1. 1 Process Design

2. 2 Design the product or service Design the processes that produce the product or service interaction The design of products/services and the processes are interrelated and should be treated together

3. 3 Design Criteria for assessing design options Does the option satisfy the performance criteria which the design is trying to achieve? Will our customers want it? Good ROI? Acceptability: Do we want to do it? Do we have the skills (quantity or resources) to cope with this option? Do we have the organizational capacity (quantity or resources) to cope with this option? Do we have the financial resources to cope with this option? Feasibility: Can we do it? Do we understand the full consequences of adopting the option? Being pessimistic, what could go wrong if we adopt the option? What would be the consequences of everything going wrong? Vulnerability: Do we want to take the risk?

4. 4 Engineer to Order Make to Order Make for stock Assemble to Order Types of Operations Systems (manufacturing) Variations in demand

5. 5 MANUFACTUREASSEMBLESHIPINVENTORY DELIVERY LEAD TIME MANUFACTUREASSEMBLESHIPINVENTORY DELIVERY LEAD TIME INVENTORYMANUFACTUREASSEMBLESHIP DELIVERY LEAD TIME DESIGNPURCHASEMANUFACTUREASSEMBLESHIP DELIVERY LEAD TIME Assemble- To-Order Make-To -Stock Make – To-Order Engineer- To-Order Types of Operations Systems (manufacturing) Variations in demand

6. 6 In order of increasing volume and decreasing variety: project process jobbing process batch process mass process continuous process PROCESS TYPES – manufacturing

7. 7 Batch operations [most operations] Mass or continuous [car assemble, refinery] Job shop [tailor] Project [Bridge construction] Volume Variety Flexibility PROCESS TYPES – manufacturing

8. 8 Batch operation s [most operations] Mass or continuous [car assemble, refinery] Job shop [tailor] Project [Bridge construction] Volume Variety Flexibility PROCESS TYPES – manufacturing QUESTION – which type? Specialist toolmakers Electricity Production of clothing Furniture restores Beer bottling Photolithography Refineries CD production Steel making Machine tool manufacturing

9. 9 Specialist toolmakers Furniture restores photolithography JOBBING Machine tool manufacturing Production of clothing BATCH Refineries Electricity Steel making CONTINUOUS Beer bottling CD production MASS PROCESS TYPES – manufacturing

10. 10 In order of increasing volume and decreasing variety: professional process service shops mass services PROCESS TYPES – services

11. 11 Volume Variety Professional process Service shops Mass services Lawyer Library School PROCESS TYPES – services

12. 12 Volume Variety Professional process Service shops Mass services Lawyer Library School PROCESS TYPES – services ΕΡΩΤΗΣΗ – which type? Doctor Supermarket Airport Bank Car Rental Specialist toolmakers Electricity Production of clothing Furniture restores Beer bottling Photolithography Refineries CD production Steel making Machine tool manufacturing

13. 13 Volume Variety Doctor Specialist toolmakers Furniture restores photolithography PROFESSIONAL Machine tool manufacturing Production of clothing SERVICE SHOPS Bank Beer bottling CD production Refineries Electricity Steel making MASS PROCESS TYPES – services

14. 14 Volume Variety Professional process Service shops Mass services Lawyer Library School PROCESS TYPES – services QUESTION Holiday tour operators Supermarkets Consultants High street shops Airport TV station Surgeries Schools Travel agents HSE inspectors Police service

15. 15 Volume Variety Consultants HSE inspectors Surgeries PROFESSIONAL High street shops Holiday tour operators Schools Travel agents SERVICE SHOPS Supermarkets Airport TV station Police service MASS PROCESS TYPES – services

16. 16 SERVICE FACTORY (new category) SERVICE SHOP MASS SERVICE PROFESSIONAL SERVICES Degree of labor intensity Degree of interaction and customization Degree of labor intensity – ratio of labor cost incurred to the value of the plant and equipment employed Degree of interaction refers to the degree to which the customer can intervene in the process (e.g. a customer can call a waiter at will) Degree of customization refers to the degree to which the service provided is customized to the needs of customer (e.g. a patient in an open heart surgery) Types of Operations Systems (the service-process matrix) Schmenner’s Service-Process matrix

