Operations

Management
Process Strategy and
Capacity Planning
Chapter 7
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Learning Objectives
When you complete this chapter, you should be
able to :
Identify or Define:

Process focus
Repetitive focus
Product focus
Process reengineering
Service process issues

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Fit of Process, Volume, and Variety

Low-Volume
(Intermittent)

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

Repetitive Process
(Modular)

Process focus
projects, job
shops,(machine,
print, carpentry)
Standard Register

Poor strategy

Mass
Customization
(difficult to
achieve, but huge
rewards)

Repetitive
(autos, motorcycles)
Harley Davidson

(Variable costs
are high)

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High-Volume
(Continuous)

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Dell Computer Co.

Product focus
(commercial baked
goods, steel, glass)
Nucor Steel

2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Production Process Flow Diagram

Customer
Customer sales
representative
take order

Purchasing
(order inks, paper,
other supplies)
Vendors

Prepress Department
(Prepare printing plates
and negatives)

Receiving

Accounting

Warehousing
(ink, paper, etc.)

Printing Department

Gluing, binding,
stapling, labeling

Collating
Department

Polywrap
Department

Information flow
Material flow

Shipping
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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-Focused

RepetitiveFocused

Product-Focused

Continuum
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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 A
Operation
Other names
1
2

Intermittent process
Job shop

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Product B
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Figure 7A

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Process-Focused Strategy Examples

Bank

Hospital

1995 Corel Corp.

1995
Corel
Corp.

Machine
Shop
1995 Corel Corp.

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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%)

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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

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Figure 7B

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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, highvariety model
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Repetitive-Focused Strategy Examples

Fast
Food

Clothes
Dryer
McDonalds
over 95 billion served

Truck
1995 Corel Corp.

1984-1994 T/Maker Co.

1995 Corel Corp.

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Figure 7.3

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Product-Focused Strategy
Facilities are organized by product
High volume, low variety products
Where found

Discrete unit manufacturing

Continuous process manufacturing

Products A & B

Other names

Line flow production

Continuous production

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Operation
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Figure 7C

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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

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Product-Focused Examples
Soft Drinks
(Continuous,
then Discrete)
Light Bulbs
(Discrete)
1995 Corel
Corp.

Mass
Flu Shots
(Discrete)

1984-1994 T/Maker Co.

Paper (Continuous)

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1995 Corel Corp.

1995 Corel Corp.

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Figure 7.4

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Table 7.1
Process Focus Repetitive Focus Product Focus
1. Product: Small
quantity, large
variety
2. Equipment:
General purpose

1. Product: Long runs,

usually standardized
2. Equipment: Special;
assembly line

1. Product: Large
quantities, small
variety
2. Equipment:
Special-purpose

3. Operators broadly
skilled

3. Employees modestly
trained

3. Operators less
broadly skilled

4. Many job
instructions

4. Repetitive operations

4. Few work orders and

job instructions;
standardization

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Process Continuum
Process Focused
(intermittent process)

Repetitive
Focus
(assembly line)

Product Focused
(continuous process)

Continuum
High variety, low volume
Modular
Low utilization (5% - 25%) Flexible equipment
General-purpose equipment

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Low variety, high volume

High utilization (70% - 90%)
Specialized equipment

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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.
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Mass Customization - More

Choices Than Ever
Item

Early
1970s

Vehicle models
Vehicle styles
Bicycle types
Software titles
Web sites
Movie releases
New book titles
Houston TV channels
Breakfast cereals
Items in supermartkets
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140
18
8
0
0
267
40,530
5
160
14,000
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Late
1990s
260
1,212
19
380,000
9,865,982
458
77,446
851
340
20,000

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Questions for Process Analysis

and Design
Is the 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 the customer?
Will the process win orders?
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Tools for Process Design

Flow Diagrams
Process Charts
Time-Function/Process Mapping
Service Blueprinting

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Time Function Map

Warehouse

WIP

Plant B

Wait

Transport

Wait

Wait

Extrude

Product

Print
WIP

Plant A

Product

Wait
Order

Production
control

Product

Process
Order

WIP

Sales

Receive
product

WIP

Order
Product

Order

Customer

Move
12 days

13 days

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1 day

4 days

1 day

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Move
10 days

1 day

9 days

1 day

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Process Chart Example

SUBJECT: Request tool purchase
Dist (ft)

Time (min)

Symbol

Description

D Write order
w On desk
D To buyer

75

D Examine
= Operation; = Transport; = Inspect;
D = Delay; = Storage
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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
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