Bài giảng Operations Management - Chapter 7: Process Strategy

Operations ManagementProcess StrategyChapter 71OutlineGLOBAL COMPANY PROFILE: DELL COMPUTER CO.FOUR PROCESS STRATEGIESProcess FocusRepetitive FocusProduct FocusMass Customization FocusComparison of Process Choices2Outline - ContinuedPROCESS ANALYSIS AND DESIGNFlow DiagramsTime-Function MappingProcess ChartsService BlueprintingSERVICE PROCESS DESIGNCustomer Interaction and Process DesignMore Opportunities to Improve Service ProcessesSELECTION OF EQUIPMENT AND TECHNOLOGY3Outline - ContinuedPRODUCTION TECHNOLOGYMachine TechnologyProcess ControlVision SystemsAutomated Storage and Retrieval SystemAutomated Guided Vehicle (AGV)Flexible Manufacturing Systems (FMS)Computer-Integrated Manufacturing (CIM)4Outline - ContinuedTECHNOLOGY IN SERVICESENVIRONMENTALLY FRIENDLY PROCESSESPROCESS REENGINEERING5Learning ObjectivesWhen you complete this chapter, you should be able to :Identify or Define:Process focusRepetitive focusProduct focusProcess reengineeringService process issuesEnvironmental issues6Learning Objectives - ContinuedWhen you complete this chapter, you should be able to:Describe or Explain:Process analysisService designGreen manufacturingProduction technology7Dell Computer Company“How can we make the process of buying a computer better?”Sell custom-build PCs directly to consumerIntegrate the Web into every aspect of its businessOperate with six days inventoryBuild computers rapidly, at low cost, and only when orderedFocus research on software designed to make installation and configuration of its PCs fast and simple8Fit of Process, Volume, and VarietyProcess focusprojects, job shops,(machine, print, carpentry)Standard RegisterRepetitive(autos, motorcycles)Harley DavidsonProduct focus(commercial baked goods, steel, glass)Nucor SteelHigh VarietyOne or few units per run, high variety(allows customization)Changes in modulesModest runs, standardized modulesChanges in attributes (such as grade, quality, size, thickness, etc.) Long runs onlyMass Customization(difficult to achieve, but huge rewards)Dell Computer Co.Poor strategyLow-Volume(Intermittent)Repetitive Process(Modular)High-Volume(Continuous)9Production Process Flow DiagramShippingCustomerCustomer sales representative(take order)Prepress Department(Prepare printing plates & negatives)Printing DepartmentCollating DepartmentGluing, binding, stapling, labelingPolywrap DepartmentPurchasing(order inks, paper, other supplies)VendorsReceivingWarehousing(ink, paper, etc.)AccountingInformation flowMaterial flow10Process StrategiesInvolve determining how to produce a product or provide a serviceObjectiveMeet or exceed customer requirementsMeet cost & managerial goalsHas long-run effectsProduct & volume flexibilityCosts & quality 11Types of Process StrategiesContinuumProcess strategies that follow a continuumWithin a given facility, several strategies may be usedThese strategies are often classified as:Repetitive-FocusedProduct-FocusedProcess-Focused12Process-Focused StrategyFacilities are organized by processSimilar processes are togetherExample: All drill presses are togetherLow volume, high variety products‘Jumbled’ flowOperationProduct AProduct B123Other namesIntermittent processJob shop13Process Focus14Process-Focused Strategy ExamplesBank© 1995 Corel Corp.Machine Shop© 1995 Corel Corp.Hospital© 1995 Corel Corp.15Process Focused Strategy - Pros & ConsAdvantagesGreater product flexibilityMore general purpose equipmentLower initial capital investmentDisadvantagesHigh variable costsMore highly trained personnelMore difficult production planning & controlLow equipment utilization (5% to 25%) 16Repetitive Focused StrategyFacilities often organized by assembly linesCharacterized by modulesParts & assemblies made previouslyModules combined for many output optionsOther namesAssembly line Production line17Repetitive Focus18Repetitive Focused Strategy -ConsiderationsMore structured than process-focused, less structured than product focusedEnables quasi-customizationUsing modules, it enjoys economic advantage of continuous process, and custom advantage of low-volume, high-variety model19Repetitive-Focused Strategy - ExamplesTruck© 1995 Corel Corp.Clothes Dryer© 1995 Corel Corp.Fast FoodMcDonald’sover 95 