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Process selection
1. Operations Management
Chapter - 5
Process Selection and Facility Layout
Niranjan Sapkota
CAB
2. Product Design
Product design defines a product’s characteristics of:
Appearance
Materials
Quality
Cost
Dimensions
Tolerances
Performance standards
Process Selection – the development of the process necessary to
produce the designed product.
3. Changing customer Cost effectiveness
preferences
Need of New
Product/
technology
Productivity
Competition
5. Customer Competitor
Ideas of
Top Management New Sales
Product
Marketing Research and Development
6. Keeping firm’s Production Design and development
facility Up to date Of firms products and
facilities
Modification of the present Entire process has to be
Facility and process Designed from the sketch
(for the operating firm) Operation Manager (new company or entirely
New product)
7. Research for the Product
Pure Research Applied Research
Totally new research for new Translation of the concepts to
conceptual product Products in terms of man, machine,
Needs huge money Material, method and information
Concepts gathered from research Applicable in the following process
institutes, universities The design of new products
The redesign of existing product
The identification of new uses for
existing product
The improvement of packaging of
existing product
8. Interaction of Research
Market Research
Product
Pure Applied
configura Pilot run
research research
tion
Production process
9. Product Life Cycle
The study of pattern and process od product life cycle helps in determining facilities
Labor, capital and management system needed in each stage
10. Operation issues in product life cycle
Introduction Growth Maturity Decline
Product variety Different Increasing Emergence of Commodity
varieties Standardization dominant characteristics
design
Product Low volume Increasing High volume High volume
volume volume
Industry Small Fallout and Few large Survivors
structure competitors Consolidation companies
Form of Product varieties Product quality Dependability Price
competition and availability And price
11. Product Development Process
Need identification
Feasibility study
Advance design
Detailed engineering and development
Process design and development
Product evaluation and improvement
Product use and support
12. Need identification
• Starts with identification
of customer need
• Should satisfy customer
needs, requirements and
expectation
• Pure research and applied
research is used
13. Product planning(feasibility study)
Preliminary
activities
Market analysis Conceptual
Alternative concepts of design
product Shape
Operations requirements Size
Design criteria and Retail price
priorities Product
Logistic requirements for reliability
producing, distributing Product
and function
maintaining the product in
the market.
14. Advance Design
Product concept or design concept from
feasibility concept examined technically
Concerned with developing and evaluating the
design alternatives if necessary
15. Product Development and Engineering
Analyze experiments and collect data for product
development
The developed product should meet the following
objectives
Functionality
Reliability
Maintainability
Manufacturing
Computer analysis, simulations can be used for
multiple tests
Design of product with required drawing, working
prototype associated with required documents is
developed
16. Process design and developments
Prepare plans for
material acquisition
Productions
Warehousing
Transportation
Distribution
Production planning, controlling and HR
system also developed
17. Production evaluation and
improvements
Product performance in the market
Short falls and difficulties in the production
Result of other researches
18. Product use and support
Customer needs and expectations can be
enhanced by
Educating the people on the application of the
product
Provide warranty, repair and after sale service
Improve the design of product as required
19. Tools to Improve Speed to Market
• Computer-Aided Design/Computer-Aided
Manufacturing (CAD/CAM)
– Engineers, using CAD/CAM, can generate many
views of parts, rotate images, magnify views, and
check for interference between parts
– Part designs can be stored in a data base for use
on other products
– When it is time for manufacturing, the product
design is retrieved, translated into a language that
production machinery understands, and then the
production system can be automatically set up.
20. Tools to Improve Speed to Market
Product/
• Simultaneous Service Ideas
(Concurrent) Continuous
Engineering Economic and Technical Interaction
Feasibility Studies
Product/Service Design Production Process Design
Produce and Market
New Product/Service
21. Improving the Design
of Existing Products/Services
• Focus is improving performance, quality, and cost
• Objective is maintaining or improving market
share of maturing products/services
• Little changes can be significant
• Small, steady (continuous) improvements can add
up to huge long-term improvements
• Value analysis is practiced, meaning design
features are examined in terms of their
cost/benefit (value).
