Part Two: Process Selection processes that do not produce products Assembled-to-order and Job Shop

in the state that was intended by Made-to-stock.

Process selection involves strategically designers or fail to cater the needs of the We consider the job shop a special case
choosing which types of work processes customers in the market ought to be 1. Product Flow of batch process because the product is
to include in the production of a product. avoided, regardless of how made in batches, usually in small lot
allows an organization to offer a safe cost-effective they may be. sizes but the product is customer orders.
Continuous Flow (Repetitive) Refers
and reliable product and service through to the so-called process industries. The
pragmatic design and effective capacity ● Quantity of products output is made in a continuous process Project
planning. With the help of process and tends to be highly standardized and
selection we can understand the The quantity of products that the with very high volumes of production. A form of operations used for unique or
different types of processing including company produces for customers also Often continuous flow products are creative products. This is characterized
manual, rigid, and flexible as well as determines the choice of the appropriate liquids or semi-solids that can be by difficult planning and scheduling
various automated approaches to manufacturing process. pumped or that flows from one operation problems since the product may not
processing. to the other. have been made before. The tasks and
● Environmental Sustainability resources must be sequenced and
Process selection allows an Assembly line (Discrete processing) scheduled to meet the required delivery
operations manager to better Apart from the three aforementioned Is characterized by a linear sequence of dates.
understand the need for management of factors that affects the selection of the operations. The product moves from one
technology. Together with capacity step to the next in a sequential manner
manufacturing process design, there are 2. Order Fulfillment
planning it helps an organization to from beginning to the end. Assembly line
numerous other factors that operations
develop different approaches to meet create products such as refrigerators,
managers put into consideration. One of Made-to-Order It has a higher flexibility
the irregular demand pattern of the automobiles, computers and printers.
these is the potential impact that the for product customization. Individual
customers. Some factors needs to be process may have on the environment. Products are moved from one section to
considered when selecting a process to orders can be identified during
With the current focus that the the next, usually by a conveyor system.
use. production. As each order is made with
international business community on It uses a product layout which the
customers specification, each job in the
environmental sustainability, companies machines and labor are organized
process is associated with a particular
These are the following: ought to ensure that they select according to product flow itself.
customer.
processes that have the least adverse
● Cost impact on the environment. Batch Flow Is characterized by the
Made-to-Stock It can provide faster
production of the product in batches or
service to customers by delivering
The key objective of any business is to There are two different types of lots. Each batch travels together from
orders from available stock and at a
maximize their profits while offering process to be used- Product flow and one operation or work center to another.
lower cost. It is building products for
quality to customers. Therefore, one of Order A Work Center is a group of similar inventory and the jobs in process is not
the strategies that can be used in machines or processes used to make a identified for any particular customer.
achieving this objective is ensuring that product. Batch operation can be used to
fulfillment. Product flow has five
the processes being undertaken are as make many different types of products
different classifications- Continuous flow, Assembled-to-Order It is a hybrid of the
cost effective as possible. and is very flexible because the
Assembly line, two made-to-order and made-to-stock.
machines used is not specialized to
make one particular product. It uses a The subassemblies are made-to- stock
● Quality Batch, Job Shop and Project while Order but the final assembly are made-to-order.
Process layout which the machines and
Fulfillment has 3 categories- labor are organized by process types When the customer order is received,
Apart from reducing costs to maximize Made-to-order, into work centers. the subassemblies are taken from the
profits, companies also select their inventory and assembled together for
manufacturing process designs based the customers order.
on the quality of their outcome.
Manufacturing
Product Process Strategy Represents Fast Changeover Very critical form of 2. Recycled Inputs- using materials Simultaneous Production and
the strategic choices available to firms in mass customization. It is computer from other processes as inputs into a Consumption
