potential problems are indicated. Management can then monitor these problem areas. The chart could be even more detailed, including information such as frequency of errors or approximate time to complete a task. As you can see, process flowcharts are very useful tools when designing and evaluating processes.

FIGURE 3.9 Process flowchart of customer flow at Antonio's Pizzeria

Dividing processes into two fundamental categories of operations is helpful in our understanding of their general characteristics. To be more detailed, we can further divide each category according to product volume and degree of product standardization, as follows. Intermittent operations can be divided into project processes and batch processes. Repetitive operations can be divided into line processes and continuous processes

Figure 3.6 shows a continuum of process types. Next we look at what makes these processes different from each other.

Now let's look at an illustration of a flowchart using Antonio's Pizzeria as an example. Let's say that Antonio produces three different styles of pizzas to satisfy different types of customers. First are cheese pizzas made with standard ingredients and a standard crust.

First are cheese pizzas made with standard ingredients and a standard crust. They are the most popular items, and Antonio makes them ahead of time to ensure that they are always available upon demand. This is called a make-to-stock strategy.

A process flowchart is used for viewing the flow of the processes involved in producing the product.

It is a very useful tool for seeing the totality of the operation and for identifying potential problem areas. There is no exact format for designing the chart. The flowchart can be very simple or very detailed.

An important way of ensuring that a process is functioning properly is to regularly measure its performance.

Process performance metrics are measurements of different process characteristics that tell us how a process is performing. Just as accountants and finance managers use financial metrics, operations managers use process performance metrics to determine how a process is performing and how it is changing over time. There are many process performance metrics that focus on different aspects of the process. In this section we will look at some common metrics used by operations managers. These are summarized in Table 3.3.

Quite possibly much of the time at your last doctor's appointment was spent waiting. An important metric that measures how much wasted time exists in a process is process velocity.

Process velocity is computed as a ratio of throughput time to value-added time:where value-added time is the time spent actually working on the product. Notice that the closer this ratio is to 1.00, the lower the amount of time the product spends on non-value-adding activities (e.g., waiting). Again recall your last doctor's appointment. What was the value-added time? What was the throughput time? Can you estimate the process velocity?

Another important metric is productivity, which is the ratio of outputs over inputs.

Productivity measures how well a company converts its inputs to outputs. Productivity was discussed in detail in Chapter 2, so we will not repeat its computation here. Also important is utilization, which is the ratio of the time a resource is actually used versus the time it is available for use. Unlike productivity, which tends to focus on financial measures (e.g., dollars of output), utilization measures the actual time that a resource (e.g., equipment or labor) is being used. Last, efficiency is a metric that measures actual output relative to some standard of output. It tells us whether we are performing at, above, or below standard.

The most common differences between intermittent and repetitive operations relate to two dimensions: (1) the amount of product volume produced, and (2) the degree of product standardization. Product volume can range from making a unique product one at a time to producing a large number of products at the same time. Product standardization refers to a lack of variety in a particular product. Examples of standardized products are white undershirts, calculators, toasters, and television sets. The type of operation used, including equipment and labor, is quite different if a company produces one product at a time to customer specifications instead of mass production of one standardized product.

Specific differences between intermittent and repetitive operations are shown in Table 3.2. TABLE 3.2 Differences between Intermittent and Repetitive Operations

Often stages in the production process can be performed in parallel, as shown in Figure 3.7(c) and (d).

The two stages can produce different products (c) or the same product (d). Notice that in the latter case this would mean that the capacity of the stage performed in parallel has effectively been doubled.

A basic process performance metric is throughput time, which is the average amount of time it takes a product to move through the system.

This includes the time someone is working on the product as well as the waiting time. A lower throughput time means that more products can move through the system. One goal of process improvement is to reduce throughput time. For example, think about the time spent at your last doctor's appointment. The total amount of time you spent at the facility, regardless of whether you were waiting, talking with the physician, or having lab work performed, is throughput time.

Lastly are pizzas made to order based on specific customer requirements, allowing choices of different types of crusts and toppings.

This is called a make-to-order strategy. We will look at these product strategies more closely later in this chapter. For now, let's look at the flowcharts for the three processes in Figure 3.8. Notice that although the flowcharts are similar, they show customer interaction at different points in the process.

Second are pizzas that use a standard crust prepared ahead of time but are assembled based on specific customer requests

This is called an assemble-to-order strategy.

