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

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

Process, Volume, and Variety Low Volume Repetitive Process High Volume Volume Figure 7.1 High Variety one or few units per run, (allows customization) Process Focus projects, job shops (machine, print, hospitals, restaurants) Arnold Palmer Hospital Mass Customization (difficult to achieve, but huge rewards) Dell Computer Changes in Modules modest runs, standardized modules Repetitive (autos, motorcycles, home appliances) Harley-Davidson Changes in Attributes (such as grade, quality, size, thickness, etc.) long runs only Product Focus (commercial baked goods, steel, glass, beer) Frito-Lay Poor Strategy (Both fixed and variable costs are high) © 2011 Pearson Education, Inc. publishing as Prentice Hall

Dealing with Product Variety: Mass Customization Long Lead Time Short Mass Customization Base goal in a supply chain: Flow time reduction (this is what the operations course was all about) High Low Cost Customization Low High

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

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

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

A Three-Station Assembly Line 2 min/unit 4 min/unit 3 min/unit A B C Figure S7.4 © 2011 Pearson Education, Inc. publishing as Prentice Hall

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

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 Bread Fill Toast 15 sec/sandwich 20 sec/sandwich 40 sec/sandwich © 2011 Pearson Education, Inc. publishing as Prentice Hall

Capacity Analysis Wrap 37.5 sec Order 30 sec Bread Fill Toast 15 sec 20 sec 40 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 30 + 15 + 20 + 40 + 37.5 = 142.5 seconds © 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/unit 8 min/unit Dentist Takes X-ray 5 min/unit X-ray exam Cleaning 24 min/unit © 2011 Pearson Education, Inc. publishing as Prentice Hall

Capacity Analysis All possible paths must be compared Check out 6 min/unit Check in 2 min/unit Develops X-ray 4 min/unit 8 min/unit Dentist Takes X-ray 5 min/unit X-ray exam Cleaning 24 min/unit All possible paths must be compared Cleaning path is 2 + 2 + 4 + 24 + 8 + 6 = 46 minutes X-ray exam path is 2 + 2 + 4 + 5 + 8 + 6 = 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 © 2011 Pearson Education, Inc. publishing as Prentice Hall

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

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