17. 17 THE SCHMENNER MATRIX OF PROCESS - SERVICES Degree of interaction and customization Degree of labor intensity = SERVICE SHOPS Car-repairs SERVICE FACTORY Airlines Hotels Resorts MASS Retailers Schools Wholesalers PROFESIONAL Consultants Doctors Architectures value of the plant & equipment employed Labor cost

18. 18 THE SCHMENNER MATRIX OF PROCESS - SERVICES Degree of interaction and customization SERVICE SHOPS Car-repairs SERVICE FACTORY Airlines Hotels Resorts MASS Retailers Schools Wholesalers PROFESIONAL Consultants Doctors Architectures Degree of labor intensity = value of the plant & equipment employed Labor cost Question: Hospital?

19. 19 THE SCHMENNER MATRIX OF PROCESS - SERVICES Degree of interaction and customization SERVICE SHOPS Car-repairs SERVICE FACTORY Airlines Hotels Resorts MASS Retailers Schools Wholesalers PROFESIONAL Consultants Doctors Architectures Degree of labor intensity = value of the plant & equipment employed Labor cost Hospital?

20. 20 THE SCHMENNER MATRIX OF PROCESS - SERVICES Degree of interaction and customization SERVICE SHOPS Car-repairs SERVICE FACTORY Airlines Hotels Resorts MASS Retailers Schools Wholesalers PROFESIONAL Consultants Doctors Architectures Degree of labor intensity = value of the plant & equipment employed Labor cost Hospital? At first sight, seem to be labor intensive, because of the numbers of doctors, nurses and support staff employed. However, because of the very expensive plant and equipment employed, the hospital has a low labor intensity ratio.

21. 21 Types of Operations Systems (the service-process matrix) QUESTION 1.11 Where will you position in the Schmenner matrix: a state owned school offering an MBA course, and a private university, such as yours, offering an MBA course.

22. 22 Schmenner’s Service Process matrix ANSWER 1.11 Whereas most state schools would positioned near the bottom left-hand corner of the matrix, it could be argued that your university would be positioned rather near the centre of the matrix. Your university would have a relative low score for labour intensity (despite the high levels of academic and support staff) because of the high investment in facilities such as buildings, IT systems, etc. On the other axis, Your university has designed its MBA degree programme to provide some degree of customization as the course progress, by presenting students with a choice of a number of elective classes from also a number offered (assembly-to-order) Types of Operations Systems (the service-process matrix) SERVICE FACTORY (new category) SERVICE SHOP MASS SERVICE PROFESSIONAL SERVICES Degree of labor intensity Degree of interaction and customization

23. 23 Schmenner’s Service Process matrix QUESTION: What is the purpose of system classification. Types of Operations Systems (the service-process matrix)

24. 24 Schmenner’s Service Process matrix ANSWER: The purpose of system classification is to allow useful observations to be made, and actions to be taken; therefore, it allows us to know which are the most /least important variables for the operation and compare its characteristics with others. Types of Operations Systems (the service-process matrix)

25. 25 Project Jobbing Batch Mass Continuous Professional service Mass service Service shop ManufacturingΥπηρεσίες Over-standardized & Inflexible Over-standardized & Inflexible More process flexibility than is needed so high cost Less process flexibility than is needed so high cost The “natural” line of fit of process to volume/variety characteristics volume variety PRODUCT – PROCESS MATRIX (based on Hayes & Wheelwright)

26. 26 High Professional services Service shops Mass services Low High Customization contact time discretion Volume of customers per unit per period More-customization & -contact time than is needed so high cost Service over-standardized so high cost Silvestro et al service-process model

27. 27 Flow Process Chart – Process mapping Delay (a wait, e.g. for materials) Inspection (a check of some sort) Storage (deliberate storage, as opposed to delay) Transport (a movement) Operation (an activity that directly adds value) ProcessDescription of element

28. 28 FLOW CHART

29. 29 Proposed Motor Drive Design Exhibit 5.7

30. 30 Redesign of Motor Drive Assembly Following Design for Assembly (DFA) Analysis Exhibit 5.8

31. 31 END