Operations Management :

Sustainability and Supply Chain

Management

PROCESS STRATEGIES
Dr. Ousha Alshamsi
Chapter 7
 Outline
■ Four Process Strategies
■ Selection of Equipment
■ Process Analysis and Design
■ Special Considerations for Service Process Strategies
■ Production Technology
■ Technology in Services
■ Process Redesign.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Process Strategy
What is the process Strategy?

An organization’s approach to transforming resources into goods and services

■ The objective is to create a process to produce offerings that

meet customer requirements within cost and other managerial
constraints

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Process Strategies

■ How to produce a product or provide a Four basic strategies:

service that:
1. Process focus
– Meets or exceeds customer
requirements 2. Repetitive focus
– Meets cost and managerial goals
3. Product focus
■ Has long-term effects on:
4. Mass customization
– Efficiency and production flexibility
– Costs and quality Within these basic strategies are many
ways for implementation

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Process, Volume, and Variety

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 1. Process Focus
■ Facilities are organized around
specific activities or processes

■ General purpose equipment and

skilled personnel

■ High degree of product flexibility

■ High variable costs and low

equipment utilization

■ Product flows may vary frequently,

making planning and scheduling
a challenge.
Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP
2. 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.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

3. Product Focus

■ Facilities are organized by

product

■ High volume but low variety of

products

■ Long, continuous production

runs enable efficient processes

■ High fixed cost but low variable

cost

■ Less skilled labor.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP
4. Mass Customization

■ The rapid, low-cost production

of goods and services to satisfy
increasingly unique customer
desires

■ Combines the flexibility of a

process focus with the
efficiency of a product focus.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Making Mass Customization Work
■ How to make mass customization work?
– Imaginative product design
– Flexible process design
– Tightly controlled inventory management
– Digital communication tracks orders and material
– Responsive partners in the supply chain.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

Comparison of Processes
■ Comparison of the Characteristics of Four Types of Processes

PROCESS FOCUS PRODUCT FOCUS MASS CUSTOMIZATION

REPETITIVE FOCUS (HIGH-VOLUME, LOW- (HIGH-VOLUME, HIGH-VARIETY;
(LOW-VOLUME, HIGH-
VARIETY; e.g., ARNOLD (MODULAR; e.g., VARIETY; e.g., e.g.,
PALMER HOSPITAL) HARLEY-DAVIDSON) FRITO-LAY) DELL COMPUTER)

1. Small quantity and large 1. Long runs, a standardized 1. Large quantity and small 1. Large quantity and large
variety of products product from modules variety of products variety of products

2. Broadly skilled 2. Moderately trained 2. Less broadly skilled 2. Flexible operators

operators employees operators

3. Instructions for each 3. Few changes in the 3. Standardized job 3. Custom orders requiring
job instructions instructions many job instructions

4. High inventory 4. Low inventory 4. Low inventory 4. Low inventory relative to the
value of the product

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

Comparison of Processes
■ Comparison of the Characteristics of Four Types of Processes

PROCESS FOCUS PRODUCT FOCUS MASS CUSTOMIZATION

REPETITIVE FOCUS (HIGH-VOLUME, LOW- (HIGH-VOLUME, HIGH-VARIETY;
(LOW-VOLUME, HIGH-
VARIETY; e.g., ARNOLD (MODULAR; e.g., VARIETY; e.g., e.g.,
PALMER HOSPITAL) HARLEY-DAVIDSON) FRITO-LAY) DELL COMPUTER)

5. Finished goods are 5. Finished goods are made 5. Finished goods are made 5. Finished goods are build-to-
made to order and not to frequent forecasts to a forecast and stored order (BTO)
stored

6. Scheduling is complex 6. Scheduling is routine 6. Scheduling is routine 6. Sophisticated scheduling

accommodates custom
orders

7. Fixed costs are low and 7. Fixed costs are dependent 7. Fixed costs are high and 7. Fixed costs tend to be high
variable costs high on flexibility of the facility variable costs low and variable costs low

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Focused Processes
■ Focus brings efficiency

■ Focus on depth of product line rather than breadth

■ Focus can be
– Customers
– Products
– Service

– Technology.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Selection of Equipment

■ Decisions can be complex as alternate methods may be available

■ Important factors may be:

– Cost
– Cash flow
– Market stability
– Quality
– Capacity
– Flexibility.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Flexibility
■ Flexibility is the ability to respond with
little penalty in time, cost, or
customer value

■ May be a competitive advantage

■ May be difficult and expensive

■ Without it, change may mean starting

over.
Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP
 Process Analysis and Design

When analyzing and designing processes, we ask questions such as:

– Is the process designed to achieve a competitive advantage?