both product and process dimensions. controlled and each order is uniquely process.
This can provide a unique capability that identified by a bar code that specifies the Whereas most goods are produced first
helps the firm compete in the market. It customer’s options. 3. Remanufacturing- restoring and and then sold and consumed.Because
represents a strategic combination of reusing some product components in the of the simultaneous production and
both product and process and it requires Postponement Is used to defer a production of new products. consumption service producers find
cross-functional cooperation between portion of the production until the point of themselves playing the role of the
Marketing and Operations to ensure that delivery. Environmental Concerns product itself and as an essential
Cross Functional Decision Making
both product and process choices have Operations affect the natural ingredient in the service experience for
been considered. environment, decisions about the the consumers
It starts with operations and marketing
production process can have a great interactions. The critical role of
Focused Operations Are used to environmental impact which is why they marketing in estimating and managing Implications of Simultaneous Production
separate products and processes that have to consider how their process can and Consumption:
future demand is apparent. Some
have different requirements in terms of affect the environment.
scenario planning should be done to
the production process or the markets
estimate the appropriate product and ★ Customers participates in and affects
served. Each process should be Areas of decisions that can affect the process response for different demand the production.
assigned to a different facility. environment: scenarios. The Finance has a key role in
process selection decisions because of ★ Employees affect the service
Mass Customization Is a strategy to Pollution Prevention This structural the capital investment required. The
provide products in lot of sizes in high outcome.
investments reduce or eliminate Human resource plays a key role in
volume using modern technology. It pollutants from the production process. providing a human capital that is
depends on economies of scope that is, This investments might include consistent with the process selection ★ Mass production is difficult.
a high variety of products from a single designing the process to waste fewer choices, workers who can accept highly
process. raw materials or investing in updated repetitive and routine jobs. Front office Processes that require the
process equipment that requires less presence of or interaction with the
Customization refers to making energy input. CHAPTER FIVE customer.
different product for each customer. But
Mass Customization is providing Pollution control They are used to treat Service Process Design Back office Processes that do not
customized products at approximately or dispose of pollutants and harmful require the presence of the customer.
the same cost as mass production. Not by-products that are outputs from
all kinds of products can be mass Is a process of planning and organizing
process. Infrastructure system and Service-Product Bundle A
customized because the cost would be people, infrastructure, communication
Practices that affect the way processes and material components of a service in classification system distinguishes
higher. are used It includes retraining workers to order to improve its quality and the among different types of services and
use the existing process in a new the associated management tasks.
interaction between the service provider
Three forms: manner and increasing cross-functional
and its customers.
coordination to seek creative and
Three elements of service-product
Modular Production Provide a variety innovation improvements in
Service Are delivered by a wide variety bundle:
of options by using an environmental impact. Other
environmental concerns related to of organizations-from business selling
assemble-to-order process.
process choice include the ff: services to consumers and other ● Tangible service or explicit service is
businesses,nonprofit services, to the experience gathered by the five
government services. senses.
1. Recycling Outputs- uses for process
by-products.
● Intangible service or implicit service Five types of customer-introduced routines, and standardization of the Outsourcing Services Is having an
are the customers feelings about the variability: product and process. High-contact organization outside your own firm
interaction and the pleasantness of the services require employees who are perform service activities such as
surroundings. 1. Arrival Variability uncertainty in when flexible,personable, and willing to work workforce recruiting, payroll
customers will arrive to consume a with the customer. management,accounting services, and
● The physical goods or facilitating service. call center functions.
goods are the materials or items 3. Low-contact operations can work at
purchased or consumed by the buyer 2. Request Variability uncertainty in what average demand levels and smooth out Offshoring A company sends in-house
and/ or provided by the customer. customers will ask for in the the peaks and valleys in demand. jobs to be performed in another country.
