1. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Chapter 2 Process Management

2. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Learning Objectives Understand Concepts Discussed in Learning Goals Understand Uses of Formulas

3. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. HighLow Volume Customization High Low Project process Selecting location for new plant in Europe Installing ERP for a manufacturing firm’s business processes Processes at manufacturing organizations

4. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. HighLow Volume Customization High Low Project process Selecting location for new plant in Europe Installing ERP for a manufacturing firm’s business processes Processes at manufacturing organizations

5. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. HighLow Volume Customization High Low Project process Selecting location for new plant in Europe Installing ERP for a manufacturing firm’s business processes Job process Machining precision metal tubes Internal consulting team at manufacturing firm Processes at manufacturing organizations

6. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. HighLow Volume Customization High Low Project process Selecting location for new plant in Europe Installing ERP for a manufacturing firm’s business processes Job process Machining precision metal tubes Internal consulting team at manufacturing firm Processes at manufacturing organizations

7. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. HighLow Volume Customization High Low Project process Selecting location for new plant in Europe Installing ERP for a manufacturing firm’s business processes Job process Machining precision metal tubes Internal consulting team at manufacturing firm Batch process Forging process to make fittings for pressure vessels access Producing a batch of textbooks at R. R. Donnelley’s plant Processes at manufacturing organizations

8. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. HighLow Volume Customization High Low Project process Selecting location for new plant in Europe Installing ERP for a manufacturing firm’s business processes Job process Machining precision metal tubes Internal consulting team at manufacturing firm Batch process Forging process to make fittings for pressure vessels access Producing a batch of textbooks at R. R. Donnelley’s plant Processes at manufacturing organizations

9. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. HighLow Volume Customization High Low Project process Selecting location for new plant in Europe Installing ERP for a manufacturing firm’s business processes Job process Machining precision metal tubes Internal consulting team at manufacturing firm Batch process Forging process to make fit-tings for pressure vessels access Producing a batch of textbooks at R. R. Donnelley’s plant Line process Auto assembly King Soopers bread line Processes at manufacturing organizations

10. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. HighLow Volume Customization High Low Project process Selecting location for new plant in Europe Installing ERP for a manufacturing firm’s business processes Job process Machining precision metal tubes Internal consulting team at manufacturing firm Batch process Forging process to make fittings for pressure vessels access Producing a batch of textbooks at R. R. Donnelley’s plant Line process Auto assembly King Soopers bread line Processes at manufacturing organizations

11. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. HighLow Volume Customization High Low Project process Selecting location for new plant in Europe Installing ERP for a manufacturing firm’s business processes Job process Machining precision metal tubes Internal consulting team at manufacturing firm Batch process Forging process to make fit-tings for pressure vessels access Producing a batch of textbooks at R. R. Donnelley’s plant Line process Auto assembly King Soopers bread line Continuous process Oil refining process Borden’s pasta making process Processes at manufacturing organizations

12. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Processes at manufacturing organizations HighLow Volume Customization High Low Project process Selecting location for new plant in Europe Installing ERP for a manufacturing firm’s business processes Job process Machining precision metal tubes Internal consulting team at manufacturing firm Batch process Forging process to make fittings for pressure vessels access Producing a batch of textbooks at R. R. Donnelley’s plant Line process Auto assembly King Soopers bread line Continuous process Oil refining process Borden’s pasta making process

13. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Processes at service providers HighLow Volume Customization High Low Project process Real estate process for leasing and constructing facilities for large insurance company Student team’s field project

14. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Processes at service providers HighLow Volume Customization High Low Project process Real estate process for leasing and constructing facilities for large insurance company Student team’s field project

15. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Processes at service providers HighLow Volume Customization High Low Project process Real estate process for leasing and constructing facilities for large insurance company Student team’s field project Job process Customer service process at financial services firm General medical practice

16. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Processes at service providers HighLow Volume Customization High Low Project process Real estate process for leasing and constructing facilities for large insurance company Student team’s field project Job process Customer service process at financial services firm General medical practice

17. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Processes at service providers HighLow Volume Customization High Low Project process Real estate process for leasing and constructing facilities for large insurance company Student team’s field project Job process Customer service process at financial services firm General medical practice Batch process Order fulfillment process of importer/distributor Placing purchase orders at public relations agency

18. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Processes at service providers HighLow Volume Customization High Low Project process Real estate process for leasing and constructing facilities for large insurance company Student team’s field project Job process Customer service process at financial services firm General medical practice Batch process Order fulfillment process of importer/distributor Placing purchase orders at public relations agency

19. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Processes at service providers HighLow Volume Customization High Low Project process Real estate process for leasing and constructing facilities for large insurance company Student team’s field project Job process Customer service process at financial services firm General medical practice Batch process Order fulfillment process of importer/distributor Placing purchase orders at public relations agency Line process Cafeteria line Teller line at bank

20. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Processes at service providers HighLow Volume Customization High Low Project process Real estate process for leasing and constructing facilities for large insurance company Student team’s field project Job process Customer service process at financial services firm General medical practice Batch process Order fulfillment process of importer/distributor Placing purchase orders at public relations agency Line process Cafeteria line Teller line at bank

21. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Processes at service providers HighLow Volume Customization High Low Project process Real estate process for leasing and constructing facilities for large insurance company Student team’s field project Job process Customer service process at financial services firm General medical practice Batch process Order fulfillment process of importer/distributor Placing purchase orders at public relations agency Line process Cafeteria line Teller line at bank Continuous process Power generation plant Providing telephone line access

22. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Processes at service providers HighLow Volume Customization High Low Project process Real estate process for leasing and constructing facilities for large insurance company Student team’s field project Job process Customer service process at financial services firm General medical practice Batch process Order fulfillment process of importer/distributor Placing purchase orders at public relations agency Line process Cafeteria line Teller line at bank Continuous process Power generation plant Providing telephone line access

23. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Costs and Volume Units per year (Q) Process 1: General-purposeequipment F1F1 Total cost (dollars)

24. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Costs and Volume Units per year (Q) Process 2: Special-purposeequipment Process 1: General-purposeequipment F2F2 F1F1 Total cost (dollars)

25. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Costs and Volume Units per year (Q) Process 2: Special-purposeequipment Process 1: General-purposeequipment Break-even quantity F2F2 F1F1 Total cost (dollars)

26. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Volume and Major Process Decisions HighLow Volume Project process Real estate process for leasing and constructing facilities for large insurance company Student team’s field project Job process Customer service process at financial services firm General medical practice Batch process Order fulfillment process of importer/distributor Placing purchase orders at public relations agency Line process Cafeteria line Teller line at bank Continuous process Power generation plant Providing telephone line access Process design choices

27. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Volume and Major Process Decisions  More vertical integration  Less resource flexibility  Less customer involvement  More capital intensity/ automation High volume, standardized-service process HighLow Volume Project process Real estate process for leasing and constructing facilities for large insurance company Student team’s field project Job process Customer service process at financial services firm General medical practice Batch process Order fulfillment process of importer/distributor Placing purchase orders at public relations agency Line process Cafeteria line Teller line at bank Continuous process Power generation plant Providing telephone line access Process design choices

28. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Volume and Major Process Decisions Process design choices  Less vertical integration  More resource flexibility  More customer involvement  Less capital intensity/ automation  More vertical integration  Less resource flexibility  Less customer involvement  More capital intensity/ automation Low volume, customized-service process High volume, standardized-service process HighLow Volume Project process Real estate process for leasing and constructing facilities for large insurance company Student team’s field project Job process Customer service process at financial services firm General medical practice Batch process Order fulfillment process of importer/distributor Placing purchase orders at public relations agency Line process Cafeteria line Teller line at bank Continuous process Power generation plant Providing telephone line access

29. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Flow Diagrams Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* * = Points critical to the success of the service

30. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Flow Diagrams Repair authorized Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* Customer departs with car Repair not authorized * = Points critical to the success of the service

31. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Flow Diagrams Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* Customer departs with car Repair not authorized Service visible to customer Repair authorized * = Points critical to the success of the service

32. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Flow Diagrams Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* Customer departs with car Check parts availability † Order parts Parts available Parts not available Service visible to customer Repair authorized Repair not authorized Perform work † * = Points critical to the success of the service † = Points at which failure is most often experienced

33. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Flow Diagrams Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* Customer departs with car Check parts availability † Perform work † Order parts Inspect/ test and repair Perform corrected work Corrective work necessary Repair not authorized Parts not available Parts available Service visible to customer Repair authorized Repair complete * = Points critical to the success of the service † = Points at which failure is most often experienced

34. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Flow Diagrams Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* Customer departs with car Check parts availability † Order parts Service not visible to customer Repair not authorized Parts available Service visible to customer Repair authorized Perform work † Inspect/ test and repair Perform corrected work Corrective work necessary Parts not available Repair complete * = Points critical to the success of the service † = Points at which failure is most often experienced

35. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Flow Diagrams * = Points critical to the success of the service † = Points at which failure is most often experienced Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* Customer departs with car Collect payment Notify customer Check parts availability † Order parts Repair complete Repair not authorized Parts available Service visible to customer Repair authorized Service not visible to customer Perform work † Inspect/ test and repair Perform corrected work Corrective work necessary Parts not available

36. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Process Charts Process: Emergency room admission Subject: Ankle injury patient Beginning: Enter emergency room Ending: Leave hospital Step no. Time (min) Distance (ft) Summary Number of steps Activity Time (min) Distance (ft) Transport Operation Inspect Store Delay Step description Insert Step Append Step Remove Step

37. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Process Charts Process: Emergency room admission Subject: Ankle injury patient Beginning: Enter emergency room Ending: Leave hospital 1Enter emergency room, approach patient window 2Sit down and fill out patient history 3Nurse escorts patient to ER triage room 4Nurse inspects injury 5Return to waiting room 6Wait for available bed 7Go to ER bed 8Wait for doctor 9Doctor inspects injury and questions patient 10Nurse takes patient to radiology 11Technician x-rays patient 12Return to bed in ER 13Wait for doctor to return 14Doctor provides diagnosis and advice 15Return to emergency entrance area 16Check out 17Walk to pharmacy 18Pick up prescription 19Leave the building Step no. Time (min) Distance (ft) Summary Number of steps Activity Time (min) Distance (ft) Transport Operation Inspect Store Delay Step description Insert Step Append Step Remove Step

38. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Process Charts Process: Emergency room admission Subject: Ankle injury patient Beginning: Enter emergency room Ending: Leave hospital 10.5015XEnter emergency room, approach patient window 210.0-XSit down and fill out patient history 30.7540XNurse escorts patient to ER triage room 43.00-XNurse inspects injury 50.7540XReturn to waiting room 61.00-XWait for available bed 71.0060XGo to ER bed 84.00-XWait for doctor 95.00-XDoctor inspects injury and questions patient 102.00200XNurse takes patient to radiology 113.00-XTechnician x-rays patient 122.00200XReturn to bed in ER 133.00-XWait for doctor to return 142.00-XDoctor provides diagnosis and advice 151.0060XReturn to emergency entrance area 164.00-XCheck out 172.00180XWalk to pharmacy 184.00-XPick up prescription 191.0020XLeave the building Step no. Time (min) Distance (ft) Summary Number of steps Activity Time (min) Distance (ft) Transport Operation Inspect Store Delay Step description Insert Step Append Step Remove Step

39. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Process Charts Process: Emergency room admission Subject: Ankle injury patient Beginning: Enter emergency room Ending: Leave hospital 10.5015XEnter emergency room, approach patient window 210.0-XSit down and fill out patient history 30.7540XNurse escorts patient to ER triage room 43.00-XNurse inspects injury 50.7540XReturn to waiting room 61.00-XWait for available bed 71.0060XGo to ER bed 84.00-XWait for doctor 95.00-XDoctor inspects injury and questions patient 102.00200XNurse takes patient to radiology 113.00-XTechnician x-rays patient 122.00200XReturn to bed in ER 133.00-XWait for doctor to return 142.00-XDoctor provides diagnosis and advice 151.0060XReturn to emergency entrance area 164.00-XCheck out 172.00180XWalk to pharmacy 184.00-XPick up prescription 191.0020XLeave the building Step no. Time (min) Distance (ft) Summary Number of steps Activity Time (min) Distance (ft) Transport911815 Operation523— Inspect28— Store——— Delay38— Step description Insert Step Append Step Remove Step

40. To Accompany Ritzman & Krajewski, Foundations of Operations Management © 2003 Prentice-Hall, Inc. All rights reserved. Process Charts Process: Emergency room admission Subject: Ankle injury patient Beginning: Enter emergency room Ending: Leave hospital 10.5015XEnter emergency room, approach patient window 210.0-XSit down and fill out patient history 30.7540XNurse escorts patient to ER triage room 43.00-XNurse inspects injury 50.7540XReturn to waiting room 61.00-XWait for available bed 71.0060XGo to ER bed 84.00-XWait for doctor 95.00-XDoctor inspects injury and questions patient 102.00200XNurse takes patient to radiology 113.00-XTechnician x-rays patient 122.00200XReturn to bed in ER 133.00-XWait for doctor to return 142.00-XDoctor provides diagnosis and advice 151.0060XReturn to emergency entrance area 164.00-XCheck out 172.00180XWalk to pharmacy 184.00-XPick up prescription 191.0020XLeave the building Step no. Time (min) Distance (ft) Summary Number of steps Activity Time (min) Distance (ft) Transport911815 Operation523— Inspect28— Store——— Delay38— Step description Insert Step Append Step Remove Step