OPERATIONS & TECHNOLOGY MANAGEMENT (JMP 5023) Designing Manufacturing and Service Processes Facility Design & Layout

Three Types of Goods and Services 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.

Three Types of Goods and Services 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.

Three Types of Goods and Services 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.

Four Types of Processes 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 and within budget. Characteristics: one-of-a-kind, large scale, complex, resources brought to site, wide variation in specs and tasks. Examples of projects: legal defense preparation, construction, customer jewelry, consulting, and software development.

Four Types of Processes Job shop processes are organized around particular types of general-purpose equipment that are flexible and capable of customizing work for individual customers. Characteristics: Significant setup and/or changeover time, batching, low to moderate volume, many routes, many different products, high work force skills, and customized to customer’s specs. Examples: Many small manufacturing companies are set up as job shops, as are hospitals, legal services, and some restaurants.

Four Types of Processes 3. Flow shop processes are organized around a fixed sequence of activities and process steps such as an assembly line to produce a limited variety of similar goods or services. Characteristics: Little or no setup time, dedicated to small range of goods or services that are similar, similar sequence of process steps, moderate to high volume.

Four Types of Processes Flowshops continued An assembly line is a common example of a flow shop process. Many option-oriented and standard goods and services are produced in flow-shop settings. Examples: automobiles, appliances, insurance policies, checking account statements, and hospital laboratory work.

Four Types of Processes A continuous flow process creates highly standardized goods or services, usually around the clock in very high volumes. Characteristics: not made from discrete parts, very high volumes in a fixed processing sequence, high investment in system, 24hour/7day continuous operation, automated, dedicated to a small range of goods or services. Examples: chemical, gasoline, paint, toy, steel factories; electronic funds transfer, credit card authorizations, and automated car wash.

Charac-teristics of Different Process Types

Product-Process Matrix

Process Choice in Services The product-process matrix does not transfer well to service businesses and processes. In the product-process matrix, product volume, the number of products, and the degree of standardization/customization determine the manufacturing process that should be used. This relationship between volume and process is not found in many service businesses.

Service Positioning Matrix The service encounter activity sequence consists of all the process steps and associated service encounters necessary to complete a service transaction and fulfill customer’s wants and needs.

The Service Positioning Matrix

Service Positioning Matrix The position along the horizontal-axis of the Service-Positioning Matrix is described by the sequence of service encounters. It depends on two things: The degree of customer discretion, freedom, and decision-making power in selecting their service encounter activity sequence. The degree of repeatability of the service encounter activity sequence.

Process Design and Flowcharting A process map (flowchart) describes the sequence of all process activities and tasks necessary to create and deliver a desired output or outcome. A process map can include the flow of goods, people, information, or other entities, as well as decisions that must be made and tasks that are performed. Process maps document how work either is, or should be, accomplished, and how the transformation process creates value. Process maps delineate the boundaries of a process. A process boundary is the beginning or end of a process.

Restaurant Order Posting and Fulfillment Process

Value Stream Mapping & Flowcharting The value stream refers to all value-added activities involved in designing, producing, and delivering goods and services to customers. A value stream map (VSM) shows the process flows in a manner similar to a traditional process flowchart or service blueprint. Traditional flowcharting, service blueprinting, and value stream mapping all try to analyze wait and process times, bottleneck work stations, process throughput, and so on.

Process Analysis and Improvement Few processes are designed from scratch. Many process design activities involve re-designing an existing process to improve performance. Management strategies to improve process designs usually focus on one or more of the following: Increasing revenue by improving process efficiency in creating goods and services and delivery of the customer benefit package. Increasing agility by improving flexibility and response to changes in demand and customer expectations.

Facility Design and Layout Facility layout refers to the specific arrangement of physical facilities. Facility Layout studies are necessary whenever: (1) a new facility is constructed, (2) there is a significant change in demand or throughput volume, (3) a new good or service is introduced to the customer benefit package, or (4) different processes, equipment, and/or technology are installed.

Facility Design and Layout Types of Facility Layouts A product layout is an arrangement based on the sequence of operations that are performed during the manufacturing of a good or delivery of a service.

Facility Design and Layout Types of Facility Layouts Product Layout Advantages of product layouts include lower work-in-process inventories, shorter processing times, less material handling, lower labor skills, and simple planning and control systems. Disadvantages include a breakdown at one workstation can cause the entire process to shut down, a change in product design or the introduction of new products may require major changes in the layout, and little job satisfaction.

Types of Facility Layouts Facility Design and Layout Types of Facility Layouts A process layout consists of a functional grouping of equipment or activities that do similar work.

Facility Design and Layout Types of Facility Layouts Process Layout Advantages of product layouts include a lower investment in general purpose equipment, and the diversity of jobs inherent in a process layout can lead to increased worker satisfaction. Disadvantages include high movement and transportation costs, more complicated planning and control systems, longer total processing time, higher in-process inventory or waiting time, and higher worker-skill requirements.

Process Layout for a Machine Shop

Facility Design and Layout Cellular/Group Layout Group technology, or cellular manufacturing, classifies parts into families so that efficient mass-production-type layouts can be designed for the families of goods or services. In a group, or cellular, layout, the design is not according to the functional characteristics of equipment, but rather by groups of different equipment (called cells) needed for producing families of goods or services.

Cellular/Group Layout Facility Design and Layout Cellular/Group Layout Group layouts are used to centralize people expertise and equipment capability. Examples: groups of different equipment (called cells) needed for producing families of goods or services, group legal (labor law, bankruptcy, divorce, etc.) or medical specialties (maternity, oncology, surgery, etc.).

Cellular Manufacturing Layout Source: E. Paul Degarmo, J. T. Black, and Ronald A. Kosher, Materials and Processes in Manufacturing, 9th Edition, John Wiley & Sons, 2003.

Group Layout Based on Part Families

Facility Design and Layout A fixed-position layout consolidates the resources necessary to manufacture a good or deliver a service, such as people, materials, and equipment, in one physical location. The production of large items such as heavy machine tools, airplanes, buildings, locomotives, and ships is usually accomplished in a fixed position layout.

Fixed-position layout Facility Design and Layout Fixed-position layout This fixed-position layout is synonymous with the "project" classification of processes. Service-providing firms also use fixed-position layouts; examples include major hardware and software installations, sporting events, and concerts.

Comparison of Basic Layout Patterns