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8 views

OM Chapter 2 Process View of OM

Uploaded by

Pranav Indulkar
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© © All Rights Reserved
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Chapter 2: Process View of Operations

1. Process Choice Decisions

Operations managers need to decide the best type of process for their production system. The
choice depends on factors such as the variety of products, the volume of production, and
customization levels.

Types of Process Choices:

 Projects: Unique, complex operations with specific objectives and deadlines. Often
large-scale and resource-intensive.
o Example: The construction of the Burj Khalifa in Dubai was a project
involving thousands of workers and years of planning and execution.
o Case Study: The NASA Apollo Space Program was a massive project that
involved various government agencies, private contractors, and teams of
engineers to achieve the objective of landing a man on the moon.
 Job Shop: Produces small batches of customized products, often for specific
customers. Each product is unique, and the production process is highly flexible.
o Example: A custom furniture maker producing bespoke tables and chairs
based on individual orders.
o Case Study: General Electric's Custom Engine Division uses a job shop
process to build specialized engines for airplanes. This requires high flexibility
and customization based on each client’s specifications.
 Flow Shop: Standardized products are produced in high volume, with each item
following the same sequence of operations.
o Example: Ford's assembly line for automobiles is a classic example, where
each car goes through the same production steps in a linear fashion.
o Case Study: Toyota Production System revolutionized flow shop processes by
introducing the just-in-time (JIT) system, which reduced inventory and
improved efficiency.
 Continuous Flow: Operations are highly standardized, and the production process
runs 24/7. It’s designed for products that are homogenous and produced in high
volumes.
o Example: Oil refineries use continuous flow processes to produce gasoline
and other petroleum products.
o Case Study: Shell’s Refinery Operations in Rotterdam, the Netherlands,
operate continuously to ensure the efficient production of fuel and other
petroleum derivatives, managing complex operations 24/7.

2. Product-Process Matrix

This matrix helps companies determine the best process strategy by analyzing the relationship
between product volume and variety.

 Low Volume, High Variety: Suited for Job Shops.


o Example: Boeing’s production of customized aircrafts. Each aircraft is built
based on specific customer requirements, making the process highly variable.
 High Volume, Low Variety: Suited for Continuous Flow.
o Example: Coca-Cola’s bottling plants, which produce millions of bottles of
soft drinks daily, follow a highly standardized, continuous process.

Case Study: Dell Computers initially operated as a job shop, building computers to order
based on customer specifications. However, as demand for standardized models increased,
Dell shifted toward a flow shop model for certain product lines, improving efficiency while
still offering customization options for high-end clients.

3. Process Design

Designing an efficient production process is key to minimizing costs and maximizing output.
Effective process design varies between manufacturing and service industries.

Manufacturing Process Design:

 Example: In Tesla's Gigafactory, the design of the assembly line ensures that electric
vehicle batteries are produced with minimal waste, using robotics and automated
systems to optimize precision and speed.

Service Process Design:

 Example: In the Uber app, the process of booking a ride has been streamlined to
improve user experience. The process starts with a customer booking a ride and ends
with feedback collection, ensuring the seamless delivery of services.

Case Study: McDonald's revolutionized fast food by applying process design to its kitchen
operations. By breaking down each task (e.g., burger preparation, fries cooking) into
standardized steps, McDonald's was able to serve food quickly and consistently across
thousands of locations globally.

4. Process Map (Flow Chart)

A flowchart provides a visual representation of the entire production process, helping


managers identify bottlenecks or inefficiencies.

Example of a Process Flow Chart in Manufacturing:

 In a Car Manufacturing Process: Raw Materials → Welding → Assembly →


Quality Control → Painting → Packaging → Delivery.
 Case Study: Boeing’s Dreamliner Assembly Line uses process flow charts to monitor
every stage of aircraft production. Each section of the plane (e.g., fuselage, wings) is
assembled in different locations globally and brought together for final assembly.

Example of a Service Process Flow:

 In a Restaurant: Customer Order → Kitchen Preparation → Food Delivery →


Payment.
 Case Study: Starbucks uses process maps to optimize customer service, from
ordering to delivery. By analyzing the flow of operations, Starbucks minimized
waiting times and improved the efficiency of its baristas.

5. Process Analysis and Improvement

Analyzing each step of a process helps identify inefficiencies and areas for improvement.
Various tools and methods are used for analysis, followed by improvements to increase
efficiency.

Process Improvement Techniques:

 Lean Manufacturing: Focuses on minimizing waste in production while maximizing


productivity.
o Example: Nike implemented lean manufacturing techniques across its global
supply chain to reduce waste and lower costs. By focusing on continuous
improvement, they were able to decrease defects and reduce lead times.
 Six Sigma: Uses data-driven methods to eliminate defects and improve quality.
o Example: Motorola pioneered Six Sigma to improve product quality by
identifying and removing causes of defects in their production processes.

Case Study: Toyota implemented lean manufacturing and continuous improvement (Kaizen)
to streamline operations, reduce inventory, and improve product quality. This allowed Toyota
to become one of the largest and most efficient car manufacturers in the world.

6. Process Improvement Tools:

 Flowcharts: Used to visualize each step of the process.


o Example: A clothing manufacturer might use a flowchart to track the stages
from fabric cutting to garment stitching and packaging.
 Cause and Effect Diagrams: Also known as Fishbone diagrams, these help identify
the root causes of a problem.
o Example: If a bakery is experiencing delayed orders, a cause and effect
diagram might reveal that the delays are caused by inefficiencies in the dough
preparation process.
 Pareto Charts: These charts prioritize issues based on their frequency and impact,
helping managers focus on the most significant problems.
o Example: A Pareto chart used in a hospital might show that the majority of
patient complaints come from delays in emergency room services, prompting
managers to focus on speeding up ER processes.

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