Operation management tech

1. PROCESS DESIGN

2. Process Strategy
• The pattern of decisions made in managing
processes so that they will achieve their
competitive priorities
• A process involves the use of an
organization’s resources to provide
something of value
• Guides a variety of process decisions, and
in turn, is guided by operations strategy

3. Process Strategy (contd.)
• Major process decisions include:
 Process Structure
 Customer Involvement
 Resource Flexibility
 Capital Intensity

4. Major Decisions for
Effective Process Design

5. Major Process Decisions (contd.)
• Process Structure: Determines how
processes are designed relative to the
kinds of resources needed, how resources
are partitioned between them, and their
key characteristics
• Customer Involvement: Refers to the
ways in which customers become part of
the process and the extent of their
participation

6. Major Process Decisions
(contd.)
• Resource flexibility: The ease with which
employees and equipment can handle a
wide variety of products, output levels,
duties, and functions
• Capital intensity: The mix of equipment
and human skills in a process

7. Process Structure In Services
• An effective service process strategy in
one situation can be a poor choice in
another
• Strategy chosen for a fast food restaurant
may not work for a five-star restaurant,
where customers seek leisurely dining
experience
• A good process strategy for a service
process depends first and foremost on the
type and amount of customer contact

8. Process Structure
In Services (contd.)
• Customer contact is the extent to which the
customer is present, is actively involved,
and receives personal attention during the
service process
• At this stage, customer’s perceptions about
the quality of the service provided are
shaped

9. People What is processed Possessions
Active, visible Contact intensity Passive, out of sight
Personal Personal attention Impersonal
Face-to-face Method of delivery Regular mail
Present Physical presence Absent
High Contact Dimension Low Contact
Process Structure
In Services (contd.)

10. Customer Contact
And Process Elements
• Active Contact: The customer is very
much part of the creation of the service
and affects the service process itself
• Passive Contact: The customer is not
involved in tailoring the process to meet
special needs or in how the process is
performed

11. Customer Contact
And Process Elements (contd.)
• Process Complexity: The number and
intricacy (complication) of the steps
required to perform the process
• Process Divergence: The extent to which
the process is highly customized with
considerable latitude as to how it is
performed

12. Customer Contact
And Process Elements (contd.)
• Flexible Flow: The customers, materials
or information move in diverse ways, with
the path of one customer or job often
crisscrossing the path that the next one
takes
• Line Flow: The customers, materials or
information move linearly from one
operation to the next, according to a fixed
sequence

13. Customer-Contact Matrix For
Service Processes
Less Customer Contact and Customization
Service Package
Front office
Hybrid office
Back office
(1) (2) (3)
High interaction with Some interaction with Low interaction with
customers, highly customers, standard customers, standardized
customized service services with some options services
Process
Characteristics
(1)
Flexible flows,
complex work with
many exceptions
(2)
Flexible flows with
some dominant
paths, moderate
job complexity with
some exceptions
(3)
Line flows, routine
work easily
understood by
employees
Less
Complexity,
Less
Divergence,
More
Line
Flows

14. Process Structure
In Manufacturing
• Since products differ from services, a different
view on process structure is needed
• Product-Process Matrix
• Synchronizes the product to be manufactured
with the manufacturing process itself
• Volume
• Product customization
• Process characteristics

15. Product-Process Matrix
Continuous
process
Job
process
Line
process
Large batch
process
Small batch
process
(1) (2) (3) (4)
Low-volume Multiple products with low Few major High volume, high
products, made to moderate volume
to customer
order
Process
Characteristics
(1)
Customized process,
with flexible and
unique sequence of
tasks
(2)
Disconnected line
flows, moderately
complex work
(3)
Connected line, highly
repetitive work
(4)
Continuous flows
Less
complexity,
less
divergence,
and
more
line
flows
Less customization and higher volume
Batch processes
standardization,
commodity products
products,
higher vol

16. Product-Process Matrix (contd.)
• A good strategy for a manufacturing process
first and foremost depends upon the volume
• For many manufacturing processes, high
product customization means lower volumes
• Process Choice: The way of structuring the
process by organizing resources around the
process or products

17. Product-Process Matrix (contd.)
• Job Process: A process with the flexibility
needed to produce a wide variety of
products in significant quantities
• Batch Process: A process that differs from
the job process with respect to volume,
variety and quantity

