Operations Management Session 3 Process Strategy and Analysis

Transcription

1 Operations Management Session 3 Process Strategy and Analysis 2/9/2018

2 Opening remarks. One of the fist decisions a manager makes in designing well functioning process is to choose a process type that best achieves the competitive priorities for that process

3 Session 3 Leaning outcome Understand the key decisions to be considered when designing effective processes in operations. Understand the process structures in manufacturing and services. Explain the product-process matrix in manufacturing and customer contact matrix in services. Explain the major process strategy decisions and their implications for operations

4 Session 3 - Coverage 1. A Model for an effective process design 2. Different process types in manufacturing and services 3. Process analysis tools 4. Process Improvements and Reengineering methods

5 What is a Process? Is any part of an organization which takes a set of input resources which are then used to transform something into outputs of products or services.

6 What is process design? The process design is a conceptual exercise. The design is to conceive the looks, arrangement, and workings of something before it is created. It is important to understand the design objectives when the process design is done. The most common way of doing this is by positioning it according to its volume and variety characteristics

7 Selection of a process Selection of process in an strategic decision and it has a long term effect on operations decisions. The selection of effective process has an greater impact on the competitive advantages of the organization. Strategies for designing a process is different whether process is for product or service

8 Key concepts related to the designing of a process Process Structure: The process type relative to the type of resources needed, how resources are allocated and their key characteristics. Layout : The physical arrangement of operations Customer Involvement : The degree of involvement of customer in the process Resource Flexibility : How much the skills available in the organization can handle a wide variety of products, duties, and functions. Capacity Intensity: The mix of equipment and human skills in a process Process Analysis : The documentation and detailed understanding of how work is performed and how it can be redesigned.

9 Major decisions for effective process design Process Structure Product-process position (Manufacturing) Customer-contact position (Services) Customer Involvement Low involvement High Involvement Layout Design Capital intensity Low Automation High Automation Resource Flexibility Specialized Enlarged Strategies for Change Process Reengineering Process Improvement Effective Process Design

10 Major types of processing in operations Manufacturing process types Service process types 1. Project processes 1. Professional services 2. Jobbing processes 2. Service shop 3. Batch processes 3. Mass service 4. Mass processes 5. Continuous processes

11 Process types - the volume - variety effect on process design

12 Manufacturing Processes

13 low volume and high variety is one the characteristic of a project processes One-off, complex, large-scale products with high work content Specially made, every one customized Defined start and finish: time, quality and cost objectives Many different skills have to be coordinated 1. Project Processes

14 Deals with low volumes and very high variety. Specially made, low repetition, every one customized Skill requirements are usually very broad Skilled jobber, or team, completes whole product 2. Jobbing Processes

15 3. Batch processes Higher volumes and lower variety than for jobbing Standard products, repeating demand. But can make specials Specialized, narrower skills Set-ups (changeovers) at each stage of production

16 4. Mass (Assembly line) processes Higher volumes and narrow variety Standard, repeat products ( runners ) Low and/or narrow skills No set-ups, or almost instantaneous ones

17 5. Continuous processes Extremely high volumes and low variety: often single product Standard, repeat products ( runners ) Highly capital-intensive and automated Few changeovers required Difficult and expensive to start and stop the process

18 Product-Process Matrix Customization and Volume Focus Characteristics Low Volume, Products made to customer order Multiple products; Low to moderate volume Few Major products; High Volume High Volume, High Standardization products Divergence and Line flow Flexible and unique sequence of tasks Disconnected line flows, moderately repetitive work Connected line flows, highly repetitive work Continuous flows Project process Jobbing process Batch Process Assembly line Process Continuous Process 2-18

19 Services Processes

20 Classification of Services Low contact services High contact services

21 1. Professional services High variety with low volume High - customer contact service and customers spend a considerable time in the service process. Provides high levels of customization and, meets individual customer needs. A great deal of staff time is spent in the front office and contact staff are given considerable discretion in servicing customers. Professional services are people-based rather than equipment-based; emphasis is placed on the process (how the service is delivered) rather than the product (what is delivered). Professional services include management consultants, lawyers practices, architects, doctors surgeries, auditors, health and safety inspectors and some computer field service operations.

22 2. Service shops This process is characterized by levels of customer contact, customization, volumes of customers and staff discretion. Includes back and front office activities: For example, an equipment hire and sales organization may have a range of products displayed in front-office outlets, while backoffice operations look after purchasing and administration. Service shops include banks, high- street shops, holiday tour operators, car rental companies, schools, most restaurants, hotels and travel agents.

23 This process has low volume and high variety Many customer transactions 3. Mass services limited contact time and little customization. Services may be equipment- based and product -oriented, with most value added in the back office and relatively little judgment applied by front-office staff. Staff are likely to have a closely defined division of labour and to follow set procedures. Mass services include supermarkets, a national rail network, an airport, telecommunications services, libraries, television stations, the police service and the enquiry desk at a utility.

24 Mass services Mass services have many customer transactions limited contact time and little customization. Services may be equipment- based and product - oriented, with most value added in the back office and relatively little judgment applied by front-office staff. Staff are likely to have a closely defined division of labour and to follow set procedures. Mass services include supermarkets, a national rail network, an airport, telecommunications services, libraries, television stations, the police service and the enquiry desk at a utility.

25 Strategies for Process Change There are two different but complementary methods for process design and change 1. Process Improvements 2. Process Reengineering

26 Strategies for Process Change 1. Process Improvements The systematic study of the activities and flows of each process to improve it. Usually process improvement goes on, whether or not process is reengineered.

27 Strategies for Process Change 2. Process Reengineering The fundamental rethinking and radical redesign of processes to improve the performance in terms of cost, Speed, Flexibility, dependability and quality. Process Reengineering is about reinventing the processes rather than incremental improvements.

28 The impact of strategic performance objectives on process design objectives and performance.