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Ch 7 - Process Strategy

1. Four Process Strategies
   1. Intermittent Process (process focused, p256)
      1. Def - a process characterized by many small runs (batches) of a large variety of different products. (Low-volume, High-variety)
      2. Examples - typical job shop - general practice law firm, gourmet restaurant, retail bakery, machine shop, Standard Register printer (p257).
   2. Continuous Process (product focused, p259)
      1. Def - a process characterized by large runs of a small assortment of similar products. (High-volume, Low-variety)
      2. Examples - mass production of glass, light bulbs, Nucor Steel (p259).
   3. Repetitive Process (p258)
      1. Def - a process characterized by the use of modules previously produced.
      2. Examples - typical assembly line for cars, household appliances, Harley-Davidson, (p258).
   4. Mass Customization Process (p260)
      1. Def - a process characterized by powerful scheduling and rapid throughput, leveraged with a computer network and/or the Internet. (High-volume, High-variety)
      2. Examples - Dell Computer (p254), Borders Books (p261), Smooth FM (p261).

   Note: Production processes occur on a 2-dimentional continuum with intermittent, continuous, and mass customization at the extremes and repetitive in between intermittent and continuous (see Fig 7.1, p256).

2. Discussion Item (be prepared to discuss during class):
   1. Identify a service that you will produce or manage within the next 5 years.
   2. Explain which of the above 4 processes would be most appropriate for its production.
   3. How could you increase its mass customization?

3. *Comparison of Processes          Table 7.2, p263

   	Type of Process
   Characteristic	Intermittent	Repetitive	Continuous	Mass customization
   Equipment	general purpose	in between	special purpose	includes a computer network
   Operators’ training	high	moderate	low	moderate
   Work orders	numerous	moderate	few	numerous
   Inventories	high	moderate	low	low
   Materials handling	carts, wagons	conveyors	pipes	conveyors
   Finished goods	made to order &  not stored	in between	made to forecast & stored	made to order &  not stored
   Fixed costs	low	moderate	high	high
   Variable costs	high	moderate	low	low

4. Process Analysis  (p266)
   1. Def - Process Analysis - the systematic analysis of a process to improve its efficiency and effectiveness.
   2. *Process Chart - a document that uses standardized symbols to analyze the activities involved in a process:
          O     - operation,                (see Fig 7.9, p268)
          →    - transport  (if character does not print, arrow),
           ■      - inspection,  (square)
          D       - delay,
         ▼     - storage  (triangle).
                          Do Assigned HW
       
5. Service Process Design  (p270)
   1. Techniques for improving productivity in services - Table 7.3 p271

      Technique	Example
      *Restrict offerings	Limited-menu restaurant
      *Structure services	Bank with loan officer for loan,     service rep for new acct,     teller for deposit
      *Self-service	Supermarket
      *Automate services	Automatic teller machine
      *Customize at delivery	Van customized by dealer

6. Process Redesign (also called Reengineering) p277

   1. Def - Process Redesign (Reengineering) - the fundamental rethinking of business processes to bring about dramatic improvements in performance.
   2. Many times, process redesign (reengineering) profoundly changes a process thru the use of information technology.
            Ex., Dell sells PCs thru the Internet.
   3. TQM continually improves an existing process, whereas process redesign starts with a clean slate.
                                 (This page was last edited on January 15, 2010 .)