1. Process Technology Strategy

2. Performance objectives Resource Usage
Quality
Performance objectives
Dependability
Development
and Organization
Speed
Flexibility
Cost
Resource Usage
Market Competitiveness
Decision areas
Issues covered in this chapter
Capacity
Supply Network
Process Technology definition and characteristics
Issues include:
The impact of process technologies on operations
Understanding the general characteristics of process technologies over time
The effect of new forms of technology on performance

4. Indirect process technology
Information
Indirect process technology
Infrastructural services
Direct process technology
Materials Information Customers
Products and services
Direct and indirect process technology
Inventory systems in retailing
Yield planning and pricing in Hotels/Airlines
Knowledge databases in consulting

5. Information Processing
Material Processing
Information Processing
Customer Processing
CNC machines
Optical character recognition machines
Surgical equipment
Baking ovens
Bar code readers
Medical diagnostic equipment
Automatic vending machines
MIS
Hotels
Material handling equipment
GPS
Body scanners
Vehicles
Search engines
Aircrafts
Warehouses
Online information systems
MRTS

6. Volume and Variety

7. Scale is usually an important dimension of process technology
LOW
HIGH
Many, small units of process technology
Issues:
Lower capital costs
Demand matching
Failure redundancy
Upgrading easier
Fewer, larger units of process technology
Higher capital costs
Economies of scale
Vulnerable to failure
‘All or nothing’ change
Scale is usually an important dimension of process technology
Many, small units
Few, large units

8. In some technologies scalability is as important as scale
Scale vs. Scalability
SCALABILITY
LOW
HIGH
Issues:
Bespoke, legacy systems
Specific expertise required
Idiosyncratic processes
In-house
Reliable architecture
Dispersed system skills
Standard processes
Outsourced?
In some technologies scalability is as important as scale

9. Automation is usually an important dimension of process technology
HIGH
LOW
Labor Intensive
Issues include:
Higher direct costs
Control intensive
Human creativity
Capital Intensive
Lower direct costs
Design intensive
Maintenance costs
Automation is usually an important dimension of process technology
Low acuity and judgement
High acuity and judgement

10. Automation vs. Analytical Content
LOW
HIGH
Low analytical resource
Issues include….
Lower capital cost
Simple sequential rules
Data input predominates
Often single point of connection
High analytical resource
Higher capital cost
Parallel processing
Data manipulation (expert systems, artificial intelligence (AI) etc.)
Complex connectivity
‘Analytical content’ is the equivalent of automation for information-rich technologies

11. Coupling COUPLING HIGH LOW
The degree of coupling between individual units is usually an important dimension of process technology
Integrated Rigid
Loose Separated
Stand-alone
Issues include:
Lower capital costs
Fragmentation or flexibility?
Control flexibility
System robustness
Integrated
Higher capital costs
Speed or rigidity?
Designed synchronisation
System efficiency

12. Coupling vs. Connectivity
LOW
HIGH
Low connectivity
Issues include:
Customized, legacy systems (black-box)
Hard-wired
Restricted access
High connectivity
Platform independence (HTML, Java etc.)
Bandwidth available
Reliable middleware
Security concerns
The degree of connectivity is the equivalent of coupling in information-rich technologies

13. The three dimensions of process technology are often closely linked
COUPLING
HIGH
LOW
Integrated
Rigid
Loose
Separated
AUTOMATION
Low acuity and judgment
High acuity and judgement
SCALE
Few, large units
Many, small units
Flexibility performance
Cost performance

14. The product-process matrix and the technology dimensions
Market requirements
Low volume
High variety
High volume
Low variety
High
Cost
Low
Flexibility A B C
Off the diagonal
high flexibility
redundant capability
high costs
low flexibility
insufficient capability
Coupling
Automation
Scale
Loose Separated
High acuity and judgement
Many, small units
Integrated Rigid
Low acuity and judgement
Few, large, units

15. Increasing automation Increasing coupling Low volume High variety
Moving down the diagonal of the product-process matrix in retail banking
[1]
[2]
[3]
Increasing scale
Increasing automation
Increasing coupling
Low volume
High variety
High volume
Low variety
Individual branches
Voucher processing centers

16. Market fragmentation making flexibility more valuable
Low
Flexibility
High
Cost
Market fragmentation making flexibility more valuable
Competitive pressure to reduce costs
Market pressures are requiring operations to be both flexible and low cost