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Ch 3 process strategies

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Shadina Shah

This document discusses different process strategies including process focus, repetitive focus, product focus, and mass customization. Process focus involves producing a high variety of products in low volumes using general purpose equipment. Repetitive focus uses specialized equipment and assembly lines for standardized, high volume production. Product focus is for very high volumes of standardized products using continuous, specialized automation. Mass customization combines flexibility and efficiency to produce high volumes of customized products.

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CHAPTER 3 Process Strategies (MGT345)
CHAPTER OUTLINE: 3.1 Introduction 3.2 Process Focus 3.3 Repetitive Focus 3.4 Product Focus 3.5 Mass Customization
3.1 INTRODUCTION According to Heizer and Render, a process (or transformation) strategy is an organization’s approach to transforming resources into goods and services. It involves of determining how to produce a product or provide a service. The objectives of process strategies are: a) Meet or exceed customer requirements b) Meet cost & managerial goals
A decision of process strategies will contribute to long run effect: a) Product & volume flexibility b) Costs & quality Basically there are four types of process strategies 1) Process focus 2) Repetitive focus 3) Product focus 4) Mass customization
3.2 PROCESS FOCUS (HIGH VARIETY, LOW VOLUME)  It also known as an intermittent process that is on a start-and-stop basis. Because process a high variety of products but in low volume.  The facilities (equipment, layout and supervision) are organized around specific activities or processes.  High degree of product flexibility.  Products move from one department to another according to customer orders.  The examples; hospitals, banks, printing company, restaurants and bakery shop.  Also known as batch production
PROCESS-FOCUSSED Manydepartmentsand manyroutings Many inputs Many variety of outputs
ADVANTAGES  Able to produces a wide variety of goods and services, often in small quantities.  General purpose equipment and labor force is highly skilled  Customization put the companies on guard of making sure the quality of product or services are continuously improved.
DISADVANTAGES  Many job instruction because each job changes and different order that required different sequence of processing steps.  The resources can be idle during the bottlenecks.
3.3 REPETITIVE FOCUS (MODULAR)  Also known as mass production.  Associated with flow lines or assembly lines.  From one workstation to the next in order.  Create more standardized products in larger quantities.  Low flexibility of equipment.  High volume with little or no customization.  For example: automotive industry, household appliances, fast food restaurants and most consumer goods.
REPETITIVE FOCUS Raw materials and module inputs Modules combined for many output options Few modules
PROCESS FLOW DIAGRAM THE ASSEMBLY LINE TESTING 28 tests Oil tank work cell Shocks and forks Handlebars Fender work cell Air cleaners Fluids and mufflers Fuel tank work cell Wheel work cell Roller testing Incoming parts From Milwaukee on a JIT arrival schedule Engines and transmissions Frame tube bending Frame-building work cells Frame machining Hot-paint frame painting Crating
ADVANTAGES  Mass production process rely on steady, high demand for a product, thus tend use highly productive.  There are no disruption to the process and few management problems since the product does not change  Unit costs for mass production are low.
DISADVANTAGES  Required some high capital investment  Skill requirement are lower than in job shops.  Lack of responsiveness to individual request.