service-product bundle. Providers of high-contact service must
Service Matrix It provides you with a respond immediately as demand occurs Service-Profit Chain A connection
comparative analysis of your service 3. Capability Variability uncertainty in the in peak situations. exists between high profits, customer
offerings and differentiates you from ability of customers to participate in a loyalty and satisfaction and employee
your competitors. service. 4. Low-contact operations can work at productivity and satisfaction.The
average demand levels and smooth out application of this model first considers
Dimensions of Service Matrix: the peaks and valleys in demand. profits generated by the loyalty of a
4. Effort Variability uncertainty in the
willingness of customers to perform Providers of high-contact service must customer.
● Customers-routed services are those appropriate actions. respond immediately as demand occurs
in peak situations. Customer Loyalty Is the result of
in which customers want a unique,
highly customized experience. consistently positive emotional
5. Subjective-preference Variability
5. High-contact services generally experience, physical attribute-based
uncertainty in the intangible preferences
● Co-routed stock brokerage offer a of customers in how the service is require higher prices and more satisfaction and perceived value of an
moderate number of choices to carried out. customization due to the variable nature experience, which includes the product
of service. or services.
customers, using moderately
standardized processes. High-Contact Service Greater level of
Service Recovery Is a company's External service value A company
contact exist between the service
● Provider routed services Self Service provider and customer. (e.g) health resolution of a problem from a measures value using the reasons
centers, hotels, and schools. dissatisfied customer, converting them expressed by customers for high or low
into a loyal customer. satisfaction.
A type of retail business where
customers help themselves to the Low-Contact System Means you give
Service Guarantees A way to define the Employee part of the service-profit
products that they wish to purchase. them tools to sort things out for
themselves. (e.g) research laboratories service and ensure its satisfactory chain:
and home offices banks. delivery to the customers.
Customer Contact An interaction
❏ Productive employees are essential
between customers and service
Two components: in delivering value to the customers.
organizations. It is also the process of Characteristics of High and
handling a query of the customer before, Low-Contact Services:
during and after the purchase of any ● A promise of what service will be ❏ Employee retention refers to the
product or services. delivered. ability of an organization to retain its
1. Low-contact services are used when
employees.
face-to-face interaction is not required.
Variability Lack of consistency in one ● What the payout will be if the promise
service firm. 2. Low-contact services require is not fulfilled.
employees with technical skills, efficient
processing
❏ Satisfied employees is an important -A business, cannot sell without what it check processing system and This relationship is called “Little’s Law”
element within business because it cannot produce and does no good to redesigned it without considering the named after the operation researcher
directly relates to the productivity of produce a product that cannot be sold. contrail of the existing organization. who discovered it.
employees. Every operation can be viewed as a
system by identifying information system Measuring a Process Flow These Little’s Law- basically says that the
CHAPTER SIX must be isolated from its environment by measure yields Insights into Structure average number of items in a system (I)
specifying the system boundaries. The and performs of a transformation is the product of the average arrival rate
Process Flow Analysis boundaries should be encompass all the process. Let us assume we are studying of the system (R) and the average length
important interacting elements for the the airport security process during of time any item stays in the system (T).
purpose of the analysis or a decision check-in at a major airport. We notice In the mathematical terms little’s law is
Is used to avoid the situation described being made. that there is a line of passengers waiting stated as follows:
above. By viewing and analysing
transformation process as a sequence of to clear security, sometimes a long line
steps connecting inputs to outputs, The Process View of a Business there is also a number of security line I= average number of things in the
until passengers are cleared to catch system (or inventory)
process-flow analysis as used to
One of the most contributions of process their flights. It turns out that these three
discover better methods or procedures
thinking is that a business can be viewed observations are related. The average
for producing and delivering a product or T= average throughput time (or flowtime)
not only as a system but also as a rate at security can process passengers,
a service deemed to be of value to