18. Product-Process Matrix (contd.)
• Line Process: A process in which the
volumes are high and the products are
standardized allowing resources to be
organized around particular products
• Continuous Flow Process: The extreme
end of high volume standardized production
and rigid line flows, with production not
starting and stopping for long time intervals

19. Production And
Inventory Strategies
• Make-to-Order Strategy
• Assemble-to-Order Strategy
 Postponement
• Make-to-Stock Strategy

20. New Service/Product
Development Process
Design
Analysis
Development
Full Launch
Service/Product not
profitable
Post-launch review
Need to rethink the
new offering/production
process

21. New Service/Product
Development Process (contd.)
• Competitive priorities help managers
develop products and services that
customers want
• Development of new products/services is
vital to the long-term survival of the firm
• New may either mean introducing a brand
new concept or implementing major
changes to the existing products/services

22. I. Design Stage
• Critical stage as it links the creation of new
services/products to the corporate strategy
of the firm
• The corporate strategy specifies the long-
term objectives of the firm
• Ideas for new offerings are proposed and
screened for feasibility and market
worthiness

23. I. Design Stage (contd.)
• The ideas specify:
 how the customer connects with the service
or manufacturing firm;
 the benefits and outcomes for the customer;
and
 the value of the service/product
• The proposals also specify how the new
offering will be delivered

24. II. Analysis Stage
• Involves critical review of the new offering and
how it will be produced to make sure that:
 it fits the corporate strategy;
 is compatible with regulatory standards;
 presents an acceptable market risk; and
 satisfies the needs of the intended customers
• The resource requirements for the new
offering must be examined

25. II. Analysis Stage (contd.)
• The firm must examine the need to
acquire additional resources or expand the
supply chain by forming strategic
partnership with other firms
• If the analysis reveals that the new offering
has a good market potential and the firm
has the capability, the authorization is
given to proceed to the development stage

26. III. Development Stage
• Required competitive priorities are used as
inputs to the design of the processes that will
be involved in delivering the new offering
• Each activity is designed to meet its required
competitive priorities as well as to add value
• After process designing, the market program
can be designed
• Finally, personnel are trained and pilot runs
are conducted

27. Concurrent Engineering
• Used in order to avoid costly mismatches
between the design of a new offering and
the capability of the processes
• Brings product engineers, process
engineers, marketers, buyers, information
specialists, quality specialists and
suppliers together to design a product and
the processes that will meet customer
expectations

28. IV. Full Launch Stage
• Involves coordination of many internal
processes as well as those both upstream
and downstream in the supply chain
• Promotion for the new offering starts
• Briefing to sales personnel is done
• Distribution process is activated
• Withdrawal of old products/services
• Post-launch review (inputs from customers)

29. Quality Function Deployment
• As described by Dr. Yoki Akao, QFD is a
method to:
transform user demands into design quality;
deploy the functions forming quality;
deploy methods for achieving the design
quality into subsystems and component
parts, and ultimately to specific elements of
the manufacturing process

30. QFD (contd.)
• Refers to both:
determining what will satisfy the customer;
and
translating those customer desires into the
target design
• The idea is to capture a rich understanding of
customer wants and to identify alternative
process solutions

31. QFD (contd.)
• Used early in the design process to help
determine what will satisfy the customer and
where to deploy quality efforts
• A process for determining customer
requirements (customer “wants”) and
translating them into the attributes (the
“hows”) that each functional area can
understand and act on

32. House Of Quality
• One of the tools of QFD
• A graphic technique for defining the
relationship between customer desires and
the product (or service)
• By defining this relationship, operations
managers can build products and processes
with features desired by customers
• Defining this relationship is the first step in
building a world-class production system

33. Steps To Building House Of Quality
• Identify customer wants (what do prospective
customers want in this product?)
• Identify how the good/service will satisfy
customer wants (identify specific product
characteristics, features, or attributes and
show how they will satisfy customer wants)
• Relate customer wants to product hows
(building matrix)

34. Steps (contd.)
• Identify relationships between the firm’s
hows (how do our hows tie together?)
• Develop importance ratings
• Evaluate competing products (how well do
competing products meet customer wants?)
• Determine the desirable technical attributes,
your performance, and the competitor’s
performance against these attributes

35. You’ve been assigned
temporarily to a QFD
team. The goal of the
team is to develop a
new camera design.
Build a House of
Quality.
© 1984-1994 T/Maker Co.
House of Quality Example

36. House Of Quality (contd.)