– Does the process eliminate steps that do not add value?

– Does the process maximize customer value?

– Will the process win orders?

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Tools for Process Analysis and Design

■ Flowchart - Shows movement of people or material

■ Time-Function Mapping - Adds time on the horizontal axis to a flowchart

■ Process Charts - Use symbols to analyze movement of people or material

■ Value-stream mapping - Expands time-function mapping to see where value is added in the entire
supply chain

■ Service blueprinting - Focuses on the customer and the provider's interaction with the customer,
and it identifies potential failure points.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 "Baseline" Time-Function Map

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

"Target" Time-Function Map

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

Process Chart

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Value-Stream Mapping Steps
1. Begin with symbols for customer, supplier, and production to ensure the big
picture
2. Enter customer order requirements
3. Calculate the daily production requirements
4. Enter the outbound shipping requirements and delivery frequency
6. Determine inbound shipping method and delivery frequencyAdd the process steps
(i.e., machine, assemble) in sequence, left to right
7. Add communication methods, add their frequency, and show the direction with
arrows
8. Add inventory quantities between every step of the entire flow
9. Determine total working time (value-added time) and delay (non-value-added
time)

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

Value-Stream Mapping

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

Service Blueprint

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

Service Blueprint

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Special Considerations for Service Process Strategies

■ Some interaction with customer is necessary, but this often

affects performance adversely.

■ The better these interactions are accommodated in the

process design, the more efficient and effective the process

■ Find the right combination of cost and customer interaction.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Service Process Matrix

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Service Process Matrix

Mass Service and Professional Service

■ Labor involvement is high

■ Focus on human resources

■ Selection and training highly

important

■ Personalized services.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Service Process Matrix
Service Factory and Service Shop:

■ Automation of standardized services

■ Restricted offerings

■ Low labor intensity responds well to

process technology and scheduling

■ Tight control required to maintain

standards.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Improving Service Productivity
■ Techniques for Improving Service Productivity
STRATEGY TECHNIQUE EXAMPLE
Separation Structuring service so customers Bank customers go to a manager
must go where the service is to open a new account, to loan
offered officers for loans, and to tellers
for deposits

Self-service Self-service so customers Supermarkets and department

examine, compare, and evaluate stores
at their own pace Internet ordering
Postponement Customizing at delivery Customizing vans at delivery
rather than at production

Focus Restricting the offerings Limited-menu restaurant

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Improving Service Productivity
■ Techniques for Improving Service Productivity
STRATEGY TECHNIQUE EXAMPLE
Modules Modular selection of service Investment and insurance
Modular production selection
Prepackaged food modules in
restaurants

Automation Separating services that may Automatic teller machines

lend themselves to some type of Ordering via an app
automation
Scheduling Precise personnel scheduling Scheduling airline ticket-counter
personnel at 15-minute
intervals
Training Clarifying the service options Investment counselor, funeral
Explaining how to avoid directors
problems After-sale maintenance
personnel
Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP
 Production Technology

■ Future of OM is increasingly tied to the collection of data from critical points.

■ Technology shrinking the cost of digital sensors, coding, and computing which
are being embedded in machinery and processes

■ Huge streams of data are captured, transmitted, cleaned, and interpreted

■ Digitalization is replacing traditional human data collection.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Production Technology includes:
1. Machine technology

2. Automatic identification systems (AISs)

3. Process control

4. Vision systems

5. Robots

6. Automated storage and retrieval systems (ASRSs)

7. Automated guided vehicles (AGVs)

8. Flexible manufacturing systems (FMSs)

9. Computer-integrated manufacturing (CIM)

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP
 1. Machine Technology

■ Increased precision, productivity, and flexibility

■ Reduced environmental impact

■ Computer numerical control (CNC)

■ Additive manufacturing produces products by adding material, not

removing it

■ Supports innovative product design, minimal custom tooling required,

minimal assembly time, low inventory, and reduced time to market.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 2. Automatic Identification Systems (AISs) and RFID

■ Improved data acquisition

■ Reduced data entry errors

■ Increased speed

■ Increased scope of process automation.