3.4 PRODUCT FOCUS (HIGH VOLUME, LOW VARIETY) • For very high volume of no discrete, highly standardized output is desired. • Very long continuous production runs, highly specialized and automated equipment that control by computers. • Designed for goods or services that typically in operation continuously 24 hours a day. • Output is also continuous. • Individual units are measured rather than counted. • Examples include steel, paper, paints, chemicals, and foodstuff such as sugar, flour and rice. Coca-Cola Co.
PRODUCT FOCUS Few inputs Output variations in size, shape, and packaging
PRODUCT FOCUS Continuouscaster Continuous cast steel sheared into 24-ton slabs Hot tunnel furnace - 300 ft Hot mill for finishing, cooling, and coiling D E F GH I Scrap steel Ladle of molten steel Electric furnace A B C
ADVANTAGES  Ann efficient, ease control specialized nature of the system can set standard and maintain quality of high volume and low variety product.  The variable cost is low due to the high volume and the system requires a very small workforce.
DISADVANTAGES  Required a large investment in plant and highly specialized equipment.  Limited producing variety item.  The cost of correction errors is high.
3.5 MASS CUSTOMIZATION (HIGH VOLUME, HIGH VARIETY) • The rapid, low-cost production of goods and service to satisfy increasingly unique customer desire. • Combines the flexibility of a process focus with the efficiency of a product focus • Mass customization encompasses high volume production, high product variety, highly automated or technology operated. • For examples: Dell Computer, configuring each computer system to customer specifications & Motorola Company, producing one of a kind pager at low cost.
MASS CUSTOMIZATION Mass Customization Repetitive Focus Flexible people and equipment Modular techniques Supportive supply chains Process-Focused High variety, low volume Low utilization (5% to 25%) General-purpose equipment Product-Focused Low variety, high volume High utilization (70% to 90%) Specialized equipment Rapid throughput techniques Effective scheduling techniques
ADVANTAGES  Able to produce a large quantity and large variety with a low cost.  Operators are train for multi-skills for necessary customization using general purpose of equipment.
DISADVANTAGES  Custom orders require many job instruction.  Mass customization is tough unless the management can economically make precisely what and when the customer want it.
COMPARISON OF THE FOUR CHARACTERISTICS OF FOUR TYPES OF PROCESSES Process Focus (High variety of product, Low volume) Repetitive Focus (Modular Strategy) Product, Focus (Low variety of Product, High Volume) Mass Customization (High Variety of Product, High Volume) Small quantity, large variety of products Long runs, standardized product, from mode. Large quantity, small variety of products Large quantity, large variety of products General purpose equipment Special equipment aids in use of assembly line Special purpose equipment Rapid change over on flexible equipment Broadly skilled operators Modestly trained employees Operator less broadly skilled Flexible operators trained for customization Many instructions because of change in job Reduced training and number of job instructions Few work orders and job instructions Custom orders, require many instructions Raw materials high relative to product value JIT techniques use Raw material low relative to product value Raw material low relative to product value Finished goods, make to order, not stored Finished goods made to frequent forecasts Finished goods made to forecast, then stored Finished goods made to order Fixed costs low, variable costs high Fixed costs depends on flexibility of facilities Fixed costs high, variable costs low Fixed costs high, variable cost must be low