customers. collection inter collected processes. the average time it takes to get through
the line and the average number of R= average flow rate into the process
Some processes are strategic, planning
order entry, supplying the product, passengers in the line.
Measuring Process Flow Is essential Example:
receiving payment from the customer,
to process flow analysis and improving
customer satisfaction and human Measuring a Process flow at Pizza
the transformation process. (R=5) average of a passenger in a
resources management. U.S.A
minute
The Flow Chart Is an essential tool to
The process view of a business is To Cement our understanding of the
facilitate process flow analysis. - should
Horizontal in nature; the functional view concept of the process let us return to (T=20 minutes) average of security
consider not only the process flow but check line
is Vertical. the
customers, supplies, and employee
inputs in designing better process.
Viewing a Business As a collection of Pizza U.S.A. (RxT=I) 5X20=100
process emphasizes the cross functional
Process Thinking Is the point of view
nature of decision making. It illustrates EXAMPLE: 100 is the average number of
that all work can be seen as process. It
than function must make a hand off from passengers in line
begins by describing the process of
interest as a system. one another in executing a process. Suppose that one of the pizza stores
Before the application of process produce fresh pizza with 7 different Throughput Time The Time when the
thinking the bank is operated in product first start being processed in the
System Often is defined as a collection toppings choices including the most
traditional manner bureaucratic factory until it is finished and shipped.
of interrelated elements whose whole is popular “Everything Dumped” pizza. The
structures and department.
greater than the sum of its parts. store staffed by two employees; A pizza
chef and assistant. It has an oven that CAPACITY Is the maximum rate of
For Example; can bake up to four pizzas at a time. The output from the transformation process
Example: The human body is the system
transformation process (or sequence of or the maximum flow rate that can be
the heart, ling, brain and muscles cannot
A check deposited by a customer steps) followed at the store is as follows; sustained over a period of time.
function without one another.
required a 64 Activities 9 Forms and 14
Accounts. The BAI designed team
-Each of these functions accomplishes systematically diagnosed the current
nothing by itself.
Queuing (or waiting line) theory which is includes process measurements, can developing the flowchart and ideally, for by those unfamiliar with the information
covered in the technical chapter on the help identify how the transformation subsequent analysis. This individual or a process is an important first step in
text website, explains these phenomena process can be improved by changing team not only should have process process-flow analysis.-A systematic
in detail. some or all the following elements. ownership, that is, authority for initiating approach should be followed to analyze
and or implementing changes to the the related flowchart and the underlying
Capacity= Minimum ( capacity of 1) Raw Material selected information process. transformation process. This approach is
resources) epitomized by asking questions about
2) Process or Service Design 3) Specify the boundaries of the flowchart, and by extension, the
transformation process. The boundaries underlying transformation process.
Note:
denote where the selected -When these questions are asked,
3) Job Design opportunities to improve the underlying
transformation process begin and end,
Note that the capacity of the entire transformation process can be
process cannot be larger than the identify who the customer/s and
4) Processing Steps Used supplier/s of the transformation process highlighted. -For example, looking at the
capacity of the most constraining (the process chart figure 6.5 asking
are and determine how many processing
smallest capacity) resources, which is questions about the picking operation at
5) Management Control step or activities are to be evaluated.
called the bottleneck. the grocery distribution center lead to the
6) Equipment or Tools realization that many activities
The amount of transformation process 4) Identify the sequence the optional
(transportation, inspection, and delays
actually produce will depend not only on steps or the activities necessary to
complete the outputs for the customers. and storage) do not add value to the
its capacity but also on the supply and 7) Suppliers
It is important in process flow charting to service provided and should be reduced
demand of the process. The flow rate is or eliminated. -More overlooking at the
The Visual Diagram that is created from depict what is actually happening and
as follows. information flow chart in figure 6.6 and
process flowcharting is known in generic not what only thinks is happening.
asking questions lead to the realization
Process flow Charting We have terms as a flow chart (or flow process that printing and distributing pick sheets
