Operations Management Chapter – Process Strategy PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 7e Operations Management, 9e © 2008 Prentice Hall, Inc 7–1 Outline  Global Company Profile: Dell Computer Corp  Four Process Strategies  Process Focus  Repetitive Focus  Product Focus  Mass Customization Focus  Comparison of Process Choices © 2008 Prentice Hall, Inc 7–2 Outline – Continued  Process Analysis and Design  Flow Diagrams  Time-Function Mapping  Value-Stream Mapping  Process Charts  Service Blueprinting © 2008 Prentice Hall, Inc 7–3 Outline – Continued  Service Process Design  Customer Interaction and Process Design  More Opportunities to Improve Service Processes  Selection of Equipment and Technology © 2008 Prentice Hall, Inc 7–4 Outline – Continued  Production Technology  Machine Technology  Automatic Identification Systems (AISs) and RFID  Process Control  Vision Systems  Robots © 2008 Prentice Hall, Inc 7–5 Outline – Continued  Production Technology (cont.)  Automated Storage and Retrieval Systems (ASRSs)  Automated Guided Vehicles (AGVs)  Flexible Manufacturing Systems (FMSs)  Computer-Integrated Manufacturing (CIM) © 2008 Prentice Hall, Inc 7–6 Outline – Continued  Technology in Services  Process Redesign  Ethics and Environmentally Friendly Processes © 2008 Prentice Hall, Inc 7–7 Learning Objectives When you complete this chapter you should be able to: Describe four production processes Compute crossover points for different processes Use the tools of process analysis Describe customer interaction in process design Identify recent advances in production technology © 2008 Prentice Hall, Inc 7–8 Dell Computer Company Mass customization provides a competitive advantage  Sell custom-built PCs directly to consumer  Lean production processes and good product design allow responsiveness  Integrate the Web into every aspect of its business  Focus research on software designed to make installation and configuration of its PCs fast and simple © 2008 Prentice Hall, Inc 7–9 Process, Volume, and Variety Volume Repetitive Process Figure 7.1 Low Volume High Variety one or few units per run, high variety (allows customization) Changes in Modules modest runs, standardized modules Changes in Attributes (such as grade, quality, size, thickness, etc.) long runs only © 2008 Prentice Hall, Inc Process Focus projects, job shops (machine, print, carpentry) Standard Register High Volume Mass Customization (difficult to achieve, but huge rewards) Dell Computer Repetitive (autos, motorcycles) Harley-Davidson Poor Strategy (Both fixed and variable costs are high) Product Focus (commercial baked goods, steel, glass) Nucor Steel – 10 Machine Technology  Increased precision  Increased productivity  Increased flexibility  Improved environmental impact  Reduced changeover time  Decreased size  Reduced power requirements © 2008 Prentice Hall, Inc – 50 Automatic Identification Systems (AISs)  Improved data acquisition  Reduced data entry errors  Increased speed  Increased scope of process automation Example – Bar codes and RFID © 2008 Prentice Hall, Inc – 51 Process Control  Increased process stability  Increased process precision  Real-time provision of information for process evaluation  Data available in many forms © 2008 Prentice Hall, Inc – 52 Process Control Software © 2008 Prentice Hall, Inc – 53 Vision Systems  Particular aid to inspection  Consistently accurate  Never bored  Modest cost  Superior to individuals performing the same tasks © 2008 Prentice Hall, Inc – 54 Robots  Perform monotonous or dangerous tasks  Perform tasks requiring significant strength or endurance  Generally enhanced consistency and accuracy © 2008 Prentice Hall, Inc – 55 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 © 2008 Prentice Hall, Inc – 56 Automated Guided Vehicle (AGVs)  Electronically guided and controlled carts  Used for movement of products and/or individuals © 2008 Prentice Hall, Inc – 57 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 © 2008 Prentice Hall, Inc – 58 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 lowvolume/high-variety, and highvolume/low-variety production © 2008 Prentice Hall, Inc – 59 ComputerIntegrated Manufacturing (CIM) Figure 7.12 © 2008 Prentice Hall, Inc – 60 Technology in Services Service Industry Example Financial Services Debit cards, electronic funds transfer, ATMs, Internet stock trading Education Electronic bulletin boards, on-line journals, WebCT and Blackboard Utilities and government Automated one-man garbage trucks, optical mail and bomb scanners, flood warning systems Restaurants and foods Wireless orders from waiters to kitchen, robot butchering, transponders on cars that track sales at drive-throughs Communications Electronic publishing, interactive TV © 2008 Prentice Hall, Inc Table 7.4 – 61 Technology in Services Service Industry Example Hotels Electronic check-in/check-out, electronic key/lock system Wholesale/retail trade ATM-like kiosks, point-of-sale (POS) terminals, e-commerce, electronic communication between store and supplier, bar coded data Transportation Automatic toll booths, satellite-directed navigation systems Health care Online patient-monitoring, online medical information systems, robotic surgery Airlines Ticketless travel, scheduling, Internet purchases © 2008 Prentice Hall, Inc Table 7.4 – 62 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 © 2008 Prentice Hall, Inc – 63 Ethics and Environmentally Friendly Processes Reduce the negative impact on the environment  Encourage recycling  Efficient use of resources  Reduction of waste by-products  Use less harmful ingredients  Use less energy © 2008 Prentice Hall, Inc – 64 ... Environmentally Friendly Processes © 2008 Prentice Hall, Inc 7–7 Learning Objectives When you complete this chapter you should be able to: Describe four production processes Compute crossover points for different