1. Course Title: Production and Operations Management Course Code: MGT 362 Course Book: Operations Management 10th Edition. By Jay Heizer & Barry Render

2. Chapter 7: Process Strategy and Sustainability

3. Global Company Profile: Harley-Davidson Four Process Strategies
Summary
Global Company Profile: Harley-Davidson
Four Process Strategies
Process Focus
Repetitive Focus
Product Focus
Mass Customization Focus
Comparison of Process Choices

4. Process Analysis and Design
Outline
Process Analysis and Design
Flow Charts
Time-Function Mapping
Value-Stream Mapping
Process Charts
Service Blueprinting

5. Special Consideration for Service Process Design
Outline
Special Consideration for Service Process Design
Customer Interaction and Process Design
More Opportunities to Improve Service Processes
Selection of Equipment and Technology

6. Production Technology
Outline
Production Technology
Machine Technology
Automatic Identification Systems (AISs) and RFID
Process Control
Vision Systems
Robots

7. Example 1

8. 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 7.4

9. Process Analysis and Design
Is the process designed to achieve a competitive advantage?
Does the process eliminate steps that do not add value?
Does the process maximize customer value?
Will the process win orders?

10. Process Analysis and Design
Flow Charts - Shows the movement of materials
Time-Function Mapping - Shows flows and time frame

11. “Baseline” Time-Function Map
Customer
Sales
Production control
Plant A
Warehouse
Plant B
Transport
Order product
Process order
Wait
Order
Move
Receive product
Product
Print
Wait
Order
WIP
Extrude
Wait
WIP
Product
Move
Wait
WIP
12 days
13 days
1 day
4 days
10 days
0 day
52 days
Figure 7.5

12. “Target” Time-Function Map
Customer
Sales
Production control
Plant
Warehouse
Transport
Order product
Process order
Wait
Order
Move
Receive product
Product
Extrude
Wait
Print
Order
WIP
Product
1 day
2 days
6 days
Figure 7.5

13. Process Analysis and Design
Flow Charts - Shows the movement of materials
Time-Function Mapping - Shows flows and time frame
Value-Stream Mapping - Shows flows and time and value added beyond the immediate organization
Process Charts - Uses symbols to show key activities
Service Blueprinting - focuses on customer/provider interaction

14. Value-Stream Mapping
Figure 7.6

15. Process Chart
Figure 7.7

16. Focuses on the customer and provider interaction
Service Blueprinting
Focuses on the customer and provider interaction
Defines three levels of interaction
Each level has different management issues
Identifies potential failure points

17. Service Blueprint Figure 7.8 Personal Greeting Service Diagnosis
Perform Service
Friendly Close
Customer arrives for service.
(3 min)
Warm greeting and obtain service request.
(10 sec) F
Level #1
Notify customer the car is ready.
(3 min)
Customer departs
Customer pays bill.
(4 min) F
Perform required work.
(varies)
Prepare invoice. No
Notify customer and recommend an alternative provider.
(7min)
Standard request.
(3 min)
Determine specifics.
(5 min) No
Can service be done and does customer approve?
Yes F
Level #2
Direct customer to waiting room. F
Yes F
Level #3
Figure 7.8

18. Process Analysis Tools
Flowcharts provide a view of the big picture
Time-function mapping adds rigor and a time element
Value-stream analysis extends to customers and suppliers
Process charts show detail
Service blueprint focuses on customer interaction

19. Special Considerations for Service Process Design
Some interaction with customer is necessary, but this often affects performance adversely
The better these interactions are accommodated in the process design, the more efficient and effective the process
Find the right combination of cost and customer interaction

20. Service Process Matrix
Service Factory
Service Shop
Degree of Customization
Low
High
Degree of Labor
Mass Service
Professional Service
Commercial banking
Private banking
Digital orthodontics
Traditional orthodontics
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 7.9

21. Service Process Matrix
Mass Service and Professional Service
Labor involvement is high
Selection and training highly important
Focus on human resources
Personalized services

22. Service Process Matrix
Service Factory and Service Shop
Automation of standardized services
Low labor intensity responds well to process technology and scheduling
Tight control required to maintain standards