What is Reverse engineering?

acquiring a competitor's product and studying its design feature

All product designs begin with ____________________________.

an idea

Line processes

are designed to produce a large volume of a standardized product for mass production. They are also known as flow shops, flow lines, or assembly lines. With line processes the product that is produced is made in high volume with little or no customization. Think of a typical assembly line that produces everything from cars, computers, television sets, shoes, candy bars, even food items.

Project processes

are used to make one-of-a-kind products exactly to customer specifications. These processes are used when there is high customization and low product volume, because each product is different. Examples can be seen in construction, shipbuilding, medical procedures, creation of artwork, custom tailoring, and interior design. With project processes the customer is usually involved in deciding on the design of the product. The artistic baker you hired to bake a wedding cake to your specifications uses a project process.

Intermittent operations

are used to produce a variety of products with different processing requirements in lower volumes. Examples are an auto body shop, a tool and die shop, or a healthcare facility. Because different products have different processing needs, there is no standard route that all products take through the facility. Instead, resources are grouped by function and the product is routed to each resource as needed. Think about a healthcare facility. Each patient, "the product," is routed to different departments as needed. One patient may need to get an X-ray, go to the lab for blood work, and then go to the examining room. Another patient may need to go to the examining room and then to physical therapy. To be able to produce products with different processing requirements, intermittent operations tend to be labor intensive rather than capital intensive. Workers need to be able to perform different tasks, depending on the processing needs of the products produced. Often we see skilled and semiskilled workers in this environment, with a fair amount of worker discretion in performing their jobs. Workers need to be flexible and able to perform different tasks as needed for the different products. Equipment in this type of environment is more general-purpose to satisfy different processing requirements. Automation tends to be less common because automation is typically product-specific. Given that many products are being produced with different processing requirements, it is usually not cost efficient to invest in automation for only one product type. Finally, the volume of goods produced is directly tied to the number of customer orders.

Repetitive operations

are used to produce one or a few standardized products in high volume. Examples are a typical assembly line, cafeteria, or automatic car wash. Resources are organized in a line flow to efficiently accommodate production of the product. Note that in this environment it is possible to arrange resources in a line because there is only one type of product. This is directly the opposite of what we find with intermittent operations. To efficiently produce a large volume of one type of product, these operations tend to be capital intensive rather than labor intensive. An example is "mass-production" operations, which usually have much invested in their facilities and equipment to provide a high degree of product consistency. Often these facilities rely on automation and technology to improve efficiency and increase output rather than on labor skill. The volume produced is usually based on a forecast of future demands rather than on direct customer orders.

Batch processes

are used to produce small quantities of products in groups or batches based on customer orders or product specifications. They are also known as job shops. The volumes of each product produced are still small, and there can still be a high degree of customization. Examples can be seen in bakeries, education, and printing shops. The classes you are taking at the university use a batch process.

The classes that you are taking at the university use a ___________ process.

batch

If the third stage of a repetitive line process cannot complete its activities as fast as stage one or two it has become a:

bottle neck

What technique is based on computing the quantity of goods a company needs to sell to just cover its costs?

break-even analysis

Which of the following is not characteristic of intermittent operations?

capital intensive

Which one of these refers to reducing the number of parts and features of the product whenever possible?

design simplification

What refers to the use of common and interchangeable parts?

design standardization

Production processes can be divided into two broad categories:

intermittent and repetitive operations. Intermittent operations are used when products with different characteristics are being produced in smaller volumes. These types of operations tend to organize their resources by grouping similar processes together and having the products routed through the facility based on their needs. Repetitive operations are used when one or a few similar products are produced in high volume. These operations arrange resources in sequence to allow for an efficient buildup of the product. Both intermittent and repetitive operations have their advantages and disadvantages. Intermittent operations provide great flexibility but have high material handling costs and challenge scheduling resources. Repetitive operations are highly efficient but inflexible.

Process flow analysis

is a technique used for evaluating a process in terms of the sequence of steps from inputs to outputs with the goal of improving its design. One of the most important tools in process flow analysis is a process flowchart

A process flowchart

is used for viewing the sequence of steps involved in producing the product and the flow of the product through the process. It is useful for seeing the totality of the operation and for identifying potential problem areas.

What type of process is designed to produce a large volume of a standardized product for mass production, such as automobiles?

line processes

The ease with which the product can be made is its

manufacturability

Which type of process would be least likely to produce goods for inventory rather than for a specific customer request?

project

Building a bridge over the Mississippi River for a new highway uses a

project process

Building a bridge over the placeMississippi River for a new highway uses a

project process

Highly labor intensive services are called ___________________________.

pure services

Vertical integration decisions is a better strategic decision for

repetitive operations