Operations
Management
Process Strategy
Process Strategies
Involves determining how to produce a good
or provide a service within constraints
Objective
Meet or exceed customer requirements
Meet cost & managerial goals
Has long-run effects
Production efficiency
Product & volume flexibility
Cost & quality
Fit of Process, Volume, and Variety
Low-Volume Repetitive Process High-Volume
(Intermittent) (Modular) (Continuous)
Process focus Mass
High Variety
One or few units per projects, job shop, Customization
run, high variety (print, carpentry) (difficult to achieve,
(allows customization) Standard Register but huge rewards)
Dell Computer Co.,
Changes in modules Repetitive Levis Jeans
Modest runs, standardized (autos, motorcycles)
modules Harley Davidson
Product focus
Low Variety; Changes
in attributes (such as (commercial baked
grade, quality, size, goods, steel, glass)
thickness, etc.) Steel, Cement
Long runs only
Process-Focused Strategy
Facilities are organized by process
Similar processes are together
Example: All drill presses are together
Low volume, high variety products
‘Jumbled’ flow Product A
Operation
Other names
1 2 3
Job shop
Product B
Process-Focused Example
Custom Woodworking Shop
Cutting Planing Shaping Assembly Sanding Finishing
1 2 5 6 7
Job A 2 3
Job B 3 4
1 4 5 6
Drilling Turning
Process Focus - Pros & Cons
Advantages
Greater product flexibility
More general purpose equipment – equipments
not dedicated to one product
Disadvantages
High production cost per unit
More difficult production planning & control
Low equipment utilization (5% to 25%)
Process-Focus Examples
Bank
Hospital
Machine
Shop
Repetitive Focused Strategy
Facilities often organized by assembly lines
Characterized by modules
Parts & assemblies made in modules
Modules combined for many output options
Other names
Assembly line
Production line
E.g. auto-manufacturing, pc’s, house-hold appliances,
etc
Assembly Line Example
Raw Material Components
2 4
Assemblies Fin. Goods
1 3 5 7
Raw Material Components Subassem.
Product/Material Flow
Production Operation
Repetitive Focus - Considerations
Product focused process that uses modules
More structured than process-focused, less structured
than product focused
Enables semi-customization
Using modules, it enjoys economic advantage of
continuous process, and custom advantage of low-
volume, moderately high-variety model
Repetitive Focus - Examples
Fast
Clothes
Food
Dryer
McDonald’s
over 95 billion served
Truck
Repetitive Focus
Product-Focused Strategy
Facilities are organized by product
High volume, low variety
Conversion or further processing of undifferentiated
materials such as petroleum, chemicals, or beer
Follows a predetermined sequence of steps, but flow is
continuous rather than discrete – highly standardized
Other names
Line flow production
Continuous production
Production Process at
NUCOR Steel
Product Focus - Pros & Cons
Advantages
Lower production cost per unit
Lower but more specialized labor skills
Easier production planning and control
Higher equipment utilization (70% to 90%)
Disadvantages
Lower product flexibility
More specialized equipment
Product-Focused Examples
Soft Drinks
(Continuous,
then Discrete)
Paper (Continuous)
Mass Customization
Using technology and imagination to rapidly
mass-produce products that cater to unique
customer desires
Under mass customization the three process
models become so flexible that distinctions
between them blur, making variety and
volume issues less significant