23. Equipment and Technology
Often complex decisions
Possible competitive advantage
Flexibility
Stable processes
May allow enlarging the scope of the processes

24. Production Technology
Machine technology
Automatic identification systems (AISs)
Process control
Vision system
Robot
Automated storage and retrieval systems (ASRSs)
Automated guided vehicles (AGVs)
Flexible manufacturing systems (FMSs)
Computer-integrated manufacturing (CIM)

25. Increased productivity Increased flexibility
Machine Technology
Increased precision
Increased productivity
Increased flexibility
Improved environmental impact
Reduced changeover time
Decreased size
Reduced power requirements

26. Automatic Identification Systems (AISs)
Improved data acquisition
Reduced data entry errors
Increased speed
Increased scope of process automation
Example – Bar codes and RFID

27. Real-time monitoring and control of processes
Process Control
Real-time monitoring and control of processes
Sensors collect data
Devices read data on periodic basis
Measurements translated into digital signals then sent to a computer
Computer programs analyze the data
Resulting output may take numerous forms

28. Particular aid to inspection Consistently accurate Never bored
Vision Systems
Particular aid to inspection
Consistently accurate
Never bored
Modest cost
Superior to individuals performing the same tasks

29. Perform monotonous or dangerous tasks
Robots
Perform monotonous or dangerous tasks
Perform tasks requiring significant strength or endurance
Generally enhanced consistency and accuracy

30. Automated Storage and Retrieval Systems (ASRSs)
Automated placement and withdrawal of parts and products
Reduced errors and labor
Particularly useful in inventory and test areas of manufacturing firms

31. Automated Guided Vehicle (AGVs)
Electronically guided and controlled carts
Used for movement of products and/or individuals

32. Flexible Manufacturing Systems (FMSs)
Computer controls both the workstation and the material handling equipment
Enhance flexibility and reduced waste
Can economically produce low volume at high quality
Reduced changeover time and increased utilization
Stringent communication requirement between components

33. Computer-Integrated Manufacturing (CIM)
Extension of flexible manufacturing systems
Backwards to engineering and inventory control
Forward into warehousing and shipping
Can also include financial and customer service areas
Reducing the distinction between low-volume/high-variety, and high-volume/low-variety production

34. Computer-Integrated Manufacturing (CIM)
Figure 7.10

35. Technology in Services
Service Industry
Example
Financial Services
Debit cards, electronic funds transfer, ATMs, Internet stock trading, on-line banking via cell phone
Education
Electronic bulletin boards, on-line journals, WebCT, Blackboard and smart phones
Utilities and government
Automated one-man garbage trucks, optical mail and bomb scanners, flood warning systems, meters allowing homeowners to control energy usage and costs
Restaurants and foods
Wireless orders from waiters to kitchen, robot butchering, transponders on cars that track sales at drive-throughs
Communications
Interactive TV, ebooks via Kindle 2
Table 7.4

36. Technology in Services
Service Industry
Example
Hotels
Electronic check-in/check-out, electronic key/lock system, mobile web booking
Wholesale/retail trade
ATM-like kiosks, point-of-sale (POS) terminals, e-commerce, electronic communication between store and supplier, bar coded data, RFID
Transportation
Automatic toll booths, satellite-directed navigation systems, WiFi in automobile
Health care
Online patient-monitoring, online medical information systems, robotic surgery
Airlines
Ticketless travel, scheduling, Internet purchases, boarding passes two-dimensional bar codes on smart phones
Table 7.4

37. Global Company Profile: Harley-Davidson Four Process Strategies
Summary
Global Company Profile: Harley-Davidson
Four Process Strategies
Process Focus
Repetitive Focus
Product Focus
Mass Customization Focus
Comparison of Process Choices

38. Process Analysis and Design
Summary
Process Analysis and Design
Flow Charts
Time-Function Mapping
Value-Stream Mapping
Process Charts
Service Blueprinting

39. Special Consideration for Service Process Design
Summary
Special Consideration for Service Process Design
Customer Interaction and Process Design
More Opportunities to Improve Service Processes
Selection of Equipment and Technology

40. Production Technology
Summary
Production Technology
Machine Technology
Automatic Identification Systems (AISs) and RFID
Process Control
Vision Systems
Robots