Managing the Transformation Process

Steel Manufacturing

The physical layout and the transformation process that an organization employs are critical factors for strategic operations management. This is because both the layout and, more specifically, the process transformation process (or process choice as it is sometimes called) provide massive clues about what the organization can do, as well as what it cannot do. This is important because sometimes an organization will be attracted to a market opportunity and the attempt will prove futile because the appropriate process choice is not in place. This material is found at the beginning of the chapter.

The financial factor in process technology The state of markets for most products and services means that investment in technology is seldom a question of choice of whether or not to invest; the only choice is often the type and extent of process technology investment. Large sums may be involved and there is often a significant period between the time of investment and the benefits that might be attained.

Investment in technology can provide benefits for the firm and its workforce, principally by ensuring continued operation for a plant. The firm can gain from consistent process quality and quicker changeovers (set-up), which will result in greater flexibility. Investment decisions are critical and must be made with the aim of equipping the firm or the plant to be more competitive in the market. Furthermore, wrong process choice decisions may severely reduce the company’s capability to satisfy customer demands in particular markets.

There are four basic layout types to be found in manufacturing and service settings: Fixed Layout A fixed layout is used where a product may be heavy, bulky or fragile and in this approach operators come to the product itself. The product is completed ‘on site’ and is not moved during completion. The product is centered around a particular, focused area.

Example

Process Layout In a process layout, a plant or service location has specific activities or machinery grouped together. In manufacturing this allows a range or variety of products to be made. The machines are not laid out in a particular, sequential process. Therefore, the product does not move in a specified sequence but would go to a machine centre as and when required for the particular product. The great advantage of process-oriented layouts is the flexibility in both equipment and labor assignments that they bring.

The breakdown of a particular machine will not halt an entire process and work can therefore be transferred to other machines in the department. This type of layout is ideal for manufacturing parts in small batches – or job lots – and for producing a wide range of parts in different sizes and forms.

Example

The hybrid process/product cell In manufacturing, machines or activities are grouped together in a way to best support the manufacture of a particular family of products or to provide a cluster of similar services. The variety of products or services around a particular group or ‘cell’ may be quite large, but the essential nature of the product will remain similar and will therefore warrant a cell of its own, distinct from other product family cells.

Example

Product Layout In a product layout, machines are dedicated to a particular product – or a very similar small range of products – and each stage of manufacture is distinct from the next. Each of the stations shown is laid out in an operational sequence specific to the manufacture of a particular product or the provision of a repetitious service offering.

Example

There are five basic types of process choice: Project Processes In project manufacturing environments, the nature of the products is often large-scale and complex. The designs of the products undertaken in project manufacturing are, essentially, unique by virtue of their not being repeated in exactly the same way. The distinguishing feature between project and job manufacture is that, during the process of completion, the product in project manufacture tends to be ‘fixed’.

Scheduling of projects tends to be undertaken in a ‘phased completion’ programme, where each phase of completion will be distinct and separate from other subsequent, or parallel, stages. At the simplest level of management, tools such as Gantt charts will be used. Alternatively, more complicated programmes such as project network planning will be employed.

Job Processes In manufacturing, job processes are used for ‘one-off’ or very small order requirements, similar to project process. However, the difference is that the product can often be moved during manufacture. Perceived uniqueness is often a key factor for job manufacture. The volume is very small and, as with project manufacture, the products tend to be a ‘one-off’ in terms of design; it is very unlikely that they will be repeated in the short term and therefore investment in dedicated technology for a particular product is unlikely.

Investment in automation is for general purpose process technology rather than product-specific investment. Many different products are run throughout the plant, and materials handling has to be modified and adjusted to suit many different products and types. Detailed planning will evolve around sequencing requirements for each product, capacities for each work center and order priorities; because of this, scheduling is relatively complicated, in comparison to repetitive ‘line’ manufacture.

Batch Processes As volume begins to increase, either in terms of individual products (i.e. total volume) or in the manufacture of similar ‘types’ or ‘families’ of products (i.e. greater number of products in any one group or family), the process will develop into batch manufacture. The difficulty in batch manufacturing is that competitive focus can often become blurred – management attention becomes fixed upon optimizing the batch conditions to the detriment of customer service.

The batch process is therefore often difficult to manage; the key is to map the range of products in terms of either ‘job’ or ‘line’ characteristics. Batch production may be arranged either in terms of the similarity of finished products or by common process groupings. As a starting point, each product has to be determined by its volume; focused ‘cells’ of manufacture will then be arranged so that low and high volumes can be separated. Automation, especially for lower volumes of batch manufacturing, tends to be general purpose rather than dedicated to a particular product whose volume does not demand product-specific investment in automation.

Scheduling is often complicated and has to be completely reviewed on a regular basis – this applies to new products, to ‘one-offs’ and to higher volume, standard products: all of these types will need to be scheduled. In batch production, operators have to be able to perform a number of functions. This is clearly also true for ‘job’-type processes, but in batch this flexibility is crucial, as it allows operators to move to various workstations, as and when required.

Where automation is being used, set-up times need to be short, the ideal set-up time being that necessary to accommodate run lengths of just one unit, switching over to other models and volumes as required. Batch is the most common form of process in engineering and the most difficult to manage. Only by determining the volumes of each product and dividing these into low- and high-volume sections can a company hope to be focused and, in turn, customer driven.

Line processes A line process becomes more appropriate as the volume of a particular product increases, leading to greater standardization than in low batch volumes. Each stage of manufacture will be distinct from the next; value and cost are added at each stage of manufacture until the product is completed. The line is dedicated to a particular product (with possible variations of models) and introducing new products that are significantly different from the former product is difficult or even impossible to realize on an existing line manufacturing process.

Individual operation process times should be short – in order to satisfy delivery expectations. Competitive advantages may be gained from simplification in production planning and control, and the tasks themselves should also be simplified for each workstation. In line production, there should only be very small amounts of work in process: where it does exist, it represents a poorly balanced line loading and is seen as a signal for necessary improvement.

Continuous processes This is used when a process can (or must) run all day for each day of the year, on a continuous basis. The volume of the product is typically very high and the process is dedicated to making only one product. Huge investment in dedicated plant is often required. Much automation tends to be evident and labor input is one of ‘policing’ rather than being highly skilled as an integral input to the overall process.

Matrices Used in Service The Schmenner matrix links the extent of customization with the level of labor input in the transformation process. As Schmenner observes, however, a service, although essentially rooted within a particular quadrant, may wander into other quadrants, consciously or otherwise.

The Schmenner matrix is of further use because not only does it help to map the actual nature of the service, it also provides indications of the challenges that managers will face as a result of being positioned within a particular service type.

The Lovelock matrix helps us to understand the diverse nature of services, including the issue that, in some cases, customers must be physically present to receive services (where they are directed at their bodies or minds), but need not be present to receive other services (directed at goods or intangible assets). This will have a major impact on service design, especially the design of service facilities.

Lovelock stated how important it is to see the dimensions of ‘who does what’ against the number of sites involved in the service transfer.