Operations

Management
Process Strategy

Process, Volume, and Variety

Volume
Low
Volume
High Variety
one or few
units per run,
high variety
(allows
customization)
Medium
Variety
(modest
runs)

Low Variety,
long runs only

Repetitive
Process

Process Focus
projects, job shops
(machine, carpentry)

High
Volume
Mass Customization
(difficult to achieve,
but huge rewards)
Previously Dell
Computers

Repetitive
(autos, motorcycles)
Maruti
Poor Strategy
(Both fixed and
variable costs
are high)

Product Focus
(commercial
baked goods,
steel, glass)

Process Focus
Facilities are organized around specific
activities or processes
General purpose equipment and skilled
personnel
High degree of product flexibility
Typically high costs and low equipment
utilization
Product flows may vary considerably
making planning and scheduling a
challenge

Process Focus

Many
inputs

Many departments and

many routings

Job Shop

Many
variety
of
outputs

Repetitive Focus
Facilities often organized as
assembly lines
Characterized by modules with parts
and assemblies made previously
Modules may be combined for many
output options
Less flexibility than processfocused facilities but more efficient

Repetitive Focus
Automobile Assembly Line

Modules
combined
for many
output
options

Raw
materials
and
module
inputs
Few
modules

Continous Production
Facilities are organized by product
High volume but low variety of
products
Long, continuous production runs
enable efficient processes
Typically high fixed cost but low
variable cost
Generally less skilled labor

Continous Production
Continuous Work Flow

Few
inputs

Output
variations
in size,
shape,
and
packaging

Continous Production
D

Continuous caster

A Steel Plant

B
Ladle of molten steel

Continuous cast steel

sheared into 24-ton slabs
Hot tunnel furnace - 300 ft

Hot mill for finishing, cooling, and coiling

H
I

Scrap
steel

Electric
furnace

Mass Customization
The rapid, low-cost production of
goods and service to satisfy
increasingly unique customer
desires
Combines the
flexibility of a
process focus
with the efficiency
of a product focus

Mass Customization
Item
Vehicle models
Vehicle types
Bicycle types
Software titles
Web sites
Movie releases
New book titles
Houston TV channels
Breakfast cereals
Items (SKUs) in
supermarkets
LCD TVs

Number of Choices
1970s
21st Century
140
286
18
1,212
8
19
0
400,000
0
98,116,993
267
458
40,530
77,446
5
185
160
340
14,000
150,000
0

200+

Process Analysis and Design

Flow Diagrams - Shows the movement
of materials
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

Process Flow Diagram

Frame tube
bending

Frame-building
work cells

Frame
machining

Hot-paint
frame painting

THE ASSEMBLY LINE

TESTING
28 tests

Roller testing

Incoming parts

Air cleaners

Oil tank work cell

Fluids and mufflers

Shocks and forks

Fuel tank work cell

Handlebars

Wheel work cell

Fender work cell

Engines and
transmissions
From Milwaukee
on a JIT arrival
schedule

Crating

Value-Stream Mapping

Process Chart

Figure 7.9

A Process Analysis Tool Fishbone Diagram

Figure 7.9

Process Redesign
The fundamental rethinking of business
processes to bring about dramatic
improvements in performance
Relies on reevaluating the purpose of the
process and questioning both the purpose
and the underlying assumptions
Requires reexamination of the basic
process and its objectives
Focuses on activities that cross
functional lines
Any process is a candidate for redesign