Chapter 7: Process Strategy and

Sustainability

7-1
 Summary

 Global Company Profile: Harley-

Davidson
 Four Process Strategies
 Process Focus
 Repetitive Focus
 Product Focus
 Mass Customization Focus
 Comparison of Process Choices

7-2
 Outline

 Process Analysis and Design

 Flow Charts
 Time-Function Mapping
 Value-Stream Mapping
 Process Charts
 Service Blueprinting

7-3
 Outline – Continued

 Special Consideration for Service

Process Design
 Customer Interaction and Process
Design
 More Opportunities to Improve
Service Processes
 Selection of Equipment and
Technology

7-4
 Outline – Continued

 Production Technology
 Machine Technology
 Automatic Identification Systems
(AISs) and RFID
 Process Control
 Vision Systems
 Robots

7-5
 Outline – Continued

 Production Technology (cont.)

 Automated Storage and Retrieval
Systems (ASRSs)
 Automated Guided Vehicles (AGVs)
 Flexible Manufacturing Systems
(FMSs)
 Computer-Integrated Manufacturing
(CIM)

7-6
 Outline – Continued

 Technology in Services

7-7
 Process Strategies

Four basic strategies

1. Process focus
2. Repetitive focus
3. Product focus
4. Mass customization
Within these basic strategies there are
many ways they may be implemented

7-8
 Process Focus

 Facilities are organized around specific

activities or processes
 General purpose equipment and skilled
personnel
 High degree of product flexibility
 Typically high costs and low equipment
utilization
 Product flows may vary considerably
making planning and scheduling a
challenge
7-9
 Many inputs
Process Focus
(surgeries, sick patients,
baby deliveries, emergencies)

(low volume, high variety,

Many departments and
intermittent processes) many routings
Arnold Palmer Hospital

Figure 7.2(a) Many different outputs

(uniquely treated patients)
7 - 10
 Repetitive Focus

 Facilities often organized as

assembly lines
 Characterized by modules with parts
and assemblies made previously
 Modules may be combined for many
output options
 Less flexibility than process-focused
facilities but more efficient

7 - 11
 Raw materials and
module inputs
Repetitive Focus (multiple engine models,
wheel modules)

Few
modules

(modular)
Harley Davidson

Figure 7.2(b) Modules combined for many

Output options
(many combinations of motorcycles)
7 - 12
 Product Focus

 Facilities are organized by product

 High volume but low variety of
products
 Long, continuous production runs
enable efficient processes
 Typically high fixed cost but low
variable cost
 Generally less skilled labor

7 - 13
 Few Inputs
Product Focus
(corn, potatoes, water,
seasoning)

(low-variety, high volume,

continuous process)
Frito-Lay

Output variations in size,

Figure 7.2(c) shape, and packaging
(3-oz, 5-oz, 24-oz package
labeled for each material)
7 - 14
 Product Focus
D A Scrap
Nucor Steel Plant steel
Continuous caster

B
C Electric
Ladle of molten steel furnace

Continuous cast steel

sheared into 24-ton slabs
Hot tunnel furnace - 300 ft
E F

Hot mill for finishing, cooling, and coiling

H G
I

7 - 15
 Mass Customization

 The rapid, low-cost production of

goods and service to satisfy
increasingly unique customer
desires
 Combines the
flexibility of a
process focus
with the efficiency
of a product focus

7 - 16
 Mass Customization

Number of Choices
Item 1970s 21st Century
Vehicle models 140 286
Vehicle types 18 1,212
Bicycle types 8 211,000
Software titles 0 400,000
Web sites 0 162,000,000
Movie releases per year 267 765
New book titles 40,530 300,000
Houston TV channels 5 185
Breakfast cereals 160 340
Items (SKUs) in 14,000 150,000
supermarkets
LCD TVs 0 102

Table 7.1
7 - 17
 Many parts and
component inputs
Mass Customization (chips, hard drives,
software, cases)

