Management in Organisations Process Design
What is process design ? The differentiation between manufacturing and service design. When is process design required ? 1 Topics to be covered The Service package / Service Triangle Developing a service delivery system Manufacturing process alternatives and their evaluating criteria. The effects of product life cycles on process design.
A new or substantially modified product or service is being offered. Competitive priorities have changed. Demand or volume for a product is changing. Current performance is inadequate. Competitors are gaining a competitive advantage either by process or technology change. The cost or availability of inputs has changed. Process design or redesign decisions must be made when:
Process design is the selection of Schroeder, section 3 - page 165 However, these must be consistent with the positioning strategy Manufacturing Process Service Operations Design Choice of Technology Process Flow Analysis Layout of Facilities
Seven distinctive characteristics of service operations
Customer as a participant in the service process Presence of the customer Customer as an active player
Simultaneous production and consumption Precludes inventory Service capacity Quality problems
Time perishable resource Lost opportunity Variable demand options a)Smooth demand b)Adjust Service Capacity c)Allow customers to wait
Site location dictated by customer Scales of economy Control of services
Labour intensiveness Skill turnover Moments of truth
Intangibility Difficulty in measuring output Ideas and concepts Service charters
Process Design Services
The Service Triangle Service Strategy Customer Workforce System Adapted from Abrecht and Zemke 1985
Service Strategy Customer Workforce System Execution Adapted from Abrecht and Zemke 1985 Promotion Product Needs Job Design Rewards System Staff Skills & Image Facility Location Layout Image Capacity Front Back- Room Split The Service Triangle
The Service Package (orBundle) consists of the following 4 features: 1Supporting Facility. 2Facilitating goods. 3Sensual benefits or Explicit services 4Psychological benefits or Implicit services
Supporting Facility Architectural appropriateness Interior decorating Facility layout Supporting equipment
Facilitating goods Consistency Quantity Selection
Explicit services Training of service personnel Comprehensiveness Consistency Availability
Implicit services Attitude of service personnel Privacy and security convenience Atmosphere Waiting Status Sense of well-being
Accumulation of information Design of conceptual alternatives Design and testing of prototypes Final design and specification The major steps in service design are:
Variety Process types in Services High Low Volume LowHigh
Process Design Manufacturing
Project / Jobbing Batch / Intermittent Flow / Line There are three main types of manufacturing process :
Process types in Manufacturing Jobbing Flow Batch High Low High Volumes Variety
The Product/Process Matrix Jumbled flow (job shop) Disconnected line flow (batch) Connected line flow (assembly line ) Continuous flow) PROCESS CHARACTERISTICS Low volume Low standardization INCREASING VARIETY Low volume Multiple products Higher volume Few major products High volume High standardization INCREASING VOLUME PRODUCT CHARACTERISTICS Project Jobbing Batch Mass Continuous
£ Volume Least Cost Envelope Schroeder, figure page 178 Project
Capital Intensity Organisational implications Product or service Implications Resource flexibility Whether manufacturing or mass service situations, operations managers must address 4 common facets of process design
Task - 10 mins Identify one Manufacturing and one Service example. Outline their process characteristics highlighting the relevant Capital, Organisational, Product/Service, and Resource Flexibility implications
Vertical integration AIdentify examples of forward and backward integration B The oil Industry is heavily integrated vertically. What are the possible reasons for this?
Product Life Cycle Emphasis of operations during the life cycle