1. OPSM 301 Operations Management Spring 2012 Class 3:Process Types
Evrim Didem Güneş

2. TODAY Shouldice discussion-wrap-up Process types
Product-Process matrix

3. Classification of Processes by process architecture
Project
Job Shop
Batch
Line flow
Continuous Flow
Job Shop
Process-focused
Flow Shop
Product-focused

4. Organization of Production Processes
Project: the product remains in a fixed location
Manufacturing equipment is moved to the product
Job shop (Workcenter): similar equipment or functions are grouped together
Assembly line: work processes are arranged according to the progressive steps by which the product is made
Continuous process: assembly line, only the flow is continuous such as with liquids 11

5. Project Layout One of a kind products are produced
Making of a Boeing

6. The Job shop similar equipment or functions are grouped together
High variety, low volume production
Routing matrix based upon flow of parts

7. Job-Shop Process Examples (Also called process focused)
Bank
© 1995 Corel Corp.
Machine Shop
Hospital

8. Process Focused Strategy - Pros & Cons
Advantages
Greater product flexibility
More general purpose equipment
Lower initial capital investment
Disadvantages
High variable costs
More highly trained personnel
More difficult production planning & control
Low equipment utilization (5% to 25%)

9. Assembly Line-Flow Line (Mass Production) work processes are arranged according to the progressive steps by which the product is made
Low cost, high volume production
Low variety
Ford Model T, first moving assembly line, 1913
BMW precision line

10. The Flow Line Process Product Layout Discrete Parts Rigid Flow Pattern
Product Mix of Standard Products

11. Product Layout Product #1735B Start Production Drill Lathe Press #1
Packaging Machine #2
Drill
Press #2
Paint Machine
Finish Production

12. Product-Focused Strategy Pros & Cons
Advantages
Lower variable cost per unit
Lower but more specialized labor skills
Easier production planning and control
Higher equipment utilization (70% to 90%)
Disadvantages
Lower product flexibility
More specialized equipment
Usually higher capital investment

13. Matching Process Choice with Strategy: Product-Process Matrix
Flexibility
Jumbled Flow.
Process segments
loosely linked.
Disconnected Line
Flow/Jumbled Flow
but a dominant flow
exists.
JOB SHOP
(Commercial Printer,
Architecture firm)
BATCH
(Heavy Equipment,
Auto Repari)
LINE FLOWS
(Auto Assembly,
Car lubrication shop)
CONTINUOUS
FLOW
(Oil Refinery)
Product
Variety
Low
Low Standardization
One of a kind
Low Volume
Many Products
Few Major Products
High volume
High Standardization
Commodity Products
Connected Line
Flow (assembly line)
Continuous, automated,
rigid line flow.
Process segments tightly
linked.
Opportunity
Costs
Out-of-pocket
High

14. Making of a Boeing
Ford Model T
BMW precision line
Nissan GT-R
How it’s made:Bread
How paper is made

15. Positioning Inventory in the Supply Chain

16. Production Processes Terms
Lead time: the time needed to respond to a customer order
Customer order decoupling point: where inventory is positioned to allow entities in the supply chain to operate independently

17. Types of Firms
Make-to-stock firms: Firms that serve customers from finished goods inventory
Assemble-to-order firms: firms that combine a number of preassembled modules to meet a customer’s specifications
Make-to-order firms: that make the customer’s product from raw materials, parts, and components
Engineer-to-order firm: firm that will work with the customer to design and then make the product

18. Make to Stock Examples of products
Televisions
Clothing
Packaged food products
Essential issue in satisfying customers is to balance the level of inventory against the level of customer service
Easy with unlimited inventory but inventory costs money
Trade-off between the costs of inventory and level of customer service must be made
Use lean manufacturing to achieve higher service levels for a given inventory investment

19. Assemble-to-Order
A primary task is to define a customer’s order in terms of alternative components since these are carried in inventory
An example is the way Dell Computer makes their desktop computers
One capability required is a design that enables as much flexibility as possible in combining components
There are significant advantages from moving the customer order decoupling point from finished goods to components

20. Make-to-Order and Engineer-to-Order
Boeing’s process for making commercial aircraft is an example
Customer order decoupling point could be in either raw materials at the manufacturing site or the supplier inventory
Depending on how similar the products are it might not even be possible to pre-order parts

21. Assignment 1 (individual) Due Next Tuesday 21 February
Read the Thicketwood Ltd. Case
What are the main products of Thicketwood Ltd?
Identify the four product attributes for the product. Explain each attribute with facts from the case.
Which process type is used to produce Thicketwood products? Is it appropriate for this product? Why, why not? Support your argument with facts from the case.

22. Next Time
Business Process Flows
Chapter 3