Professional Documents
Culture Documents
Management
Process Strategy
Chapter 7
7-1
Outline
♦ Four Process Strategies.
♦ Process Focus.
♦ Repetitive Focus.
♦ Product Focus.
♦ Mass Customization Focus.
♦ Service Process Design.
♦ Process Reengineering.
7-2
Process Strategy
♦ How to produce a product or
provide a service.
♦ Objective:
♦ Meet or exceed customer
requirements.
♦ Achieve competitive advantage.
♦ Has long-run effects:
♦ Product & volume flexibility.
♦ Costs & quality .
7-3
Four Process
Strategies
♦ Four process strategies:
♦ 1. Process focused.
♦ 2. Product focused.
♦ 3. Repetitive focused.
♦ 4. Mass customization.
♦ Summary: Table 7-2.
♦ Several strategies may be used
within one facility.
♦ Process strategies follow a
7-4
continuum.
Fit of Process, Volume,
and Variety
Low Volume High Volume
Bank
Hospital
Machin
e Shop
7-6
Process Focus
♦ Facilities organized by
process.
♦ Similar processes or equipment
grouped together. (Example: All
drill presses are together.)
♦ Low volume, high variety
products.
♦ 1
75% of all global products. 2
♦ Products follow many
different paths. 3 4
7-8
2. Product Focus
Examples
Soft Drinks
(Continuou
s, then
Discrete)
Light Bulbs
(Discrete)
.
Paper
(Continuous)
7-9
Product Focus
♦ Facilities organized by
product.
♦ High volume, low variety
products.
♦ Long, continuous production
runs. names:
♦ Other
♦ Discrete
♦ Line flowunit manufacturing.
11 22 33 44
♦ Continuous process manufacturing.
production.
♦ Continuous
production. 7-10
Product Focus: Steel
Plant
7-11
Product Focus - 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.
♦ Higher capital investment.
7-12
3. Repetitive Focus -
Examples
Fast
Clothe
Foo
s Dryer
d
McDonald’s
McDonald’s
over 95 billion served
over 95 billion served
Truck
7-13
Repetitive Focus
7-14
Repetitive Focus - Harley
Davidson
7-15
Repetitive Focus -
Considerations
♦ More structured than process
focus, less structured than product
focus.
♦ Enables quasi-customization.
♦ Has advantages and disadvantages
of process focus and product focus.
7-16
Process Continuum
Continuum
7-17
Increasing Product
Variety
Early Early
Item
1970s 2000s
Vehicle models 140 260
Vehicle styles 18 1,212
Software titles 0 300,000
Web sites 0>30,000,000
Movie releases 267 458
New book titles 40,530 77,446
TV channels 5 >300
Breakfast cereals 160 340
Itemssupermarkets
in 14,000 150,000
7-18
4. Mass Customization
♦ Rapid, low-cost production to
fulfill unique customer desires.
7-19
Mass Customization at
Dell Computer
Company
♦ Sells custom-built PCs directly to consumer.
♦ Builds computers rapidly, at low cost, and only
when ordered.
♦ Operates with six days inventory.
♦ Integrates the Web into every aspect of business.
♦ Research focus on software to make installation
and configuration of PCs fast and simple.
7-20
Process Analysis and
Design
♦Process should:
♦ Be designed to achieve competitive
advantage:
♦ Differentiation.
♦ Response.
♦ Low cost.
♦ Eliminate steps that do not add value.
♦ Maximize value, as perceived by the
customer.
7-21
Tools for Process
Design
♦ Time-Function/Process Mapping -
Figure 7.7
Service
Commercial Personal Service
Banking banking
General
purpose law
firms
Boutiques
Retailing
7-24
Improving Service
Productivity -
Table 7.3
♦ Separation: Different services in different places.
♦ Self-service: Customers serve themselves.
♦ Postponement: Customize at delivery.
♦ Focus: Restrict offerings.
♦ Automation: Automate where appropriate.
♦ Scheduling: Precise personnel scheduling.
7-25
Technology -
Automation
♦ Production.
♦ CNC (Computer Numerical Control), Robots
and FMS (Flexible Manufacturing Systems).
♦ Automatic Identification.
♦ Bar coding and RFID (Radio Frequency
IDentification).
♦ Warehousing.
♦ ASRS (Automated Storage and Retrieval) and
AGVs (Automated Guided Vehicles).
♦ Integration – CIM (computer integrated
manufacturing)
7-26
Process Reengineering
♦ Fundamental rethinking and radical
redesign of business processes.
♦ To produce dramatic improvements in
performance.
7-27