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Process Strategies  How to produce a product or provide a service that  Meets or exceeds customer requirements  Meets cost and managerial goals  Has.

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Presentation on theme: "Process Strategies  How to produce a product or provide a service that  Meets or exceeds customer requirements  Meets cost and managerial goals  Has."— Presentation transcript:

1 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

2 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

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

4 Dealing with Product Variety: Mass Customization Mass Customization High Low Long Short Lead Time Cost Customization

5 Tactics for Matching Capacity to Demand 1.Making staffing changes 2.Adjusting equipment  Purchasing additional machinery  Selling or leasing out existing equipment 3.Improving processes to increase throughput 4.Redesigning products to facilitate more throughput 5.Adding process flexibility to meet changing product preferences 6.Closing facilities

6 Bottleneck Analysis and Theory of Constraints  Each work area can have its own unique capacity  Capacity analysis determines the throughput capacity of workstations in a system  A bottleneck is a limiting factor or constraint  A bottleneck has the lowest effective capacity in a system

7 Process Times for Stations, Systems, and Cycles process time of a station  The process time of a station is the time to produce a unit at that single workstation process time of a system  The process time of a system is the time of the longest process in the system … the bottleneck process cycle time  The process cycle time is the time it takes for a product to go through the production process with no waiting

8 © 2011 Pearson Education, Inc. publishing as Prentice Hall A Three-Station Assembly Line Figure S7.4 2 min/unit4 min/unit3 min/unit ABC

9 Process Times for Stations, Systems, and Cycles system process time  The system process time is the process time of the bottleneck after dividing by the number of parallel operations system capacity  The system capacity is the inverse of the system process time process cycle time  The process cycle time is the total time through the longest path in the system

10 © 2011 Pearson Education, Inc. publishing as Prentice Hall Capacity Analysis  Two identical sandwich lines  Each line has two workers and a toaster to perform the three operations  All completed sandwiches are wrapped Wrap 37.5 sec/sandwich Order 30 sec/sandwich BreadFillToast 15 sec/sandwich 20 sec/sandwich 40 sec/sandwich BreadFillToast 15 sec/sandwich20 sec/sandwich40 sec/sandwich

11 © 2011 Pearson Education, Inc. publishing as Prentice Hall Capacity Analysis Wrap 37.5 sec Order 30 sec BreadFillToast 15 sec 20 sec 40 sec BreadFillToast 15 sec20 sec40 sec  Toast work station has the longest processing time – 40 seconds  The two lines each deliver a sandwich every 40 seconds so the process time of the combined lines is 40/2 = 20 seconds  At 37.5 seconds, wrapping and delivery has the longest processing time and is the bottleneck  Capacity per hour is 3,600 seconds/37.5 seconds/sandwich = 96 sandwiches per hour  Process cycle time is = seconds

12 © 2011 Pearson Education, Inc. publishing as Prentice Hall Capacity Analysis  Standard process for cleaning teeth  Cleaning and examining X-rays can happen simultaneously Check out 6 min/unit Check in 2 min/unit Develops X-ray 4 min/unit8 min/unit Dentist Takes X-ray 2 min/unit 5 min/unit X-ray exam Cleaning 24 min/unit

13 © 2011 Pearson Education, Inc. publishing as Prentice Hall Capacity Analysis  All possible paths must be compared  Cleaning path is = 46 minutes  X-ray exam path is = 27 minutes  Longest path involves the hygienist cleaning the teeth  Bottleneck is the hygienist at 24 minutes  Hourly capacity is 60/24 = 2.5 patients  Patient should be complete in 46 minutes Check out 6 min/unit Check in 2 min/unit Develops X-ray 4 min/unit 8 min/unit Dentist Takes X-ray 2 min/unit 5 min/unit X-ray exam Cleaning 24 min/unit

14 Theory of Constraints  Five-step process for recognizing and managing limitations Step 1: Step 1: Identify the constraint Step 2: Step 2:Develop a plan for overcoming the constraints Step 3: Step 3:Focus resources on accomplishing Step 2 Step 4: Step 4:Reduce the effects of constraints by offloading work or expanding capability Step 5: Step 5:Once overcome, go back to Step 1 and find new constraints

15 Bottleneck Management 1.Release work orders to the system at the pace set by the bottleneck 2.Lost time at the bottleneck represents lost time for the whole system 3.Increasing the capacity of a non-bottleneck station is a mirage 4.Increasing the capacity of a bottleneck increases the capacity of the whole system


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