billion served© 1984-1994 T/Maker Co.20Flow Diagram Showing the Production Process for Harley Davidson, York, PA.21Product-Focused StrategyFacilities are organized by productHigh volume, low variety productsWhere foundDiscrete unit manufacturingContinuous process manufacturingOperationProducts A & B123Other namesLine flow productionContinuous production22Product Focus23Product-Focused Strategy Pros & ConsAdvantagesLower variable cost per unitLower but more specialized labor skillsEasier production planning and controlHigher equipment utilization (70% to 90%)DisadvantagesLower product flexibilityMore specialized equipmentUsually higher capital investment24Product-Focused Examples© 1995 Corel Corp.Light Bulbs (Discrete)Paper (Continuous)© 1984-1994 T/Maker Co.© 1995 Corel Corp.Soft Drinks (Continuous, then Discrete)Mass Flu Shots (Discrete)© 1995 Corel Corp.25Flow Diagram Showing the Steelmaking Process at NUCOR26A Comparison (1)Process Focus(Low volume, High variety)Repetitive Focus(Modular)Product focus(High-volume, low-variety)Mass Customization(High-volume, high-variety1. Small quantity, large variety of productsLong runs, standardized product, from modulesLarge quantity, small variety of productsLarge quantity, large variety of products2. General purpose equipmentSpecial equipment aids in use of assembly lineSpecial purpose equipmentRapid changeover on flexible equipment27A Comparison (2)Process FocusRepetitive FocusProduct focusMass Customization3 Broadly skilled operatorsModestly trained employeesOperators less broadly skilledFlexible operators trained for customization4 Many instructions because of change in jobsReduced training and number of job instructionsFew work orders and job instructionsCustom orders require many instructions5 Raw material high relative to product valueJIT techniques usedRaw material low relative to product valueRaw material low relative to product value28A Comparison (3)Process FocusRepetitive FocusProduct focusMass Customization6 WIP high relative to outputJIT techniques usedWIP low relative to outputWIP driven down by JIT, kanban, lean production7 Units move slowly thru plantMovement measured in hours & daysUnits move swiftly thru facilityGoods move swiftly thru facility8 Finished goods made to order, not storedFinished goods made to frequent forecastsFinished goods made to forecast, then storedFinished goods made to order29A Comparison (4)Process FocusRepetitive FocusProduct focusMass Customization9 Scheduling complex and concerned with trade-off between inventory, capacity, and customer serviceScheduling based on building models from a variety of forecastsScheduling relatively simple, concerns establishing sufficient rate of output to meet forecastsScheduling sophisticated to accommodate customization10 Fixed costs low, variable costs highFixed costs dependent on flexibility of facilitiesFixed costs high, variable costs lowFixed costs high; variable costs must be low30A Comparison (5)Process FocusRepetitive FocusProduct focusMass Customization11 Costing, done by job, is estimated prior to doing job but only known after doing jobCosts usually known based on experienceBecause of high fixed costs, cost dependent on utilization of capacityHigh fixed costs and dynamic variable costs31Process ContinuumProcess Focused(intermittent process)Repetitive Focus(assembly line)Product Focused (continuous process)ContinuumHigh variety, low volumeLow utilization (5% - 25%)General-purpose equipmentLow variety, high volumeHigh utilization (70% - 90%)Specialized equipmentModularFlexible equipment32Volume and Variety of ProductsVolume andVariety ofProductsLow Volume HighVariety Process(Intermittent)RepetitiveProcess(Modular)High VolumeLow VarietyProcess(Continuous)One or very fewunits per lotProjectsVery small runs, highvarietyJob ShopsModest runs, modestvarietyDisconnectedRepetitiveLong runs, modestvariationsConnectedRepetitiveVery long runs,changes inattributesContinuousEquipment utilization5%-25%20%-75%70%-80%Poor Strategy(High variable costs)Mass Customization33Mass CustomizationUsing technology and imagination to rapidly mass-produce products that cater to sundry unique customer desires.Under mass customization the three process models become so flexible that distinctions between them