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7 - 1© 2011 Pearson Education, Inc. publishing as Prentice Hall 7 7 Process Strategy and Sustainability PowerPoint presentation to accompany Heizer and Render Operations Management, 10e Principles of Operations Management, 8e PowerPoint slides by Jeff Heyl
7 - 2© 2011 Pearson Education, Inc. publishing as Prentice Hall Process Strategies The objective of a process strategy is to build a production process that meets customer requirements and product specifications within cost and other managerial constraints
7 - 3© 2011 Pearson Education, Inc. publishing as Prentice Hall Process, Volume, and Variety Process Focus projects, job shops (machine, print, hospitals, restaurants) Arnold Palmer Hospital Repetitive (autos, motorcycles, home appliances) Harley-Davidson Product Focus (commercial baked goods, steel, glass, beer) Frito-Lay High Variety one or few units per run, (allows customization) Changes in Modules modest runs, standardized modules Changes in Attributes (such as grade, quality, size, thickness, etc.) long runs only Mass Customization (difficult to achieve, but huge rewards) Dell Computer Poor Strategy (Both fixed and variable costs are high) Low Volume Repetitive Process High Volume Volume Figure 7.1
7 - 4© 2011 Pearson Education, Inc. publishing as Prentice Hall Process Strategies How to produce a product or provide a service that Meets or exceeds customer requirements Meets cost and managerial goals Has long term effects on Efficiency and production flexibility Costs and quality
7 - 5© 2011 Pearson Education, Inc. publishing as Prentice Hall Process Strategies Four basic strategies 1.Process focus 2.Repetitive focus 3.Product focus 4.Mass customization Within these basic strategies there are many ways they may be implemented
7 - 6© 2011 Pearson Education, Inc. publishing as Prentice Hall Process Focus Facilities are organized around specific activities or processes General purpose equipment and skilled personnel High degree of product flexibility Typically high costs and low equipment utilization Product flows may vary considerably making planning and scheduling a challenge
7 - 7© 2011 Pearson Education, Inc. publishing as Prentice Hall Process Focus Many inputs (surgeries, sick patients, baby deliveries, emergencies) Many different outputs (uniquely treated patients) Many departments and many routings Figure 7.2(a) (low volume, high variety, intermittent processes) Arnold Palmer Hospital
7 - 8© 2011 Pearson Education, Inc. publishing as Prentice Hall Repetitive Focus Facilities often organized as assembly lines Characterized by modules with parts and assemblies made previously Modules may be combined for many output options Less flexibility than process-focused facilities but more efficient
7 - 9© 2011 Pearson Education, Inc. publishing as Prentice Hall Repetitive Focus Raw materials and module inputs Modules combined for many Output options (many combinations of motorcycles) Few modules (multiple engine models, wheel modules) Figure 7.2(b) (modular) Harley Davidson
7 - 10© 2011 Pearson Education, Inc. publishing as Prentice Hall Product Focus Facilities are organized by product High volume but low variety of products Long, continuous production runs enable efficient processes Typically high fixed cost but low variable cost Generally less skilled labor
7 - 11© 2011 Pearson Education, Inc. publishing as Prentice Hall Product Focus Few Inputs (corn, potatoes, water, seasoning) Output variations in size, shape, and packaging (3-oz, 5-oz, 24-oz package labeled for each material) Figure 7.2(c) (low-volume, high variety, continuous process) Frito-Lay
7 - 12© 2011 Pearson Education, Inc. publishing as Prentice Hall Product Focus Nucor Steel Plant Continuous caster Continuous cast steel sheared into 24-ton slabs Hot tunnel furnace ft Hot mill for finishing, cooling, and coiling D E F G H I Scrap steel Ladle of molten steel Electric furnace A B C
7 - 13© 2011 Pearson Education, Inc. publishing as Prentice Hall 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
7 - 14© 2011 Pearson Education, Inc. publishing as Prentice Hall Mass Customization Table 7.1 Vehicle models Vehicle types181,212 Bicycle types8211,000 Software titles0400,000 Web sites0162,000,000 Movie releases per year New book titles40,530300,000 Houston TV channels5185 Breakfast cereals Items (SKUs) in 14,000150,000 supermarkets LCD TVs0102 Number of Choices Item1970s21 st Century
7 - 15© 2011 Pearson Education, Inc. publishing as Prentice Hall Mass Customization Many parts and component inputs Many output versions (custom PCs and notebooks) Many modules (chips, hard drives, software, cases) Figure 7.2(d) (high-volume, high-variety) Dell Computer
7 - 16© 2011 Pearson Education, Inc. publishing as Prentice Hall Mass Customization Effective scheduling techniques Rapid throughput techniques Repetitive Focus Flexible people and equipment 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 Figure 7.3 Modular techniques Accommodating Product and Process Design Responsive Supply Chains