Many modules
(high-volume, high-variety)
Dell Computer

Figure 7.2(d)
Many output versions
(custom PCs and notebooks)
7 - 18
 Mass Customization
Repetitive Focus
Figure 7.3 Flexible people
and equipment
Modular
techniques
Accommodating
Product and Responsive
Process Design Supply Chains
Mass Customization
Rapid
throughput
Effective techniques
scheduling
techniques
Process-Focused Product-Focused
High variety, low volume Low variety, high volume
Low utilization (5% to 25%) High utilization (70% to 90%)
General-purpose equipment Specialized equipment

7 - 19
 Mass Customization

 Imaginative and fast product

design
 Rapid process design
 Tightly controlled inventory
management
 Tight schedules
 Responsive supply chain partners

7 - 20
 Comparison of Processes

Mass
Process Focus Repetitive Product Focus Customization
(low-volume, Focus (high-volume, (high-volume,
high-variety) (modular) low-variety) high-variety)

1. Small 1. Long runs, 1. Large 1. Large quantity

quantity and usually a quantity and and large
large variety standardized small variety variety of
of products product with of products products are
are produced options, are produced
produced produced
from modules

2. Equipment 2. Special 2. Equipment 2. Rapid

used is equipment used is changeover on
general aids in use of special flexible
purpose an assembly purpose equipment
line

Table 7.2
7 - 21
 Comparison of Processes

Mass
Process Focus Repetitive Product Focus Customization
(low-volume, Focus (high-volume, (high-volume,
high-variety) (modular) low-variety) high-variety)

3. Operators 3. Employees 3. Operators 3. Flexible

are broadly are modestly are less operators are
skilled trained broadly trained for the
skilled necessary
customization

4. There are 4. Repetitive 4. Work orders 4. Custom

many job operations and job orders require
instructions reduce instructions many job
because training and are few instructions
each job changes in because they
changes job are
instructions standardized

Table 7.2
7 - 22
 Comparison of Processes

Mass
Process Focus Repetitive Product Focus Customization
(low-volume, Focus (high-volume, (high-volume,
high-variety) (modular) low-variety) high-variety)

5. Raw-material 5. JIT 5. Raw material 5. Raw

inventories procurement inventories material
high relative techniques are low inventories
to the value are used relative to the are low
of the value of the relative to
product product the value
of the
product

6. Work-in- 6. JIT inventory 6. Work-in- 6. Work-in-

process is techniques process process
high are used inventory is inventory
compared to low driven down
output compared to by JIT,
output kanban, lean
production

Table 7.2
7 - 23
 Comparison of Processes

Mass
Process Focus Repetitive Product Focus Customization
(low-volume, Focus (high-volume, (high-volume,
high-variety) (modular) low-variety) high-variety)

7. Units move 7. Assembly is 7. Swift 7. Goods move

slowly measured in movement of swiftly
through the hours and units through through the
facility days the facility is facility
typical

8. Finished 8. Finished 8. Finished 8. Finished

goods are goods made goods are goods are
usually made to frequent usually made often build-
to order and forecast to forecast to-order
not stored and stored (BTO)

Table 7.2
7 - 24
 Comparison of Processes

Mass
Process Focus Repetitive Product Focus Customization
(low-volume, Focus (high-volume, (high-volume,
high-variety) (modular) low-variety) high-variety)

9. Scheduling 9. Scheduling 9. Scheduling 9. Sophisticated

is complex, is based on is relatively scheduling is
concerned building simple, required to
with trade- various concerned accommodate
offs between models from with custom orders
inventory, a variety of establishing
capacity, and modules to output rate
customer forecasts sufficient to
service meet
forecasts

10. Fixed costs 10. Fixed costs 10. Fixed costs 10. Fixed costs
tend to be dependent tend to be tend to be
low and on flexibility high and high, variable
variable of the variable costs must be
costs high facility costs low low

Table 7.2
7 - 25
 Summary

 Global Company Profile: Harley-

Davidson
 Four Process Strategies
 Process Focus
 Repetitive Focus
 Product Focus
 Mass Customization Focus
 Comparison of Process Choices

7 - 26