Process Strategy

Four Process Strategies

• Process Focus
 Repetitive Focus
 Product Focus
 Mass Customization Focus
Process Strategies
 Involve determining how to produce a product
or provide a service
 Objective
 Meet or exceed customer requirements
 Meet cost & managerial goals
 Has long-run effects
 Product & volume flexibility
 Costs & quality
 Fit of Process, Volume, and Variety
Low-Volume Repetitive High-Volume
(Intermittent) Process (Continuous)
(Modular)

Process focus Mass

High Variety projects, job Customizatio
One or few n
units per run,
shops,
(machine, (difficult to
high variety achieve, but
(allows print, huge
Changes in rewards)
customization)
modules carpentry) Repetitive
Modest runs, Standard (autos, motorcycles) Dell
Computer
standardized Register Harley Davidson Co.
Changes
modules in Poor Product focus
attributes strategy (commercial
(such as grade,
quality, size, (Variable baked goods,
thickness, etc.) costs are steel, glass)
Long runs only high) Nucor Steel
 Types of Process Strategies
 Process strategies that follow a continuum
 Within a given facility, several strategies may be
used
 These strategies are often classified as:

Process- Repetitive- Product-

Focused Focused Focused

Continuu
m
Process-Focused Strategy
 Facilities are organized by process
 Similar processes are together
 Example: All drill presses are together
 Low volume, high variety products
 ‘Jumbled’ flow
Product
 Other names Operati A
 Intermittent process on 11 22 33
 Job shop
Product
B
Process-Focused Strategy Examples

Bank
© 1995

Hospital
Corel
Corp.

Machin
© 1995 Corel Corp. e Shop
© 1995 Corel Corp.
Process Focused Strategy -
Pros & Cons
 Advantages
 Greater product flexibility
 More general purpose equipment
 Lower initial capital investment
 Disadvantages
 More highly trained personnel
 More difficult production planning & control
 Low equipment utilization (5% to 25%)
Product-Focused Strategy
 Facilities are organized by product
 High volume, low variety products
 Where found
 Discrete unit manufacturing
 Continuous process manufacturing

 Other names Products A &

 Line flow production B
 Continuous production
11 22 33
Operatio
n
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
Product-Focused Examples
Soft Drinks
(Continuou
s, then
Discrete) Light Bulbs
(Discrete)
© 1995 © 1995 Corel Corp.
Corel Corp.

Mass
Flu Shots
© 1984-1994 T/Maker Co.
(Discrete)
Paper © 1995 Corel Corp.
(Continuous)
Repetitive Focused Strategy
 Facilities often organized by assembly lines
 Characterized by modules
 Parts & assemblies made previously
 Modules combined for many output options
 Other names
 Assembly line
 Production line
Repetitive Focused Strategy -
Considerations
 More structured than process-focused, less
structured than product focused
 Enables quasi-customization
 Using modules, it enjoys economic
advantage of continuous process, and
custom advantage of low-volume, high-
variety model
Repetitive-Focused Strategy -
Examples
Fast
Clothes
Foo
Dryer
d
McDonald’s
McDonald’s
over 95 billion served
over 95 billion served

Truck
© 1995 Corel Corp.

© 1984-1994 T/Maker Co.

© 1995 Corel Corp.

