1. Operations Management
Chapter 7 –
Process Strategy
PowerPoint presentation to accompany
Heizer/Render
Principles of Operations Management, 7e
Operations Management, 9e

2. Mass Customization
The rapid, low-cost production of goods and service to satisfy increasingly unique customer desires
Combines the flexibility of a process focus with the efficiency of a product focus

3. Changing Processes Difficult and expensive May mean starting over
Process strategy determines transformation strategy for an extended period
Important to get it right

4. Process Analysis and Design
Flow Diagrams - Shows the movement of materials
Time-Function Mapping - Shows flows and time frame
Value-Stream Mapping - Shows flows and time and value added beyond the immediate organization
Process Charts - Uses symbols to show key activities
Service Blueprinting - focuses on customer/provider interaction

5. “Baseline” Time-Function Map
Customer
Sales
Production control
Plant A
Warehouse
Plant B
Transport
Order product
Process order
Wait
Move
Receive product
Print
Wait
Move
Wait
Extrude
Wait
12 days
13 days
1 day
4 days
10 days
0 day
52 days
Figure 7.7

6. “Target” Time-Function Map
Customer
Sales
Production control
Plant
Warehouse
Transport
Order product
Process order
Wait
Move
Receive product
Extrude
Wait
Print
1 day
2 days
6 days
Figure 7.7

7. Value-Stream Mapping
Figure 7.8

8. Process Chart
Figure 7.9

9. Service Blueprint Focuses on the customer and provider interaction
Defines three levels of interaction
Each level has different management issues
Identifies potential failure points

10. Service Blueprint Figure 7.10 Personal Greeting Service Diagnosis
Perform Service
Friendly Close
Level #1
Customer arrives for service
Warm greeting and obtain service request F
Notify customer the car is ready
Customer departs
Customer pays bill F No
Notify customer and recommend an alternative provider
Standard request
Determine specifics No
Can service be done and does customer approve? F
Level #2
Direct customer to waiting room F
Perform required work
Prepare invoice
Yes F
Level #3
Figure 7.10

11. Process Analysis Tools
Flowcharts provide a view of the big picture
Time-function mapping adds rigor and a time element
Value-stream analysis extends to customers and suppliers
Process charts show detail
Service blueprint focuses on customer interaction

12. Equipment and Technology
Often complex decisions
Possible competitive advantage
Flexibility
Stable processes
May allow enlarging the scope of the processes

13. Production Technology
Machine technology
Automatic identification systems (AISs)
Process control
Vision system
Robot
Automated storage and retrieval systems (ASRSs)
Automated guided vehicles (AGVs)
Flexible manufacturing systems (FMSs)
Computer-integrated manufacturing (CIM)

14. Machine Technology Increased precision Increased productivity
Increased flexibility
Improved environmental impact
Reduced changeover time
Decreased size
Reduced power requirements

15. Automatic Identification Systems (AISs)
Improved data acquisition
Reduced data entry errors
Increased speed
Increased scope of process automation
Example – Bar codes and RFID

16. Process Control Increased process stability
Increased process precision
Real-time provision of information for process evaluation
Data available in many forms

17. Process Control Software

18. Vision Systems Particular aid to inspection Consistently accurate
Never bored
Modest cost
Superior to individuals performing the same tasks

19. Robots Perform monotonous or dangerous tasks
Perform tasks requiring significant strength or endurance
Generally enhanced consistency and accuracy

20. Automated Storage and Retrieval Systems (ASRSs)
Automated placement and withdrawal of parts and products
Reduced errors and labor
Particularly useful in inventory and test areas of manufacturing firms

21. Automated Guided Vehicle (AGVs)
Electronically guided and controlled carts
Used for movement of products and/or individuals

22. Flexible Manufacturing Systems (FMSs)
Computer controls both the workstation and the material handling equipment
Enhance flexibility and reduced waste
Can economically produce low volume at high quality
Reduced changeover time and increased utilization
Stringent communication requirement between components

23. Computer-Integrated Manufacturing (CIM)
Extension of flexible manufacturing systems
Backwards to engineering and inventory control
Forward into warehousing and shipping
Can also include financial and customer service areas
Reducing the distinction between low-volume/high-variety, and high-volume/low-variety production

24. Computer-Integrated Manufacturing (CIM)
Figure 7.12

25. Technology in Services
Service Industry
Example
Financial Services
Debit cards, electronic funds transfer, ATMs, Internet stock trading
Education
Electronic bulletin boards, on-line journals, WebCT and Blackboard
Utilities and government
Automated one-man garbage trucks, optical mail and bomb scanners, flood warning systems
Restaurants and foods
Wireless orders from waiters to kitchen, robot butchering, transponders on cars that track sales at drive-throughs
Communications
Electronic publishing, interactive TV
Table 7.4

26. Technology in Services
Service Industry
Example
Hotels
Electronic check-in/check-out, electronic key/lock system
Wholesale/retail trade
ATM-like kiosks, point-of-sale (POS) terminals, e-commerce, electronic communication between store and supplier, bar coded data
Transportation
Automatic toll booths, satellite-directed navigation systems
Health care
Online patient-monitoring, online medical information systems, robotic surgery
Airlines
Ticketless travel, scheduling, Internet purchases
Table 7.4

27. Process Redesign
The fundamental rethinking of business processes to bring about dramatic improvements in performance
Relies on reevaluating the purpose of the process and questioning both the purpose and the underlying assumptions
Requires reexamination of the basic process and its objectives
Focuses on activities that cross functional lines
Any process is a candidate for redesign

28. Ethics and Environmentally Friendly Processes
Reduce the negative impact on the environment
Encourage recycling
Efficient use of resources
Reduction of waste by-products
Use less harmful ingredients
Use less energy