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22 views7 pages

BM60116 - Slides 12.0

Uploaded by

kmrrahul8195
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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13-02-2024

BM60116 – Modeling in Operations Management

Process Selection and Facility


Layout Decisions

Sushil Punia
VGSOM, IIT KGP

Jan-May 2024

Agenda
• Process Strategies
• Types of processes

• Facility Decisions
• Layouts decisions
• Location decisions

1
13-02-2024

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

Objective:
Produce goods and services within cost and
managerial constraints.

• Long-term decisions –and impacts


• Cost and quality of products
• Flexibility and efficiency of production units

Process Strategies
• Volume and Variety dictates the process strategies

Four Basic Process Strategies:


1) Process-focus Strategy,

2) Product-focus Strategy,

3) Repetition-focus Strategy, and

4) Mass Customization Strategy.

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13-02-2024

Process Focus Strategy (low volume, high variety)


e.g. Hospitals

 Facilities are organized around


processes
 Intermittent processes
 Uses general purpose equipment
and skilled personnel
 High product flexibility
 High costs
 Low equipment utilization

Repetitive Focus Strategy (high volume, low variety)


e.g. Automobile

 Facilities organized as assembly lines


 Use pre-fabricated modules - parts
and assemblies
 Many output options
 Less flexibility but more efficient than
process-focused facilities

Used in fast-food restaurants, etc.


6

3
13-02-2024

Product Focus Strategy (very high volume, very


low variety)
e.g. Refinery, etc.

 Facilities are organized by


product
 Continuous production
 Long runs
 Typically high fixed cost but low
variable cost
 Less skilled labor
 Inflexible but high efficiency

(high-volume, high-variety)
Mass Customization Strategy e.g. Dell Computer

 Rapid, low-cost production


 High variety products
 Flexibility of a process focus with
the efficiency of a product focus

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13-02-2024

Mass Customization Strategy


The concept of customization is based on direct influence by the customer
on one or more operational activities.

Source: Lampel J, Mintzberg H (1996) Customizing customization. Sloan Manage Rev 38(1):21–30 9

The case of LEGO


Reading.

Photo: LEGO 10

5
13-02-2024

Competencies for Mass Customization


 Customer integration
 Product configuration systems
 Product modularity
 Central production and logistics planning
 Management of mass and individual production
 Flexible organization and processes
 Process documentation and IT support.

11
From Moser K (2007) Mass customization strategies—development of a competence-based framework for identifying different mass customization strategies. Lulu Enterprises, Inc., USA

Product–Process Matrix: Process Selection


High
Variety
Low

12

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13-02-2024

Process Layouts
In order to implement process types, we need to place resources in some
fashions that is called layouts.

• Project layout (e.g. Ship manufacturing)

• Job shop (ex. Copy center making a single copy of a report)

• Batch shop (ex. Copy center making 10,000 copies of an ad


piece for a business)

• Assembly Line (ex. Automobile manufacturer)

• Continuous Flow (ex. Petroleum production)

13

Thanks.

43

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