 Differences
Process Focus
Repetitive Focus
Product Focus
1. Product: Small
1. Product: Long runs,
1. Product: Large
quantity, large usually standardized
quantities, small
variety variety
2. Equipment: 2. Equipment: Special;
2. Equipment:
General purpose assembly line Special-purpose
3. Operators broadly
3. Employees modestly
3. Operators less
skilled trained broadly skilled
4. Many job 4. Repetitive operations
4. Few work orders and
instructions job instructions;
standardization
Process Focus
Repetitive Focus
Product Focus
5. Raw material 5. Just-in-time 5. Raw material
inventory value high
procurement inventory value low
relative to product compared to product
value value
6. Work-in-process6. Just-in-time 6. Work-in-process
inventory high inventory inventory low
relative to output compared to output
7. Units move slowly
7. Movement 7. Swift movement
through plant measured in hoursof and
units through
days facility
8. Make to order8. Make to forecast
8. Make to forecast;
inventory
Process Focus
Repetitive Focus
Product Focus
9. Scheduling 9. Scheduling based 9. Scheduling
on simple;
complex; trade-offmodels establishing a rate of
between inventory output sufficient to
availability, capacity, meet sales forecasts
and customer service
10. High fixed costs,
10. Fixed costs 10. High fixed costs,
low variable costsdependent upon low variable costs
flexibility of facility
11. Cost, estimated11. Costs usually 11. Costs highly
prior to job;known known because of dependent upon
only after experience utilization of capacity
completion
 Process Continuum

Process Focused Repetitive Product

(intermittent process) Focus Focused
(assembly (continuous
line) process)

Continuum

igh variety, low volumeModular Low variety, high volume

ow utilization (5% - 25%)Flexible High utilization (70% - 90%
neral-purpose equipmentequipment Specialized equipment
Mass Customization
 Using technology and imagination to rapidly
mass-produce products that cater to sundry
unique customer desires.
 Under mass customization the three process
models become so flexible that distinctions
between them blur, making variety and
volume issues less significant.
 Repetitive Focus
Assembly line
Modular Design
Flexible
equipment
Modular
technique
Masss
Customization
Scheduling Rapid
techniques throughput
Process focus Product focus
Intermittent Continuous
process Process
High variety, low Low variety, high
volume volume
Low utilization (5%- High utilization
25%) general (70%-90%)
purpose equipment Specialized
equipment
Tools for Process Design
 Flow Diagrams
 Process Charts
 Time-Function/Process Mapping
 Work Flow Analysis
Time Function Map

Order Recei
Customer Produ ve
ct produ
Proce ct
Sales ss
Order
Order

Producti Wait
on
control
Order

Product
Plant A Print
WIP

Product
Warehouse Wait Wait Wait

Product
WIP
Plant B Extru
WIP
WIP

de

Transport Move Move

12 days 13 days 1 day 4 days 1 day 10 days 1 day 9 days 1 day

Process Chart Example

SUBJECT: Request tool purchase

Dist (ft) Time (min) Symbol Description
 D ∇ Write order
 ◗∇ On desk
75 ➨ D ∇ To buyer
 D ∇ Examine
 = Operation;  = Transport;  =
Inspect;
D = Delay; ∇ = Storage
Work Flow Analysis - Four Phases
 Request from a customer or an offer to provide services
by a performer
 Negotiation, allowing the customer and the performer to
agree on how the work should be done and what will
constitute customer satisfaction
 Performance of the assignment and completion
 Acceptance, closing the transaction provided the
customer expresses satisfaction and agrees that the
conditions were met.
Process Reengineering
 The fundamental rethinking and radical
redesign 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 boundaries
Techniques for Improving Service Productivity
Strategy Technique
 Separation
 Structure service so customers
must go where service is
offered
 Self-service
 Self-service so customers
examine, compare and
 Postponement evaluate at their own pace
 Focus  Customizing at delivery
 Restricting the offerings
Techniques for Improving Service Productivity
- continued

 Modules  Modular selection of service.

Modular production
 Automation  Separating services that lend
themselves to automation
 Scheduling
 Precise personnel scheduling
 Clarifying the service options
 Training
 Explaining problems
 Improving employee flexibility
 Factors Affecting Process Alternatives
 Production flexibility These
These factors
factors
 Product volume reduce
reduce the
the
 Product variety number
number ofof
 Technology alternatives!
alternatives!
 Cost
 Human resources
 Quality
 Reliability

© 1984-1994 T/Maker Co.

 Thank You