7 - 17© 2011 Pearson Education, Inc. publishing as Prentice Hall Mass Customization Imaginative and fast product design Rapid process design Tightly controlled inventory management Tight schedules Responsive supply chain partners
7 - 18© 2011 Pearson Education, Inc. publishing as Prentice Hall Crossover Charts Fixed costs Variable costs $ High volume, low variety Process C Fixed costs Variable costs $ Repetitive Process B Fixed costs Variable costs $ Low volume, high variety Process A Fixed cost Process A Fixed cost Process B Fixed cost Process C Total cost V1V1 (2,857) V2V2 (6,666) 400, , ,000 Volume $ Figure 7.4
7 - 19© 2011 Pearson Education, Inc. publishing as Prentice Hall Focused Processes Focus brings efficiency Focus on depth of product line rather than breadth Focus can be Customers Products Service Technology
7 - 20© 2011 Pearson Education, Inc. publishing as Prentice Hall Changing Processes Difficult and expensive May mean starting over Process strategy determines transformation strategy for an extended period Important to get it right
Introduction to Operations Management Contents 1- What is Operations Management (OM)? 2- Importance of OM. 3- OM decisions. 4- OM's contributions to.
1 OPERATIONS The term production and operations tend to be interchangeable today the main feature of operations is that there is an input, process, output.
The Ten Principles of Material Handling The Key to Greater Productivity, Customer Service and Profitability.
Operations management is concerned with producing the right goods and services at the right quality and quantity. They need to turn the factors of production.
MFG Assessment Application: Assessment Criteria and Metrics 1 Performance assessment criteria and metrics may be used as the basis for determining the.
3 – 1 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Process Strategy 3 For Operations Management, 9e by Krajewski/Ritzman/Malhotra.
Managing Processes and Capabilities CHAPTER THREE McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
Three Basic Truths I.Pervasiveness II.Interdependence III.Profitability and Survival.
Building Competitive Advantage through Functional Level Strategy Chapter 4.
PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc.,
Lean vs. Six Sigma. All Rights Reserved, Juran Institute, Inc. Lean vs. Six Sigma 2.PPT Learning Objectives 1.Understand DMAIC and Lean Methodologies.
9.1 © 2007 by Prentice Hall 9 Chapter Achieving Operational Excellence and Customer Intimacy: Enterprise Applications.
OPERATIONS MANAGEMENT +. Introduction ………………………………………………….
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Chapter1 Stocks and Inventories. Aims of the chapter Introduce the ideas that lie behind inventory management. Define the terms used. Describe the general.
Flow Analysis Factors that Affect the Flow Pattern Flow Analysis Information Flow Patterns a. Flow within Workstationsb. Flow within Departments c. Flow.
Maintenance Planning and Control : Modeling and Analysis w Slides on chapter 1.
© 2008 Prentice Hall, Inc.5 – 1 Operations Management Chapter 5 – Design of Goods and Services PowerPoint presentation to accompany Heizer/Render Principles.
RETURN ON INVESTMENT METHODS TO MAXIMIZE. WORKING CAPITAL COMPONENTS RAW MATERIAL, FINISHED GOODS AND GOODS IN SERVICE INVENTORIES, ACCOUNTS PAYABLE AND.
Chapter 13 Planning for Electronic Commerce. Learning Objectives In this chapter, you will learn about: Planning electronic commerce initiatives Strategies.
McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 5 The Value of Information.
Operations Performance Chapter 2. ContentsDefinition? The Reality Check Operations Strategy Vs Operations Management Strategic Fit Categories of Business.
ERP MODULES. HUMAN RESOURCE MODULE Human resource management is an essential factor of any successful business. The various subsystems under HR module.
IS, Organisations, and Strategy 28 November 2011.
Chapter 20 Operations Control McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
an inventory is a stock or store of goods and inventory management focuses on the planning and control of finished goods, raw materials, purchased.
7. Facilities layout. Definition Waller describes facility layout as Waller describes facility layout as the arrangement of machines, workstations, storage.
Learning Objectives 7.1 Describe the organizing process and how formal and informal organizations differ. 7.2 Identify some common types of organizational.
PowerPoint Presentation to Accompany Chapter 11 of Management Canadian Edition Schermerhorn Wright Prepared by:Michael K. McCuddy Adapted by: Lynda Anstett.
© 2007 Pearson Education Inventory Inventory Management Chapter 12.
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