Operations Management Ch. 7

Process Strategy
organization’s approach to transforming resources into goods and services.
Objective: create a process that can produce products that meets the customer requirements within cost and other managerial constrains.
1. process focus 2. repetitive focus 3. product focus 4. mass production
Process Focus
production facility organized around processes to facilitate low volume high variety production low. product flexibility as products move between the specialized process. Intermittent Processes. high variable costs, with extremely low utilization of facilities. (hospitals, restaurants, machine shops). many inputs many outputs
Repetitive Focus
use modules (parts or components previously prepared (often in a product focused process). assembly line. more structure/less flexibility than process focused. cars, fast food.
Product Focus
high volume, low variety. facilities organized around products. very long continuous production runs. paper, beer, potato chips. set standards and maintain given quality. high fixed cost low variable costs, high facility utilization
Mass Customization Focus
rapid low cost production that caters to constantly changing unique customer desires. making what the customer wants when the customer wants it. high variety high volume
Crossover Charts
a chart of costs at the possible volumes for more than one process. Different processes can be expected to have different costs. at any given volume only one will have the lowest cost. To find a crossover point set the fixed plus variable costX equal for two and solve for X.
Process Analysis and Design
is process designed to achieve competitive advantage in terms of differentiation, response, or low cost? does the process eliminate steps that do not add value? does the process maximize customer value as perceived by customer? will process win orders?
Flow Chart
schematic or drawing of the movement of material products or people.
Time-Function Mapping
a flowchart with time added on the horizontal axis. nodes indicate activities and arrows indicate flow of direction with time. allows users to identity and eliminate waste such as extra steps duplication and delay. percent change new-old/old. idea is to start with the customer and understand the production process
Value Stream Mapping
Value Stream Mapping
a process that helps managers understand how to add value in the flow of material and information through the entire production process. looks at where value is added and where it is not in the entire process including the supply chain. start with customer understand production process and analyze all the way back to suppliers. process and management decisions and info systems
Process Charts
use symbols to analyze the movement of people or material. use symbols, time, and distance to provide an objective and structured way to analyze and record the activities that make up a process. focus on value added activities
Service Blueprinting
Service Blueprinting
process analysis technique that lends itself to a focus on the customer and the provider’s interaction with the customer. three levels of interaction customer, interaction with provider, service provider (each level has different management issues), ID potential failure points. Special considerations: some interaction with customer is necessary but often affects performance adversely. better the interactions more efficient and effective process.
Improving Service Productivity
separation- structuring service so customers must go where service is offered (bank go to manager to get new account)
self service- customers examine, compare, and evaluate at their own pace (supermarkets, websites)
postponement- customizing at delivery (customizing vans at delivery rather than production
focus- restricting the offerings (limited menu @ restaurant)
modules- modular selection or production (investment and insurance selection)
automation- separating services that may lend themselves to some type of automation (automatic teller machines)
scheduling- precise personell scheduling (ticket counter personnel at 15 minute intervals at airlines)
training- clarifying the service options, explaining how to avoid problems (after sale maintenance personnel)
Technology in Services
financial service- debit cards, eft, atms
education- blackboard, smart phones
utilities and government- automated one man garbage trucks, flood warning systems.
restaurants and foods- wireless orders from waiters to kitchen
communications- interactive tv, ebooks
hotels- electronic checkin/out, electronic keys and locks
wholesale retail- point of sale terminals, commerce, bar code data
transportation- automatic toll booth, satellite directed navigation systems
health care- online patient monitoring systems, robotic surgery
airlines- ticketless travel, boarding passes downloaded as 2d barcodes on smart phones
resources- operations is primary user of resources, reducing use is win win
recycling- burn, bury, or reuse waste, recycling begins at design
regulations- laws affect transportation, waste, and noise, increasing regulatory pressure
reputation- leadership may be rewarded, bad reputation can have negative consequences