Chapter 8 Process technology Corbis

Layout and flow Operations strategy Process design Design Improvement Supply network design Layout and flow Process technology People, jobs and organization Product/service design Planning and control

Key operations questions In Chapter 8 – Process technology – Slack et al. identify the following key questions: What is process technology? How does one gain an understanding of process technologies? How are process technologies evaluated? How are process technologies implemented?

Pilotless technology for aircraft What are the operations-related advantages and disadvantages of pilotless technology? What are the market-related advantages and disadvantages of pilotless technology? How would you overcome the disadvantages of pilotless technology?

Material, information or customer process technologies Manual machine tools Material processing technology Automated scheduling system Information processing technology Milking machines (cows are customers too!) Customer processing technology Baggage handling systems Mail processing system Electronic point of sale systems Global positioning system

Robots are used in this example because of the hazardous environment in which the tasks take place What other examples can you think of where the safety of operators is the major motivation for investment in robot technology?

Examples of materials-processing technology CNC machine tool Industrial robot Automatic guided vehicle (AGV). Flexible manufacturing system (FMS) Computer integrated manufacturing (CIM)

Technology helps recovery from Hurricane Katrina How did IBM’s use of communications technology improve the recovery operation after Hurricane Katrina?

Technology and processing costs 100% 100% Branch 80% Cost per banking transaction 60% 50% Telephone 40% 25% Cash machine 20% 12% Internet 9

Radio Frequency Identification (RFID) Control system Network translates ePC code into useful information that can be used for monitoring and process control Internet or other network F132.C225.DF2B12CV ePC Code, a unique number 96 bits long Smart Tag, microchip with antenna that transmits ePC code Reader senses item and transmits ePC code to network Operations process

Some applications of e-business to operations Organizational tasks E-business applications and/or contributions E-business tools and systems Design Customer feedback, research on customer requirements, product design, quality function deployment, data mining and warehousing WWW-integrated CAD, Hyperlinks, 3D navigation, Internet for data and information exchange Purchasing Ordering, fund transfer, supplier selection EDI, Internet-purchasing, EFT Supplier development Partnership, supplier development WWW-assisted supplier selection, communication using Internet (e-mails), research on suppliers and products with WWW and intelligent agents Human resource management E-recruiting, benefit selection and management, training and education using WWW E-mails, interactive web sites, WWW-based multimedia applications Production Production planning and control, scheduling, inventory management, quality control B2B e-business, MRP, ERP, SAP, BAAN, Peoplesoft, IBM e-business (web-integrated) Marketing/ sales and customer service Product promotion, new sales channels, direct savings, reduced cycle time, customer services, Internet sales, selection of distribution channels, transportation, scheduling, third-party logistics B2B e-business, Internet ordering, Website for the company Electronic funds transfer, On-line TPS, Bar-coding system, ERP, WWW integrated inventory management, Internet delivery of products and services Warehousing Inventory management, forecasting, scheduling of work force EDI, EFT, WWW-integrated inventory management

Type of interaction between the customer and the technology Types of customer processing technology Type of interaction between the customer and the technology Examples Active interaction with the technology Mobile phone services Internet-based ordering E-mail Cash machines Passive interaction with the technology Transport systems Theme park rides Automatic car wash Hidden interaction with the technology Security cameras Retail scanners Credit card tracking Interaction with the technology through an intermediary Call centre technology Travel shop’s booking system

Using RFID in healthcare This shows the use of RFID technology in a hospital to refer patient’s records. How might it affect the hospital’s process performance?

Customer-processing technology – Active interaction with technology Examples Personal communications Internet-based ordering Cash machines

Customer-processing technology – Passive interaction with technology Examples Transport systems Theme park rides Car wash

Customer-processing technology – Hidden interaction with technology Examples Security cameras Retail scanners Credit card tracking

Technology Customer Intermediary Customer-processing technology – Use of technology through an intermediary Customer Technology Intermediary Examples Call centre technology Travel agent booking system Hotel reservation system

Customer-processing technologies Customers Back office Front office Back-office technology Front-office technology with links to the Back office Front-office technology

Cows are also customers What advantages do you think the technology described above gives? Do you think the cows mind? Why do you think the farmer still goes to watch the process?

QB House speeds up the cut ‘Why not create a no-frills barber’s shop where the customer could get a haircut in ten minutes at a cost of 1,000 Yen?’ How does QB House compete compared with conventional hairdressers? In what way does technology help QB House to keep its costs down?

Categorizing process technologies Process technologies can be categorized using three dimensions: the extent to which they vary in their degree of automation; the extent to which they vary in their scale; the extent to which they vary in their degree of integration.

Different process technologies are appropriate for different volume–variety combinations High Variety Low Coupling/ connectivity Scale/ scalability Automation Low Volume High Broad/ unconstrained Narrow/ constrained Manual, general-purpose, small-scale, flexible technology Low High Low High Automated, dedicated, large-scale, relatively inflexible technology

Learning potential depends on both technological resource and process ‘distance’ Potential for learning is relatively high Potential for learning is limited – too many things change Process modification Process extension Process development Process pioneer Process distance Resource distance Technological modification Technological extension Technological development Technological pioneer

Reduced performance during with implementation of new processes reflects ‘adjustments costs’ Planned performance Start of implementation New technology planned to be on-stream Forecast performance Actual performance Operations performance (Quality levels) Planned implementation period Time