22. Designing for Ease of Production
• Ease of Production (Manufacturability)
– Specifications - Precise information about the
characteristics of the product
– Tolerances - Minimum & maximum limits on a
dimension that allows the item to function as
designed
– Standardization - Reduce variety among a group of
products or parts
– Simplification - Reduce or eliminate the complexity
of a part or product
23. Designing for Quality
Crucial element of product design is its impact on
quality
Quality is determined by the customer’s
perception of the degree of excellence of the
product/service’s characteristics
conformance to specification
Value
Fitness for use
Support
Psychological impression
Atmosphere image or aesthetics
24. Designing and Developing New
Services
Three general dimensions of service design are:
• Degree of Standardization of the Service
– Custom-fashioned for particular customers or
basically the same for all customers?
• Degree of Customer Contact in Delivering the
Service
– High level of contact (dress boutique) or low level
(fast-food restaurant)?
• Mix of Physical Goods and Intangible Services
– Mix dominated by physical goods (tailor’s shop) or
by intangible services (university)?
25. Designing and Developing New
Services
• Differences Between New Service and New
Product Development
– Unless services are dominated by physical goods, their
development usually does not require
engineering, testing, and prototype building.
– Because many service businesses involve intangible
services, market sensing tends to be more by surveys
rather than by market tests and demonstrations.
27. Major Factors Affecting Process
Designs
Nature of product/service demand
Degree of vertical integration
Production flexibility
Degree of automation
Product/Service quality
28. Nature of Product/Service Demand
Production processes must have adequate
capacity to produce the volume of the
products/services that customers need.
Provisions must be made for expanding or
contracting capacity to keep pace with
demand patterns.
Some types of processes are more easily
expanded and contracted than others.
Product/service price affects demand, so
pricing decisions and the choice of processes
must be synchronized.
29. Degree of Vertical Integration
Vertical integration is the amount of the
production and distribution chain that is
brought under the ownership of a company.
This determines how many production
processes need to be planned and designed.
Decision of integration is based on
cost, availability of
capital, quality, technological capability, and
more.
Strategic outsourcing (lower degree of
integration) is the outsourcing of processes in
order to react quicker to changes in customer
needs, competitor actions, and technology.
30. Production Flexibility
Product flexibility -- ability of the production
(or delivery) system to quickly change from
producing (delivering) one product (or service)
to another.
Volume flexibility -- ability to quickly increase
or reduce the volume of product( or service)
produced (or delivered).
31. Degree of Automation
Advantages of automation
Improves product quality
Improves product flexibility
Reduces labor and related costs
Disadvantages of automation
Equipment can be very expensive
Integration into existing operations can be difficult
32. Product/Service Quality
Old viewpoint – high-quality products must be
made in small quantities by expert craftsmen
New viewpoint – high-quality products can be
mass-produced using automated machinery
Automated machinery can produce products
of incredible uniformity
The choice of design of production processes
is affected by the need for superior quality.
33. Process Flow Structure
Project structure, where a single project is planned with a fixed end date,
such as building a house
Job shop structure, where each flow will be similar but slightly different,
such as poster printing
A batch process, where each flow produces a batch of identical products,
such as baking
An assembly line structure, where the flow produces a continuous
supply of fixed goods, such as a car assembly line
Continuous flow structure, where a continuous supply of finished goods
is produced, such as in an oil refinery
34. factors differentiating the different
process structures
The flow – are there a large number of paths which
activities can take, or is there only one possible sequence
of activities.
Flexibility – will changing the output of the process, in
terms of volume and products, alter the performance and / or
cost of the process
Range of products – can the process produce lots of
different products, or is it designed to only produce one
specific product.
35. Capital investment – does the process require
investments in expensive specialist equipment or can it use
general equipment that the firm may already own or can rent
Variable costs – how high is the cost of producing each unit
Labour requirements – how much labour input is
required, and how skilled must the laborers be
Volume – can the process produce lots of products, or will it
only create a few, or possibly one, end product
36. Project Structure/technology
Production of unique nature of
products like
building, bridge, dam, roads etc.
Product cant be standardized and
transported from one place to other
Requires specialized technology
with high flexibility.
Skilled manpower
Production of unique nature of
product to meet customer demand.
37. Job shop structure
Small batches of different types of products in different sets
or sequences
Variety of custom designed products in small volumes
Production is generally to meet the order s of customers
rather than for stock.
Less certainty in the nature , specification and quality of
goods to be produced..
Difficult to make planning of resources , scheduling of
operation and controlling activities.
Standardization of raw material, process , products and other
facilities is difficult.
38. A batch process
Improved form of job shop technology in the aspect of
standardization of products
Suitable when business has relatively stable line of products
Production is in periodical batches either to meet customer
order or for stock.
