Process Selection

Process selection refers to the way an organization chooses to produce or provide its
goods or services. Essentially it involves choice of technology and related issues, and it has major
implications for capacity planning, layout of facilities, equipment, and design of work systems.

Process Selection and Systems design

Forecasting Capacity Planning

Facilities and Equipment

Process Selection

Layout

Product
and
Service Design Work Design

MAKE OR BUY DECISION

An important issue that must be addressed is the make-or-buy decision. A company must
decide if it is going to perform the actual manufacturing operations or contract with another
company to be a supplier.

If the company uses only a few units of a particular item and special equipment is needed to
produce it, the company probably will look for a vendor.

Some companies both make and buy to ensure that they will have a source of supply if the
vendor has a strike or goes out of business. Several factors are involved in the make-or-buy
decision.

The decision to obtain supplies and components from outside, either by subcontracting or by
purchasing components from vendors, enables a company to utilize its own capacity for other
purposes. On the other hand, it also makes a company dependent on the vendor’s effectiveness
in such as scheduling and quality control

Some of those factors that may lead a company to make or buy a product or component are:

1. Cost considerations (savings)

2. Available capacity
3. Assurance of availability.
4. Opportunity to control quality / quality considerations
5. Availability of equipment and expertise.
6. Desire to preserve confidentiality.
7. The nature of demand
PROCESS CHOICE DECISIONS
Firms generally produce either in response to customer orders and demand or in anticipation of
them. This leads to three major types of goods and services: custom, option-oriented, and
standard.

Custom or make to order, goods and services are generally produced and delivered as one of a
kind or in small quantities, and are designed to meet specific customers’ specifications. Examples
include ships, internet sites, weddings, taxi service, buildings and surgery. Because custom goods
and services are produced on demand, the customer must wait for them, often for a long time
because the good or service must be designed, created, and delivered.

Option or assemble-to-order, goods and services are configurations of standard parts,

subassemblies, or services that can be selected by customers from a limited set. Common
examples are Dell computers, Subway sandwiches, machine tools, and travel agent services.
Although the customer chooses how the goods and services are configured, any unique technical
specifications or requirements cannot generally be accommodated.

Standard or make to stock, goods and services are made according to a fixed design, and the
customer has no options from which to choose. Appliances, shoes, sporting goods, credit cards,
online Web based courses, and bus service are some examples. Standard goods are made in
anticipation of customer demand and stocked in inventory, and therefore are usually available,
although in some cases the proper color or size might be out of stock.

Types of Production System

1. PROJECTS are large scale, customized initiatives that consist of many smaller tasks and
activities that must be coordinated and completed to finish on time within budget. Some
examples of projects are legal defense preparation, construction, and software
development. Projects are often used for custom goods and services, and occasionally for
standardized products such as “market homes” that are built from a standard design.

2. JOB SHOP is organized around particular types of general-purpose equipment that are
flexible and capable of customizing work for individual customers. Job shops produce a
wide variety of goods and services, often in small quantities. Thus, they are often used for
custom or option type of products. In job shops, customer orders are generally processed
in batches, and different orders may require a different sequence of processing steps and
movement to different work areas.

3. CONTINUOUS FLOW creates highly standardized goods and services, usually around
the clock in very high volumes. Examples of continuous flow processes are automated car
washes, paper and steel mills, paint factories, and many electronic, information-intensive
services such as credit cared authorizations and security systems. The sequence of work
tasks is very rigid and the processes use highly specialized, automated equipment that is
often controlled by computers with minimal human oversight.

4. FLOW SHOP are organized around a fixed sequence activities and process steps, such as
an assembly line, to produce a limited variety of similar goods or services. An assembly
 line is a common example of a flow shop process. Many large-volume, option-oriented
and standard goods and services are produced in flow shop settings. Some common
examples are automobiles, appliances, insurance policies, checking account statements,
and hospital laboratory work. Flow shops tend to use highly productive specialized
equipment and computer software.

Automation

Automation is the substitution of machinery for human labor. The machinery includes sensing
and control devices that enable it to operate automatically.

Computer – Aided Manufacturing (CAM)

Refers to the use of computers in process control, ranging from numerically controlled machines
to robots to automated assemble systems. These systems replace human functions with machine
functions.

Flexible Manufacturing System (FMS)

Flexible Manufacturing System (FMS) is a group of machines including supervisory computer

control, automatic material handling, and possibly robots or other automated processing
equipment. Reprogrammable controllers enable these systems to produce a variety of similar
products. Systems may range to handle intermittent processing requirements with some of the
benefits of automation and with some of the flexibility of individual m, or stand alone, machines.

FACILITIES LAYOUT

When designing a facility layout, business owners must take into account the product they
are producing. The facility layout is actually very dependent on the product being made. We
define a facility layout as the arrangement of the machines and other equipment used in the
facility.

Layout confers the configuration of departments, work centers, and equipment with
particular emphasis on the movement of work (customers or material) through the system. Both
layout and location decisions affect capacity. Conversely efforts to increase capacity may involve
modifications in layout and changes in location. Moreover, anytime a new location is established,
or products or services are introduces or changed, there are layout implications.

Reasons why layout Decisions are Important

1. They require substantial investments of both money and effort

2. They involve long term commitments, which mistakes are difficult to overcome
3. They have a significant impact on the cost and efficiency of short term operations.
 PLANT LAYOUT FOR CAPSULE MANUFACTURING DEPARTMENT

Basic
Layout
Types

There
are three
types of
layouts,
and
these

correspond roughly to the three types of processing systems.

- Product layouts are most conductive to repetitive processing/continuous processing,

contonuous production or flow shop
- Process layouts are used for job shop production
- Fixed position layouts are used when projects require layouts.

- 1. Product Layouts (for repetitive processing/continuous processing, continuous

production or flow shop)
 Product layouts are used to achieve a smooth and rapid flow of large volumes of products
or customer through a system. This is made possible by highly standardized products or services
that require highly standardized (repetitive) processing operations. A job is divided into a series
of standardized tasks, permitting specialization of both labor and equipment.

Product layouts achieve a high degree of both labor and equipment utilization and that
tends to offset the high equipment cost usually associated with this type of layout. Because items
move quickly from operation to operation, investment in work in process is often minimal.
However, operations are so closely tied to each other than the entire system has a high vulnerably
to being shut down due to either mechanical failure or high absenteeism.

A flow line for production or service under Product Layout

(Begin) Work Flow (End)

Raw Materials Finished

S1 S2 S3 S4
Item
Or

Customer

Materials

And / or labor

Examples

Layout for a Canteen

Tray,

Bread
Spoon Main
Soup Salads Desserts Vegetables Beverages Cashier
and fork course
Rolls
 Car Wash Layout

RECEIVING SOAPING WASHING

DRYING

CASHIER

ASSEMBLY LINE FOR PRODUCT X

2. PROCESS LAYOUTS (Job shop or unit production)

Process layouts are designed to facilitate processing items or providing services that present
variations in their processing requirements. The layouts feature departments or other functional
groupings in which similar kinds of activities are performed.
 3. FIXED POSITION LAYOUT (for project)
The item being worked in remains stationary, and workers, materials and equipment are
moved about as needed. It is used in large construction projects, shipbuilding and production
of large aircraft and the rockets used to launch space omissions.

FIXED POSITION LAY OUT

HOUSE CONSTRUCTION