Bar codes and RFID

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 3. Process Control

■ Real-time monitoring and control of processes.

■ Process control steps:
– Sensors collect data
– Devices read data on periodic basis
– Measurements translated into digital signals, then sent to a computer
– Computer programs analyze the data
– Resulting output may take numerous forms
– Such outputs are sending signals directly to other parts of the process to
help control them.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 4. Vision Systems
■ specific aid to inspection

■ Consistently accurate

■ Never bored

■ Modest cost

■ Superior to individuals performing the same tasks.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 5. Robots
■ Perform monotonous or dangerous tasks

■ Perform tasks requiring significant

strength or endurance

■ Generally enhanced consistency and

accuracy.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 6. Automated Storage and Retrieval Systems (ASRSs)

■ Automated placement and

withdrawal of parts and products

■ Reduced errors and labor

■ Particularly useful in inventory and

test areas of manufacturing firms.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 7. Automated Guided Vehicle (AGVs)

■ Electronically guided and controlled carts

■ Used for movement of products and/or individuals.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 8. Flexible Manufacturing Systems (FMSs)

■ Computer controls both the workstation and the material handling equipment

■ Enhanced flexibility and reduced waste

■ Can economically produce low volume but high variety

■ Reduced changeover time and increased utilization

■ Stringent communication requirement between components.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 9. Computer-Integrated Manufacturing (CIM)

§ Extend flexible manufacturing

§ Backward to engineering and inventory

control

§ Forward into warehousing and shipping

§ Reducing the distinction between low-

volume/high-variety, and high-
volume/low-variety production.
Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP
 Technology in Services
Examples of Technology's Impact on Services
SERVICE INDUSTRY EXAMPLE
Debit cards, electronic funds transfer, ATM s, Internet stock trading, online
Financial Services
banking via cell phone, Apple pay
Online journals and textbooks, interactive assignments via Zoom,
Education
Blackboard, and smartphones
Automated one-person garbage trucks, optical mail scanners, flood-warning
Utilities and government
systems, meters that allow homeowners to control energy usage and costs
Wireless orders from servers to kitchen, robot butchering, transponders
Restaurants and foods
monitor traffic at drive-throughs
SERVICE INDUSTRY EXAMPLE
Communications Interactive TV, e-books, speech recognition
Hotels Electronic check-in/check-out, electronic key/lock systems, mobile Web
bookings
Wholesale/retail trade Point-of-sale (P OS) technology, e-commerce, electronic communication
between store, supplier, and customer, bar-coded data; RFID; self-
checkout; pay via facial recognition
Transportation Automatic toll booths, satellite-directed navigation systems, autonomous
automobiles
 Technology in Services
■ Examples of Technology's Impact on Services

SERVICE INDUSTRY EXAMPLE

Health care Online patient-monitoring systems, online medical information
systems, robotic surgery, artificial intelligence for medical diagnoses
Airlines Ticketless travel, scheduling, Internet purchases, boarding passes
downloaded as codes on smart phones

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Process Redesign

§ The fundamental rethinking of business processes to bring about dramatic

improvements in performance

§ Relies on reevaluating the purpose of the process and questioning both the
purpose and the underlying assumptions

§ Requires reexamination of the basic process and its objectives

§ Focuses on activities that cross functional lines

§ Any process is a candidate for redesign.

Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP

 Summary
■ Four Process Strategies

■ Selection of Equipment

■ Process Analysis and Design

■ Special Considerations for Service Process Strategies

■ Production Technology

■ Technology in Services

■ Process Redesign.
Prepared by Dr. Ousha Alshamsi, Ph.D., MEM, B. Eng, PMP