Process Strategy Chapter 3

Transcription

1 Process Strategy Chapter

2 What is Process Strategy? Process Strategy The pattern of decisions made in managing processes, so that the processes will achieve their competitive priorities

3 Supply Chain Processes Process Description Process Description Outsourcing Customer Service Warehousing Logistics Sourcing Cross-Docking 03-03

4 Business Function Processes 03-04

5 Process Strategy Decisions 03-05

6 Customer Contact in Services DIMENSIONS OF CUSTOMER CONTACT IN SERVICE PROCESSES Dimension High Contact Low Contact Physical presence Present Absent What is processed People Possessions or information Contact intensity Active, visible Passive, out of sight Personal attention Personal Impersonal Method of delivery Face-to-face Regular mail or

7 Process Structure in Services Customer Contact Customization Process Divergence Flexible Flow 03-07

8 Service Customer-Contact Matrix 03-08

9 Process Structure in Manufacturing Job Process Batch Small or Large Line Continuous Flow 03-09

10 Process Structure in Manufacturing 03-10

11 Production and Inventory Strategies Make-to-Order Assemble-to-Order Postponement Mass Customization Make-to-Stock Mass Production 03-11

12 Layout Layout - The physical arrangement of human and capital resources Operation - A group of resources performing all or part of one or more processes Layout involves three basic steps 1. Gather information 2. Develop a block plan 3. Design a detailed layout 03-12

13 Layout Gather information on: Space requirements Available space Closeness Factors 03-13

14 Layout Develop a Block Plan 03-14

15 Layout Use a Closeness Matrix 03-15

16 Layout Euclidian distance is the straight-line distance between two possible points d AB = x 2 + ya yb ( ) ( ) 2 A x B where d AB = distance between points A and B x A = x-coordinate of point A y A = y-coordinate of point A x B = x-coordinate of point B y B = y-coordinate of point B 03-16

17 Layout Rectilinear distance measures the distance between two possible points with a series of 90-degree turns d AB = x A x B + y A y B 03-17

18 Application 3.1 What is the distance between (20,10) and (80,60)? Euclidian Distance d AB = (20 80) 2 + (10 60) 2 = 78.1 Rectilinear Distance d AB = =

19 Example 3.1 Develop an acceptable block plan for the Office of Budget Management that locates departments with the greatest interaction as close to each other as possible

20 Example 3.1 How much better is the proposed block than the current block plan? The following table lists pairs of departments that have a nonzero closeness factor and the rectilinear distances between departments for both the current plan and the proposed plan Current Block Plan Proposed Block Plan 03-20

21 Example 3.1 Department Pair Closeness Factor (w) 1, 2 3 1, 3 6 1, 4 5 1, 5 6 1, , 3 8 2, 4 1 2, 5 1 3, 4 3 3, 5 9 4, 5 2 5, 6 1 Distance (d) Current Plan Weighted-Distance Score (wd) Distance (d) Proposed Plan Weighted-Distance Score (wd) 03-21

22 Example 3.1 Department Pair Closeness Factor (w) 1, 2 3 1, 3 6 1, 4 5 1, 5 6 1, , 3 8 2, 4 1 2, 5 1 3, 4 3 3, 5 9 4, 5 2 5, 6 1 Distance (d) Current Plan Weighted-Distance Score (wd) Total 112 Distance (d) Proposed Plan Weighted-Distance Score (wd) Total

23 Example 3.1 Excel Solver evaluation of solution 03-23

24 Application 3.2 Matthews and Novak Design Company has been asked to design the layout for a newly constructed office building of one of its clients. The closeness matrix showing the daily trips between its six department offices is given below. Departments Trips between Departments

25 Application 3.2 Shown on the right is a block plan that has been suggested for the building (original plan). Assume rectilinear distance and complete the highlighted cells. Department Pair Closeness Factor Distance Score , , , , , , , , Total

26 Application 3.2 Department Pair Closeness Factor Distance Score , , , , , , , , Total 1030 Based on the above results, propose a better plan and evaluate it in terms of the load-distance score

27 Application 3.2 Department Pair Closeness Factor Distance Score , , , , , , , , 5 25 Total 03-27

28 Application 3.2 Department Pair Closeness Factor Distance Score , , , , , , , , Total

29 Customer Involvement Possible Disadvantages Can be disruptive Managing timing and volume can be challenging Quality measurement can be difficult Requires interpersonal skills Layouts may have to be revised Multiple locations may be necessary 03-29

30 Customer Involvement Possible Advantages Increased net value to the customer Can mean better quality, faster delivery, greater flexibility, and lower cost May reduce product, shipping, and inventory costs May help coordinate across the supply chain Processes may be revised to accommodate the customers role 03-30

31 Resource Flexibility Workforce Flexible workforce Equipment General-purpose Special-purpose 03-31

32 Application 3.3 BBC is deciding whether to weld bicycle frames manually or to purchase a welding robot. If welded manually, investment costs for equipment are only $10,000. The per-unit cost of manually welding a bicycle frame is $50.00 per frame. On the other hand, a robot capable of performing the same work costs $400,000. Robot operating costs including support labor are $20.00 per frame. Welded manually (Make) Welded by robot (Buy) Fixed costs $10,000 $400,000 Variable costs $50 $20 At what volume would BBC be indifferent to these alternative methods? F m F b $10,000 $400,000 Q = c b c = = 13,000 frames m $20 $

33 Capital Intensity Automation in Manufacturing Flexible Automation Fixed Automation in Services 03-33

34 Decision Patterns for Service Processes 03-34

35 Link of Competitive Priorities to Manufacturing Strategies 03-35

36 Decision Patterns for Manufacturing Processes 03-36

37 Process Reengineering Critical processes Strong leadership Cross-functional teams Information technology Clean-slate philosophy Process analysis 03-37

38 Solved Problem 1 A defense contractor is evaluating its machine shop s current layout. The figure below shows the current layout and the table shows the closeness matrix for the facility measured as the number of trips per day between department pairs. Safety and health regulations require departments E and F to remain at their current locations. a. Use trial and error to find a better layout b. How much better is your layout than the current layout in terms of the wd score? Use rectilinear distance. Trips Between Departments Department A B C D E F A B 3 C 8 9 D 3 E 3 F E A B C F D

39 Solved Problem 1 a. In addition to keeping departments E and F at their current locations, a good plan would locate the following department pairs close to each other: A and E, C and F, A and B, and C and E. The below figure was worked out by trial and error and satisfies all these requirements. Start by placing E and F at their current locations. Then, because C must be as close as possible to both E and F, put C between them. Place A below E, and B next to A. All of the heavy traffic concerns have now been accommodated. Trips Between Departments Department A B C D E F A B 3 C 8 9 D 3 E 3 F E A C B Copyright 2013 Pearson Education, Inc. publishing as F D

40 Solved Problem 1 b. The table reveals that the wd score drops from 92 for the current plan to 67 for the revised plan, a 27 percent reduction. Department Pair Number of Trips (1) Distance (2) Current Plan wd Score (1) (2) Distance (3) Proposed Plan wd Score (1) (3) A, B A, C A, E A, F B, D C, E C, F D, F E, F wd = 92 wd =