1. Operations Management
Chapter 7 – Process Strategy
PowerPoint presentation to accompany
Heizer/Render
Principles of Operations Management, 6e
Operations Management, 8e
© 2006 Prentice Hall, Inc.

2. Process, Volume, and Variety
Low Volume
Repetitive Process
High Volume
Volume
Figure 7.1
High Variety
one or few units per run, high variety
(allows customization)
Process Focus
projects, job shops (machine, print, carpentry)
Standard Register
Mass Customization
(difficult to achieve, but huge rewards)
Dell Computer Co.
Changes in Modules
modest runs, standardized modules
Repetitive
(autos, motorcycles)
Harley Davidson
Changes in Attributes (such as grade, quality, size, thickness, etc.)
long runs only
Product Focus
(commercial baked goods, steel, glass)
Nucor Steel
Poor Strategy (Both fixed and variable costs are high)

3. Customer sales representative GLUING, BINDING, STAPLING, LABELING
Process Flow Diagram
Customer
Customer sales representative
Purchasing
PREPRESS DEPT
Vendors
Receiving
Warehouse
Accounting
PRINTING DEPT
COLLATING DEPT
GLUING, BINDING, STAPLING, LABELING
POLYWRAP DEPT
SHIPPING
Information flow
Material flow
Figure 7.2

4. Process Strategies Four basic strategies Process focus
Repetitive focus
Product focus
Mass customization
Within these basic strategies there are many ways they may be implemented

5. High variety of outputs
Process Focus
Print Shop
Many inputs
High variety of outputs

6. Repetitive Focus Automobile Assembly Line
Raw materials and module inputs
Modules combined for many output options
Few modules

7. Frame-building work cells Engines and transmissions
Process Flow Diagram
Frame tube bending
Frame-building work cells
Frame machining
Hot-paint
frame painting
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
Crating
Figure 7.3

8. Output variation in size, shape, and packaging
Product Focus
Bottling Plant
Output variation in size, shape, and packaging
Many inputs

9. Hot mill for finishing, cooling, and coiling
Product Focus
Scrap steel
Ladle of molten steel
Electric furnace A B C
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
Nucor Steel Plant

10. Effective scheduling techniques Rapid throughput techniques
Mass Customization
Repetitive Focus
Modular design
Flexible equipment
Figure 7.5
Modular techniques
Mass Customization
Effective scheduling techniques
Rapid throughput techniques
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

11. Low volume, high variety High volume, low variety
Crossover Charts
Fixed costs
Variable costs $
Low volume, high variety
Process A
Fixed costs
Variable costs $
Repetitive
Process B
Fixed costs
Variable costs $
High volume, low variety
Process C
Total cost
Total cost
Total cost
400,000
300,000
200,000
Volume $ V2
(6,666) V1
(2,857)
Fixed cost Process C
Fixed cost Process B
Fixed cost Process A
Figure 7.6

12. Time-Function Mapping
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

13. Time-Function Mapping
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

14. Process Chart
Figure 7.8

15. Service Blueprint Figure 7.9 Personal Greeting Service Diagnosis
Perform Service
Friendly Close
Level #1
Customer arrives for service
Warm greeting and obtain service request
Notify customer the car is ready
Customer departs
Customer pays bill No
Notify customer and recommend an alternative provider
Standard request
Determine specifics No
Can service be done and does customer approve?
Level #2
Direct customer to waiting room
Perform required work
Prepare invoice
Yes
Level #3
Potential failure point
Figure 7.9

16. Service Process Matrix
Service Factory
Service Shop
Degree of Customization
Low
High
Degree of Labor
Mass Service
Professional Service
Commercial banking
Private banking
General-
purpose law firms
Law clinics
Full-service stockbroker
Limited-service stockbroker
Retailing
Boutiques
Warehouse and catalog stores
Specialized hospitals
Hospitals
Fast food restaurants
Fine-dining restaurants
Airlines
No frills airlines
Figure 7.10

17. Process Control Software

18. Robotic Surgery

19. 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