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Outline
Process Planning Process Analysis Process Innovation Technology Decisions Capacity Decisions
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Process Planning
Process
Process design
tasks need to be done and coordinated among functions, people, and organizations
converts designs into workable instructions for manufacture or delivery an organizations overall approach for physically producing goods and services
Process planning
Process strategy
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Process Strategy
Capital intensity
mix of capital (i.e., equipment, automation) and labor resources used in production process
ease with which resources can be adjusted in response to changes in demand, technology, products or services, and resource availability extent to which firm will produce inputs and control outputs of each stage of production process
Process flexibility
Vertical integration
Customer involvement
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6-5
Sourcing Continuum
Source: Adapted from Robert Hayes, Gary Pisano, David Upton, and Steven Wheelwright, Operations Strategy and Technology: Pursuing the Competitive Edge (Hoboken, NJ: 2005), p. 120
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Process Selection
Projects
one-of-a-kind production of a product to customer order systems process many different jobs through the system in groups or batches produces large volumes of a standard product for a mass market used for very-high volume commodity products
Batch production
Mass production
Continuous production
6-7
Types of Processes
PROJECT
Type of product
BATCH
Made-toorder
(customized)
MASS
Made-tostock
(standardized )
CONT.
Unique
Commodity
Type of customer
One-at-atime
Mass market
Mass market
Product demand
Infrequent
Fluctuates
Stable
Very stable
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive Advantage (New York:McGraw-Hill, 2001), p. 210
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BATCH
Low to medium
MASS
CONT.
Very low
High
Very high
Infinite variety
Many, varied
Few
Very few
Long-term project
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive Advantage (New York:McGraw-Hill, 2001), p. 210
6-9
MASS
Specialpurpose
CONT.
Highly automated Mixing, treating, refining Equipment monitors
Equipment
Varied
Specialized contracts
Fabrication
Assembly
Experts, craftspersons
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive Advantage (New York:McGraw-Hill, 2001), p. 210
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BATCH
Flexibility, quality
MASS
Efficiency, speed, low cost
CONT.
Highly efficient, large capacity, ease of control Difficult to change, far-reaching errors, limited variety
Advantages
Disadvantages
Costly, slow, difficult to manage Machine shops, print shops, bakeries, education
Examples
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive Advantage (New York:McGraw-Hill, 2001), p. 210
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Fixed costs
Variable costs
Revenue
Total revenue
Profit
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cf v= p-c v
Solving for Break-Even Volume
Copyright 2006 John Wiley & Sons, Inc. 6-14
6-15
$2,000
$1,000
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Process Selection
Process A Process B $2,000 + $5v = $10,000 + $2v $3v = $8,000 v = 2,667 rafts
$20,000
$15,000
$10,000
$5,000
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Process Plans
Set of documents that detail manufacturing and service delivery specifications
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Process Analysis
Process flowcharts
6-20
Storage
Copyright 2006 John Wiley & Sons, Inc. 6-21
Location: Graves Mountain Process: Apple Sauce Description of process Unload apples from truck Move to inspection station Distance (feet) 100 ft 30 50 ft 360 20 ft 15 20 5 20 ft 30 480 190 ft
Step
3
4 5 6 7 8 9 10
11
Time (min)
20
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Customer
Waiter
Salad Chef
Dinner Chef
Place order
Is order complete?
Y
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Process Innovation
Continuous improvement refines the breakthrough
Breakthrough Improvement
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Order Fulfillment
Supply Chain Management Customer Service
Function
Process
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Process Innovation
Customer Requirements
Baseline Data Benchmark Data Innovative Ideas Design Principles Key Performance Measures
Model Validation
No
Goals Met?
Yes
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in trying to untangle fishing lines, its best to start from the fish, not the poles a previous solution to an old problem might work
Draw analogies
6-30
our workers were mobile and flexible there were no monetary constraints we had perfect knowledge
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Technology Decisions
Financial justification of technology
Purchase cost Operating Costs Annual Savings Revenue Enhancement Replacement Analysis Risk and Uncertainty Piecemeal Analysis
6-32
Components of e-Manufacturing
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A Technology Primer
Product Technology
Computer-aided design (CAD) Group technology (GT) Computer-aided engineering (CAE) Collaborative product commerce (CPC) Creates and communicates designs electronically Classifies designs into families for easy retrieval and modification Tests functionality of CAD designs electronically Facilitates electronic communication and exchange of information among designers and suppliers
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and quality data A collection of CNC machines connected by an automated material handling system to produce a wide variety of parts Manipulators that can be programmed to perform repetitive tasks; more consistent than workers but less flexible Fixed-path material handling; moves items along a belt or overhead chain; reads packages and diverts them to different directions; can be very fast
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A global information system of computer networks that facilitates communication and data transfer
Communication networks internal to an organization; can be password (i.e., firewall) protected sites on the Internet Intranets connected to the Internet for shared access with select suppliers, customers, and trading partners
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Extranet
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6-41
Capacity Decisions
Capacity
Capacity utilization
percent of available time spend working how well a machine or worker performs compared to a standard output level
Capacity efficiency
Capacity load
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volume and certainty of anticipated demand strategic objectives costs of expansion and operation % of capacity utilization that minimizes unit costs % of capacity held in reserve for unexpected occurrences
6-44
Capacity cushion