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Ch 3 process strategies

  • 2. CHAPTER OUTLINE: 3.1 Introduction 3.2 Process Focus 3.3 Repetitive Focus 3.4 Product Focus 3.5 Mass Customization
  • 3. 3.1 INTRODUCTION According to Heizer and Render, a process (or transformation) strategy is an organization’s approach to transforming resources into goods and services. It involves of determining how to produce a product or provide a service. The objectives of process strategies are: a) Meet or exceed customer requirements b) Meet cost & managerial goals
  • 4. A decision of process strategies will contribute to long run effect: a) Product & volume flexibility b) Costs & quality Basically there are four types of process strategies 1) Process focus 2) Repetitive focus 3) Product focus 4) Mass customization
  • 5. 3.2 PROCESS FOCUS (HIGH VARIETY, LOW VOLUME)  It also known as an intermittent process that is on a start-and-stop basis. Because process a high variety of products but in low volume.  The facilities (equipment, layout and supervision) are organized around specific activities or processes.  High degree of product flexibility.  Products move from one department to another according to customer orders.  The examples; hospitals, banks, printing company, restaurants and bakery shop.  Also known as batch production
  • 7. ADVANTAGES  Able to produces a wide variety of goods and services, often in small quantities.  General purpose equipment and labor force is highly skilled  Customization put the companies on guard of making sure the quality of product or services are continuously improved.
  • 8. DISADVANTAGES  Many job instruction because each job changes and different order that required different sequence of processing steps.  The resources can be idle during the bottlenecks.
  • 9. 3.3 REPETITIVE FOCUS (MODULAR)  Also known as mass production.  Associated with flow lines or assembly lines.  From one workstation to the next in order.  Create more standardized products in larger quantities.  Low flexibility of equipment.  High volume with little or no customization.  For example: automotive industry, household appliances, fast food restaurants and most consumer goods.
  • 11. PROCESS FLOW DIAGRAM THE ASSEMBLY LINE TESTING 28 tests Oil tank work cell Shocks and forks Handlebars Fender work cell Air cleaners Fluids and mufflers Fuel tank work cell Wheel work cell Roller testing Incoming parts From Milwaukee on a JIT arrival schedule Engines and transmissions Frame tube bending Frame-building work cells Frame machining Hot-paint frame painting Crating
  • 12. ADVANTAGES  Mass production process rely on steady, high demand for a product, thus tend use highly productive.  There are no disruption to the process and few management problems since the product does not change  Unit costs for mass production are low.
  • 13. DISADVANTAGES  Required some high capital investment  Skill requirement are lower than in job shops.  Lack of responsiveness to individual request.
  • 14. 3.4 PRODUCT FOCUS (HIGH VOLUME, LOW VARIETY) • For very high volume of no discrete, highly standardized output is desired. • Very long continuous production runs, highly specialized and automated equipment that control by computers. • Designed for goods or services that typically in operation continuously 24 hours a day. • Output is also continuous. • Individual units are measured rather than counted. • Examples include steel, paper, paints, chemicals, and foodstuff such as sugar, flour and rice. Coca-Cola Co.
  • 16. PRODUCT FOCUS Continuouscaster Continuous cast steel sheared into 24-ton slabs Hot tunnel furnace - 300 ft Hot mill for finishing, cooling, and coiling D E F GH I Scrap steel Ladle of molten steel Electric furnace A B C
  • 17. ADVANTAGES  Ann efficient, ease control specialized nature of the system can set standard and maintain quality of high volume and low variety product.  The variable cost is low due to the high volume and the system requires a very small workforce.
  • 18. DISADVANTAGES  Required a large investment in plant and highly specialized equipment.  Limited producing variety item.  The cost of correction errors is high.
  • 19. 3.5 MASS CUSTOMIZATION (HIGH VOLUME, HIGH VARIETY) • The rapid, low-cost production of goods and service to satisfy increasingly unique customer desire. • Combines the flexibility of a process focus with the efficiency of a product focus • Mass customization encompasses high volume production, high product variety, highly automated or technology operated. • For examples: Dell Computer, configuring each computer system to customer specifications & Motorola Company, producing one of a kind pager at low cost.
  • 20. MASS CUSTOMIZATION Mass Customization Repetitive Focus Flexible people and equipment Modular techniques Supportive supply chains Process-Focused High variety, low volume Low utilization (5% to 25%) General-purpose equipment Product-Focused Low variety, high volume High utilization (70% to 90%) Specialized equipment Rapid throughput techniques Effective scheduling techniques
  • 21. ADVANTAGES  Able to produce a large quantity and large variety with a low cost.  Operators are train for multi-skills for necessary customization using general purpose of equipment.
  • 22. DISADVANTAGES  Custom orders require many job instruction.  Mass customization is tough unless the management can economically make precisely what and when the customer want it.
  • 23. COMPARISON OF THE FOUR CHARACTERISTICS OF FOUR TYPES OF PROCESSES Process Focus (High variety of product, Low volume) Repetitive Focus (Modular Strategy) Product, Focus (Low variety of Product, High Volume) Mass Customization (High Variety of Product, High Volume) Small quantity, large variety of products Long runs, standardized product, from mode. Large quantity, small variety of products Large quantity, large variety of products General purpose equipment Special equipment aids in use of assembly line Special purpose equipment Rapid change over on flexible equipment Broadly skilled operators Modestly trained employees Operator less broadly skilled Flexible operators trained for customization Many instructions because of change in job Reduced training and number of job instructions Few work orders and job instructions Custom orders, require many instructions Raw materials high relative to product value JIT techniques use Raw material low relative to product value Raw material low relative to product value Finished goods, make to order, not stored Finished goods made to frequent forecasts Finished goods made to forecast, then stored Finished goods made to order Fixed costs low, variable costs high Fixed costs depends on flexibility of facilities Fixed costs high, variable costs low Fixed costs high, variable cost must be low