blur, making variety and volume issues less significant.34Mass Customization - More Choices Than evenEarly 21st CenturyItemEarly 1970sVehicle models140260Vehicle styles181,212Bicycle types819Software titles0300,000Web sites030,727,296Movie releases267458New book titles40,53077,446Houston TV channels5185Breakfast cereals160340Item SKUs in supermarkets14,000150,000Number of Choices35Process StrategiesRapid throughput techniquesMass CustomizationModular techniquesRepetitive FocusModular designFlexible equipmentProduct-focusedLow variety, high volumeHigh utilization (70% - 80%)Specialized equipmentProcess-focusedHigh variety, low volumeLow utilization (5% - 20%)General purpose equipmentEffective scheduling techniques36Questions for Process Analysis and DesignIs the process designed to achieve competitive advantage in terms of differentiation, response, or low cost?Does the process eliminate steps that do not add value?Does the process maximize customer value as perceived by the customer?Will the process win orders?37Crossover Charts$$$Fixed costVariable costFixed cost – Process AFixed cost – Process BFixed cost – Process C200,000300,000400,000$Total process C costsTotal process A costsProcess AProcess BProcess CV1(2,857)V2 (6,666)VolumeTotal process B costs38Tools for Process DesignFlow DiagramsProcess ChartsTime-Function/Process MappingWork Flow Analysis39Production Process Flow DiagramShippingCustomerCustomer sales representativetake orderPrepress Department(Prepare printing plates and negatives)Printing DepartmentCollating DepartmentGluing, binding, stapling, labelingPolywrap DepartmentPurchasing(order inks, paper, other supplies)VendorsReceivingWarehousing(ink, paper, etc.)AccountingInformation flowMaterial flow40Time Function Map(Baseline)CustomerSalesProduction controlPlant AWarehousePlant BTransportOrder ProductProcess OrderPrintExtrudeReceive productWaitMoveWaitWaitWaitMoveOrderOrderWIPWIPWIPWIPProductProductProduct12 days1 day1 day1 day1 day13 days4 days10 days9 days52 days41Time Function Map(Target)1 day1 day1 day1 day2 daysCustomerSalesProduction controlPlantWarehouseTransportOrder ProductProcess OrderPrintExtrudeReceive productWaitWaitMoveOrderOrderProductProductWIP6 days42SUBJECT: Request tool purchaseDist (ft)Time (min)SymbolDescriptionlðoDÑWrite order¡ðoD ÑOn desk75¡èoDÑTo buyer¡ðnDÑExamine¡ = Operation; ð = Transport; o = Inspect;  D = Delay; Ñ = StorageProcess Chart Example43Process Chart – Hamburger AssemblyDist. (Ft)Time (Mins)Chart SymbolsProcess Description-Meat Patty in Storage1.5.05Transfer to Broiler2.50Broiler.05Visual Inspection1.0.05Transfer to Rack.15Temporary Storage.5.10Obtain Buns, Lettuce, etc..20Assemble Order.5.05Place in Finish Rack3.53.15TOTALSValue-added time = Operation time/Total time = (2.50+.20)/3.15=85.7%ðⅮðⅮðⅮðⅮðⅮðⅮðⅮðⅮðⅮðⅮ 2 4 1 - 244Service Blueprint for Service at Ten Minute Lube, Inc.45Work Flow Analysis - Four PhasesRequest from a customer or an offer to provide services by a performerNegotiation, allowing the customer and the performer to agree on how the work should be done and what will constitute customer satisfactionPerformance of the assignment and completionAcceptance, closing the transaction provided the customer expresses satisfaction and agrees that the conditions were met.46Attaining Lean ProductionFocus on inventory reductionBuild systems that help employeesReduce space requirementsDevelop close relationships with suppliersEducate suppliersEliminate all but value-added activitiesDevelop the workforceMake jobs more challengingSet sights on perfection!47Customer Interaction and Process StrategyMass ServiceProfessional ServiceService FactoryService ShopCommercial BankingGeneral purpose law firmsFine dining restaurantsHospitalsAirlinesFull-service stockbrokerRetailingPersonal bankingBoutiquesLaw clinicsFast food restaurantsWarehouse and catalog storesNo frills airlinesLimited service stockbrokerFor-profit hospitalsDegree of Interaction and CustomizationDegree of Labor IntensityLow HighHigh Low48Techniques for Improving Service ProductivitySeparationSelf-servicePostponement FocusStructure service so customers must go where service is offeredSelf-service so customers examine, compare and evaluate at their own paceCustomizing at deliveryRestricting