chart or service blueprint or value). In 5) Identify the performance metrics for is only costly for the environment but
several ways to measure a
creating a flowchart, regardless of what the operational steps or the activities also the time consuming. If orders can
transformation p[rocess these
it is called, a number of principles should within the selected transformation be channeled electronically to relevant
measurements are useful not only in the
be followed to create a flowchart that is process. These metrics ideally should be individual, the information would be
operation but in any process within the
business as well as processes that cut easy for individuals unfamiliar with the tried to the performance of the overall mostly timely accurate. As a result of
across different firms within a supply transformation process to understand transformation process. For example if asking question, a number of changes
that facilitates the process flow analysis. delivery performance is of interest, it were implemented, including moving
chain.
These principles are consistent with may be useful to track the processing aisles around (i.e., a process layout
process thinking with views the times for each operational step of activity, change) revising and picking methods to
Process flow charting- Refers to the information process as a system with conversely if quality performance is of
creation of visual diagram to accurate a reduce bottlenecks and labor time (i.e.,
inputs, outputs, customers, suppliers, interest it may be useful to track the changes to work methods and jobs) and
transformation process. Flow charting is defect rate for each operational step or
boundaries, and processing steps and designing special carts to make the
known by different names:In General- as activity.
flows. loading and delivery vans easier and
process mapping In Manufacturing
context- as flow process In a service faster (i.e., an equipment change) - In
The Principles are as Follows: 6) Draw the flowcharts defining and summary, process-flow analysis
operation Context- as service
Blueprinting. What matters is creating using symbols in a consistent manner. requires a good description of the
the visual diagram can be invaluable 1) Identify and select a relevant transformation process used to convert
documenting what goes within a transformation process (or system) to Process Flow Analysis as Asking inputs into outputs. This description can
transformation process. This pictorial study). Questions be facilitated by creating a flowchart that
documentation when shows materials flows,
2) Identify an individual or a team of Creating a flowchart of a transformation
individuals to be responsible for process that is easy to understand
information flows, or service flows. Once the customer. In the Redesigned system, Toyota Production System (TPS) and needs and no more they reported that
a flowchart is created appropriate everyone process his or her own Just-In-Time (JIT). the best plants using lean production
question should be asked to highlight information with access to a centralized had a big edge in automobile assembly
improvement opportunities in database. Toyota Production System performance anywhere in the world . In
procedures, tasks, equipment, raw 1996 Womack and Jones published a
materials, layout,supplier or 3) Put the decision point where the work book on lean thinking in which they
(TPS)
management control information. is performed build control into the attempted to show how the concepts,
process. principles, and techniques underlying
● In the 1960s a Japanese miracle lean production could be extended
Business Process Reengineering
started at the Toyota manufacturing outside production to the entire business,
(BRP) - It is always better to push the decision company. After visiting American including marketing, finance, and
making to the lowest possible level. This manufacturing companies, Toyota accounting.
Usually starts with the entire business will eliminate layers of bureaucracy and determined that it could not copy the
and identifies critical process required speed up the decision making process. American system of mass production.
to meet the customers needs. Assumes 7.2 LEAN TENETS
radical design of business process. 4) Eliminate unnecessary steps in the ● Not only was demand for Toyota
process. -Lean Thinking, as the name signals, is
Automobiles low at that time, there was
-Many processes simply cannot be a severe lack of resources. a way of thinking, about processes at
improved in small steps and require a -Simplifying the process frequently work (and even processes at home).
complete design to improve them in a Five tenets that subsume specific
means that unnecessary steps and Just-In-Time (JIT)
major way. concepts, principles, and techniques.
paperwork are eliminated.
● JIT manufacturing came to America in 1. Specify precisely what it is about a
- To pursue a successful radica design -The flowcharting techniques discussed 1981 at the Kawasaki motorcycle plant
Hammer and Champy (2001) advocate earlier, and only those which add value product or service that creates value
in Nebraska, which used many ideas from the customer’s perspective
compliance with principles. for the customer retained. from Toyota Production system.