Less difficult for planning , controlling and scheduling
production process compared to job shop technology.
Eg. Electronic device manufacturing
39. Assembly line process
When products are relatively stable, high volume with limited
variety assembly line technology is suitable
Specialized equipment, skilled manpower, and management
systems are used and developed.
Production of limited range and high volume of products.
Less flexible compared to job shop and batch technology.
Eg. TV, Motorcycle
40. Continuous flow Process
When products are highly standardized and large volumes are
produced for stock , continuous flow technology is used
Uses standardized materials, machines, and equipment in
continuous flow to produce high volume of standardized
products .
It is capital intensive technology
Eg . Soap, noodles
42. Designing of service & service process
Technology
Meaning and nature of service
Service are experienced not consumed
Requires high customer contact
Requires effective management of staffs, marketing and
operation
Service cant be inventoried
43. Product dominance Service dominance
salt
Neck tie
car
Fast food
Air travel
theatre
nursing
Teaching
44. Service business and internal service
Service Business: management of organization whose
basic objective is to interact with customers to render services.
Facility based: business where customer must visit the
service facility to get service from organization
Field based: concerned with providing service in the
customer’s location and environment
Internal service: refers to services to other departments of
the same organization. Therefore customers of internal service
are other departments. Eg.
Accounting, marketing, maintenance, research and
development…
45. Designing of service
Identification of target market
who are the customers? where is its market? What do customers
want?
Service concept
How our service fulfills customer needs? What are service types? How
it is different from others?
Service strategy
What is service policy? What are the priorities? what are the service
packages and focus of service?
Service delivery system
What are the actual processes? What are the systems and facilities?
Who are employees and what should be their skills and ability?
46. Service Process Technology
Depends on two main factors..
Customer contact
during designing or customizing of service. Eg. Building
a new building
during creating or consuming of service. Eg. Hair styling
Labor vs Capital intensiveness
Teaching, nursing etc are labor intensive where training
and development of employees vital for quality service
24 hour ATM/ vendor machines are capital intensive
47. On the basis of customer contact and labor intensiveness service
process technology can be divided into four categories..
Quasi manufacturing process technology
Mass service process technology
Custom shop service technology
Professional service process technology
48. Quasi- Manufacturing Process
Technology
Requires low customer contact and capital
intensive technology to render the service.
Offers rigid and standardized service with
reliable delivery schedule.
Eg. Post Office, Telebanking
49. Mass service process technology
Labor intensive technology.
Rigid in nature providing standardized service
to the customer.
This technology requires training and
development and schedules of human
resource for providing quality and effective
service
Gg. Teaching, live Entertainment programs
50. Custom shop service technology
Provides customized service.
Highly professional staffs and capital intensive
technology for providing service.
Flexible but require high capital investment
Eg. Hospitals, Chartered travel services
51. Professional service process
Technology
Professional staffs provide customized service
to customer through intensive interaction.
Professionals are governed by professional
ethics, norms, organizational rules
Professional skills are highly flexible relating to
customer need.
Eg. Legal counseling, medical diagnosis.
52. Service Process Technology
Low customer contact High customer contact
Quasi manufacturing Custom shop technology
Charter travel service
intensive
technology
Capital
Postal service Long distance telephone
Check processing service
Automated warehousing Medical treatment
Mass service technology Professional service
intensive
Teaching Legal counseling
Labor
Live entertainment Medical diagnosis
Cafeteria Tutoring
Rigid process technology Flexible process technology
53. Research Topics
Service automation
Flexible manufacturing system
Computer integrated manufacturing
55. What is Facility Layout
Location or arrangement of everything within
& around buildings
Determines long-run efficiency of operations
Helps achieve a strategy that supports
differentiation, low cost or quick response
55
56. Strategic Importance of Layout
Proper layout enables:
Higher utilization of space, equipment and people
Improved flow of information, materials, or people
Improved employee morale and safer working
conditions
Improved customer/client interaction
Flexibility to change--use small, movable or modular
equipment; etc
56
57. The Need for Layout Decisions
Inefficient operations
For Example: Changes in the design
High Cost of products or services
Bottlenecks
Accidents
The introduction of new
products or services
Safety hazards
58. The Need for Layout Design (Cont’d)
Changes in
environmental Changes in volume of
or other legal output or mix of
requirements products
Morale problems
Changes in methods
and equipment