Chap 004
Chap 004
to
Operations Management
Chapter 4, Process Selection
5e, Schroeder
McGraw-Hill/Irwin
Chapter Outline
Product-Flow Characteristics
Approaches to Order Fulfillment
Product-Process Strategy
Focused Operations
Mass Customization
Environmental Concerns
Cross-Functional Decision Making
4-2
Product-Flow Characteristics
Types of Product Flow
Continuous process
Assembly line
Batch
Job shop
Project
4-3
Product-Flow Characteristics
Continuous Process
Process industries (beer, paper, oil, etc.)
Highly standardized and automated
High volumes of production
Commodity products
Low cost is the order winner
Flexibility limited
4-4
Product-Flow Characteristics
Assembly Line Flow
Linear sequence of operations
Discrete products (autos, appliances, etc.)
High-volume, standardized products
Inflexibility in product and volume
Very efficient
Large capital investment
4-5
cut
drill
bend
paint
4-6
Product-Flow Characteristics
Batch Flow
Production of batches or lots
Batches flow from one work center to another
Low volume products
Many different types of products
Flow is jumbled and intermittent
Flexible labor and equipment
4-7
Batch Flow
(three metal brackets, see Fig. 4.2)
Bend
Paint
Cut
Batch A
Batch B
Batch C
Drill
Task or work station
Product flows
4-8
Product-Flow Characteristics
Job Shop
Production of small batches or lots
Orders are customized for particular customer
orders
Low volume products
Many different types of products
Flow is jumbled and intermittent
Flexible labor and equipment
4-9
Product-Flow Characteristics
Project
Production of customized single products
Labor and materials brought to site
Planning, scheduling challenges
Unique (one of a kind) products
Little automation
Flexible labor and equipment
4-10
4-11
Make-to-Stock (MTS)
Produce finished goods; customer buys
from inventory
Advantage: smooth production
Disadvantage: inventory
Key performance measures (next slide)
4-12
4-13
Make-to-Order (MTO)
Start production after customer orders
Advantage: no finished goods inventory
Disadvantage: intermittent production
Key performance measures
Lead time
Orders completed on time (or late)
Quality measures
4-14
Assemble-to-Order (ATO)
Produce parts and subassemblies; finish when
customer places order
Advantages: less inventory, faster service
Disadvantage: some WIP inventory
Key performance measures
Speed of service
Inventory levels
Quality of product and service
4-15
Make-to-Stock
Make-to-Order
Product
Producer-specified
Low variety
Inexpensive
Customer-specified
High variety
Expensive
Objectives
Balance inventory,
capacity, and service
Main operations
problems
Forecasting
Planning production
Control of invenntory
Delivery promises
Delivery time
4-16
customer
Production
Customer Order
Product
Product
Finished Goods
Inventory
4-17
customer
Customer Order
Product
Production
4-18
Assemble-to-Order
(Figure
4.3)
Forecast orders
customer
Production of
Subassemblies
Customer order
Product
Assembly of
the Order
Subassembly
Inventory
of Subassemblies
4-19
MTO
ATO
------------------
Supplier
Fabrication
MTS
Assembly
Distribution
4-20
Market conditions
Capital requirements
Availability and cost of labor
State of technology
4-21
(Table 4.3)
4-22
Product-Process Strategy
Strategy must consider not only the product or
service, but also how to produce it.
As many industries move through their
product life cycles, they also move through a
process life cycle, e.g., the traditional bread
bakery vs. the modern automated bakery.
4-23
4-24
4-25
Low volume,
Unique, one of Low volume,
Higher volume
Multiple
a kind
low
few major
products
product
standardization
products
Project
Building
NONE
Job Shop
Printing
Heavy
Equipment
Batch
Auto
assembly
Assembly
line
Continuous
NONE
Sugar
Refinery
4-26
Focused Operations
Company may have products or services with
different volumes and levels of standardization.
Mixing them in the same operation can cause
significant problems.
Focus involves separating different products or
services in the same facility into PWPs.
4-27
Types of Focus
Product focus
Process type
Technology
Volume of sales
Make-to-stock and make-to-order
New products and mature products
4-28
Mass Customization
A strategy to provide products in lot sizes of
one in high volume.
Possible because of flexible manufacturing.
Based on economies of scope instead of
economies of scale, i.e., a high variety of
products from a single process.
4-29
4-30
Environmental Concerns
Technologies for Pollution Prevention
Technologies for Pollution Control
Infrastructure Systems and Practices
Other concerns
Recycling outputs
Recycling inputs
Remanufacturing
4-31
4-32
Summary
Product-Flow Characteristics
Approaches to Order Fulfillment
Product-Process Strategy
Focused Operations
Mass Customization
Environmental Concerns
Cross-Functional Decision Making
4-33
4-34