the offeringsStrategyTechnique49Techniques for Improving Service Productivity - ContinuedModulesAutomationSchedulingTrainingModular selection of service. Modular productionSeparating services that lend themselves to automationPrecise personnel schedulingClarifying the service optionsExplaining problemsImproving employee flexibility50More Opportunities to Improve Service ProcessesLayoutHuman ResourcesTechnology51Production Process & Technology Alternatives# Different Products or PartsCIMFlexible Manufacturing SystemLowHighGeneral Purpose, NC, CNCVolume of Products or PartsLowHighDedicatedAutomation52Areas of TechnologyMachine technologyAutomatic identification systems (AIS)Process controlVision systemRobotAutomated storage and retrieval systems (ASRS)Flexible manufacturing systems (FMS)Computer-integrated manufacturing (CIM)53Machine TechnologyIncreased precisionIncreased productivityIncreased flexibilityDecreased pollutionDecreased sizeDecreased power requirements54Process ControlIncreased process stabilityIncreased process precisionReal-time provision of information for process evaluationMulti-mode information presentation55Automatic Identification Systems (AIS)Improved data acquisitionIncreased scope of process automation56Vision SystemsParticular aid to inspectionConsistently accurateNever boredModest costSuperior to individuals performing the same tasks57RobotsPerform monotonous, or dangerous tasks, or those requiring significant strength or enduranceEnhanced consistency, accuracy, speed strength, power when substituted for human effort58Automated Storage and Retrieval Systems (ASRS)Automated placement and withdrawal of parts and productsParticularly useful in inventory and test areas of manufacturing firms59Automated Guided Vehicle (AGV)Electronically controlled movement of products and/or individuals60Flexible Manufacturing Systems (FMS)Computer controls both the workstation and the material handling equipmentComputer control enhance flexibilityCan economically produce low volume at high qualityReduced costs of changeover and low utilizationStringent communication requirement between components within it61Computer Integrated Manufacturing (CIM)Extension of flexible manufacturing systemsBackwards to engineering and inventory controlForward into warehousing and shippingCan also include financial and customer service areasReducing the distinction between low-volume/high-variety, and high-volume/low-variety productionHeavy reliance on information technology62Computer Integrated Manufacturing63Technology in ServicesService IndustryExampleFinancial servicesDebit cards, electronic funds transfer, ATMs, Internet stock tradingEducationElectronic bulletin boards, on-line journalsUtilities and governmentAutomated one-man garbage trucks, optical mail sorters, scanners, flood warning systemsRestaurants and foodsWireless orders from waiters to kitchen, robot butchering, transponders on cars to track drive-thrusCommunicationElectronic publishing, interactive TVHotelsElectronic check-in/check-out, electronic key/lock systemsWholesale/retail tradePoint-of-sale terminals, e-commerce, electronic communication between store and supplier, bar coded data64Technology in Services - ContinuedService IndustryExampleTransportationAutomatic toll booths, satellite-directed navigation systems, route planning, progress monitoringHealth careOn-line patient monitoring, on-line medical information systems, robotic surgery, expert system diagnosis assistanceAirlinesTicketless travel, scheduling, Internet ticket sales, improved navigation and route planning65Process ReengineeringThe fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performanceRelies on reevaluating the purpose of the process and questioning both the purpose and the underlying assumptionsRequires reexamination of the basic process and its objectivesFocuses on activities that cross boundaries66Showing Sensitivity to the EnvironmentMake products recyclableUse recycled materialsUse less harmful ingredientsUse light componentsUse less energyUse less materials67Factors Affecting Process AlternativesProduction flexibilityProduct volumeProduct varietyTechnologyCostHuman resourcesQualityReliabilityThese factors reduce the number of alternatives!© 1984-1994 T/Maker Co.68