1) Organize around outcomes, not 2. Identify, study, and improve the value
Chapter Seven ● JIT manufacturing focused primarily
tasks. stream of the process for each product
on inventory reduction and, therefore, or service.
Lean Thinking and Lean Systems was viewed as a new way to control
-The insurance company described production and inventories.
above was organized according to tasks, ● The value stream identifies all the
7.1 EVOLUTION OF LEAN processing steps and task undertaken to
using the classic division of labor. One ● In 1990 Womack, Jones, and Ross
handled customers phone calls, others complete a product or deliver from
After World War II the American system studied JIT automobile manufacturing in beginning to end.
handled policy services, underwriting
of mass production was the envy of the Japan, the United States, and Europe
and accounting.
world. Mass production-the production of and popularized the term lean
● One technique supporting this tenet is
standardized discrete products in high production in their famous book The
2) Have the people who do the work value stream mapping,which creates a
volume by means of repetitive Machine That Changed the World: The
process their own information. Story of LeanProduction. visual representation of the value stream
manufacturing technologies-was the of a process and in this sense has the
norm. Materials were produced in large same purpose as process flowcharting
-In the ford example, the accounts batches, and machines were made to Lean Production- as systematically (discussed in chapter 6).
payable department was responsible for run faster to reduce costs. This eliminating waste in all production
reconciling information that was received realization became the foundation for processes by providing exactly what the
from other departments and from what is known today as the customer ● The Japanese refer to direct
observation taken where
work is performed so that opportunities technique. work centers that support final when all the containers are filled. The
can be identified as Gemba. assembly. number of containers needed to operate
● Another well-known technique a work center is a function of the
3. Ensure that flow within a process is supporting lean thinking is - The objective of single unit production demand rate, container size, and the
simple, smooth, and error-free, thereby should not be abandoned since it lead time for a container. This is
avoiding waste. ordinarily leads to the lowest system illustrated by the following formula:
5S.
costs. n=DT/C
● Waste, in lean thinking, is anything ● Besides 5S and 5 Whys, lean thinking
that does not contribute value to the - This type of master schedule also where n = total number of containers
involves the concept of Poka-Yoke, or
product or service being produce and mistake proofing. helps reduce work-in process and
delivered to the customer; rather than raw-materials inventories, since D=demand rate of the using work center
adding value, wastes adds costs. ● Poka-Yoke is not a technique per se. stabilizing the master schedule provides
nearly constant demands on all C= container size in number of parts,
● The Japanese term for waste is muda . supplying work centers and outside usually less
● A Poka-Yoke device is thus any suppliers.
mechanism that prevents mistake from
● Production process by simply pulling occurring during the production, delivery, than 10 percent of daily demand.
on a cord which triggers a call for help. or consumption of a good or service or 7.5 CONTROLLING FLOW WITH THE
KANBAN
that allows mistakes to be identified T= time for a container to complete an
4. Produce only what is pulled by the easily, often at a glance. entire circuit:
customer. SYSTEM
7.3 THE LEAN SYSTEM Lean thinking filled, wait, moved, used, and returned to
● Complying with this tenet requires can be expected to affect every other -Kanban is the method of production be filled again( also called lead time).
replacing the push mentality typical of function in the manufacturing firm. authorization and materials movement in
traditional mass production with the pull Particularly engineering, marketing, the lean production system.
It is the responsibility of managers and
mentality of lean production. human resources, and finance. workers in lean system to reduce
-The kanban system is a simple and inventory by means of a constant cycle
● A push mentality aims to produce 7.4 STABILIZING THE MASTER visual “parts withdrawal system” of improvement. Reducing lead time is
goods or ensure delivery of services well SCHEDULE involving cards and containers to pull the key.
in advance of demand . parts from one work center to the next
just in time.
- The process of production planning 7.6 REDUCING SETUP TIME AND LOT
● A pull mentality, on the contrary, waits starts with a long-range production plan, SIZES Reducing setup time is important
for the final customer to signal a need for which then is broken down into annual, The Two Types: Production Cards, in lean production systems. Single setup
good or service before producing it to monthly, and daily plans. and Withdrawal (move) cards. are being sought in many companies.
fulfill that need. One-touch setup are also being pursued,
- Matching supply to demand is -To see how the kanban system works this refers to a setup of less than one
5. Strive for perfection. illustrated by the concept of takt time. as a physical control system,assume minute. Internal setup refers to actions
that eight containers are used between that require the machine to be stopped,
work centers A and B (A supplies B) and whereas an external setup can be done
● Perfection used here is an affordable - Tak is the German word for the baton
that each container holds exactly 20 while machine is operating.
good or service. that an orchestra director uses to
parts. The maximum inventory that can
regulate the speed of music.
exist between these two work centers is 7.7 Changing Layout and Maintaining
● One simple and relatively powerful 160 units (8x20) since production at Equipment
technique is the 5 Whys - Production is leveled to create a work center a will stop
uniform load on all
-Part C of the figure shows that the lean Deploying lean thinking often starts and
layout has evolved to a group is maintained through Kaizen events (or
technology (GT), or cellular Kaizen blitzes)
manufacturing, layout.

7.8 CROSS-TRAINING REWARDING

AND ENGAGING WORKERS

-One of the critical things needed to

make s lean production system work is
multi-function workers

-Cross-training of workers is therefore a

critical human resources responsibility.

7.9 GUARANTEEING QUALITY

-Quality is absolutely essential in a lean

production system, as the value of the
goods and services that are produced
and delivered to customers presumes
quality.

7.10 CHANGING RELATIONSHIPS

WITH SUPPLIERS

-Finally, in the move from mass

production to lean production system,
the company’s suppliers are also
required to make radical changes.

-With a lean production system, several

deliveries may be made each day
provided that the supplier is located in
the same vicinity; this sometimes is
referred to as co-location.

7.11 IMPLEMENTATION OF LEAN

The lean tenets, when properly deployed

in manufacturing environment, ultimately
create a lean production system.