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Operations Management Business Processes Chapter 3 - Hanfield
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Proctor & Gamble – Old Process
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Proctor & Gamble – New Process
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Business Processes Primary processes Providing a service, producing a product Support processes Cost accounting, supplier management, etc. Development processes Developing new products, training new workers, etc.
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Business Processes New product development
Cut across functions and organizations For many business processes, no single functional area or supply chain partner has a complete view or control New product development
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Improving Business Processes
Improving business processes is at the core of operations and supply chain management Performance level of most processes decreases over time unless forces are exerted to maintain it Competitive pressures often force improvement Customer demands are continually increasing
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Mapping Business Processes
Relationship maps Process maps
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Mapping Business Processes
Relationship maps Process maps
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Guidelines for Process Improvement
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Improving Process Performance
Quality Cost productivity, efficiency Time cycle time Flexibility Utilize benchmarking to identify, understand, and adapt outstanding practices to improve performance
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Cycle Time Drivers Waiting time Nonessential process steps
Serial vs. parallel process steps Repeated steps Batching Excessive controls Outdated technology Lack of information Lack of or ineffective training
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Rummler-Brache Process Mapping
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Continuous Improvement
Small, incremental improvements that can add up to significant performance improvements over time Business Process Reengineering Fundamental rethinking and radical redesign of business processes to achieve dramatic organizational improvements
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Operations Management Process Management
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Process Design High Variety of Products How do I produce my goods and services - meeting customer requirements - meeting specifications - within cost and other constraints Moderate Low Low Moderate High Volume
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Product – Process Matrix
Job process Machine shop Hospital emergency room King Soopers custom cakes High Variety of Products Batch process Textbook printing Forging process King Soopers pastries Moderate Line process Auto assembly Cafeteria line King Soopers bread line Continuous process Oil refining process Telephone line access Paper production Low Low Moderate High Volume
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Product – Process Matrix
Job process Machine shop Hospital emergency room King Soopers custom cakes Mass customization Dell Computer Benneton sweaters Sherwin-Williams paint High Variety of Products Batch process Textbook printing Forging process King Soopers pastries Moderate Line process Auto assembly Cafeteria line King Soopers bread line Continuous process Oil refining process Telephone line access Paper production Low Low Moderate High Volume
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Product – Process Matrix
Job process Process-focused Mass customization Customization at high volume High Variety of Products Batch process Process-focused Moderate Line process Repetitive (modular) focus Continuous process Product-focused Low Low Moderate High Volume
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Process Design Low volume, make-to-order process
Less vertical integration More resource flexibility More customer involvement Less capital intensity / automation High Variety of Products High volume, make-to-stock process More vertical integration Less resource flexibility Less customer involvement More capital intensity / automation Moderate Low Low Moderate High Volume
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King Soopers Bakery
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King Soopers Bakery High Low 7000 loaves/hr 1000 pastries/hr
50 cakes/hr Bread line Pastry line Cake line High Low
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Process Design High Variety of Products The choice of process for any activity affects: - how expensive it is to buy & operate - how fast it is - the quality of the outputs - the ability to customize outputs - how easy it is to change (flexibility) - the need for human resources Moderate Low Low Moderate High Volume
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