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The Design of Processes (Step 2 - Process choice (Types of manufacturing…

- - - - Process design is influenced by 2 sets of factors
        
        Operations' performance objectives
        
        Quality
        
        Speed
        
        Cost
        
        The main drivers
        
        The volume of work that needs to go through the process
        
        The variety of outputs from the process
    - - Decisions such as how resources are organised within a process and how work flows
      - Manufacturing
        
        5 different ways of arranging resources
      - Services
        
        3 different ways of arranging resources
      - Driven by
        
        The volume of work
        
        The variety of outputs that the operation is expected
        to cope with
        
        Operations performance
    - - High level - how resources are grouped in general terms
      - There is a fixed set of layout types and generally one of these must be chosen for the process
    - - Detailed decisions need to be made about
        
        How much equipment is needed
        
        How many people there are
        
        Who does what work
        
        Job design
      - Needs to be fairly precise knowledge about the tasks involved and good forecasts about how much is likely to need purchasing over time
- - - - There are key differences on how process are designed based on scale
      - In large volume organisations, processes such as automated equipment and dedicating staff to specific roles within the overall process can be included
      - Repeatability and standardisation needed for high volumes
      - Lower volumes are less systematic and staff may be expected to undertake more than one role - relies on flexible staff
    - - EG - package holidays offer a very limited choice of what you are buying
        
        Specific times and dates
        
        Clear schedules
        
        Very limited to change course
      - EG - bespoke holidays
        
        More expensive
        
        Ability to tailor holiday
        
        Greater flexiblity
      - Customisation adds complexity, costs and requires more skills
      - High variety limits the extent to which a process can be automated and can introduce delays while the process is reconfigured
    - - Many operations are designed to produce approximately the same quantity of output per day
        
        Requires the same number of people to perform the same tasks, creating a stable process
      - Operations with significant swings in demand over time
        
        Can be due to
        
        Time of year
        
        Change in weather
        
        The operation has to build in volume flexibility by
        
        Increasing its capacity temporarily
        
        Buffering the operation - storing its output in anticipation of demand
        
        Managing in a high-variation process is usually more complex.
    - - When you order a product you do not see that item being made in the factory
        
        There is a large degree of separation between the customer and the process itself
        
        Advantages
        
        Efficiency
        
        Smooth running of the process
        
        Separation allows the operation to plan and sequences activities to flow smoothly through the system, with a time lag between the order being taken and the product being made
        
        Some Operations have high degrees of contact with the customer and his has to be factored into the design
      - Different degrees of visibility
        
        High visibility
        
        The customer is fully involved
        
        Medium visibility
        
        They might only observe or witness at a distance what the operation is doing
    - - Slack et al. (2010) suggest profiling each operation in the 4 dimensions
        
        See Book 1 p 142
      - Note that the volume scale in the diagram runs from low to high, but the other scales are high to low.
      - The ideal circumstances to design a highly automated,
        standardised, stable, simple process that does not need much flexibility
        
        High volume
        
        Low variety
        
        No demand variation
        
        Little customer contact
- - - - Activities that produce one-off or unique outputs
      - Usually characterized by their complexity, long timescale, large scale and the involvement of disciplinary teams
      - Project managers work with autonomy when compared with managers working in other operations environments
    - - Similarities with project processes
      - Deal with low volumes of output which is tailored to meet the exact needs of the customer
      - They have general purpose equipment and skilled people switching from one output to another quickly where has project processes have more dedicated resources applied to them over a period of time
      - In engineering industries they have 'jobbing shops' that contain a range of general purpose equipment staffed by operators - the facilities allows them to produce small numbers of unique/precision components (eg prototypes)
      - Challenges
        
        Scheduling work can be complex as it involves matching
        skill availability with the work to be done
        
        The labor involved is expensive and can be difficult to maintain productivity
        
        Difficult to maintain high levels of utilization in this type of environment
        
        Usually uncertainties on how long work will take and if the work will come out correctly as the work wouldn't of been done before
        
        Managers need to have good problems solving skills to deal with issues
    - - 60% of manufacturing is batch processing
      - 'Batch' refers to the quantity of items produced as a group at the time time
      - Batch sizes can vary
      - Equipment is set to produce one batch of product and once the batch is complete, the equipment will be reset so that a batch if a different item can be produced using the same resources
      - Process is best for producing medium levels of volume at medium levels of variety
      - Challenges with maintaining productivity
      - Scheduling can be complex
        
        Levels of variety
        
        Different batch sizes
        
        Different journeys that work goes on while is progresses through the factory
      - If work is forced through the system to achieve high utilization work can start to queue badly at each stage which can mean that the time needed to produce the item increases
      - When stock lies waiting in queues, it is stored as WIP - increasing the need for working capital
    - - All high-volume consumer goods are produced in mass processes
      - Facilities produce very large numbers of items in a relativity small range of varieties using plant and equipment that is dedicated to this one product type.
      - Where there is variety, it will be very carefully controlled and restricted to minor changes from a pre-determined set of allowable variations
        
        Style
        
        Size
        
        Colour
      - Usually involves larger amounts of automation and technology with many of the jobs within the process having been simplified
      - Challenges for OMs
        
        Must keep the plant running without breakdown to maintain supply to meet demand as high capital equipment needs to earn
        its return on investment
        
        Functions such as maintenance and quality control become priorities to ensure that output is up to standard and supply can keep going.
    - - High volume, highly autonomous processes with 24 hour operation and little downtime
      - Outputs are not seen as many discrete units but as one continuous stream if output that emerges from the facility at a steady rate
      - Challenge - maintaining a supply of raw materials to inputs end of the process and dealing with the logistics of the output leaving the process and getting to the customer/putting it in storage
      - The process is continually monitored so that small variations in performance can be addressed to jeep the output standards maintained
  - - - Dealing with low volumes of output that is highly customized to meet the clients need
      - Can only be delivered through a high proportion of time being spent with the client looking at their needs and requirements
    - - Have to deal with inherent variability in what the customer wants from their customer experience
      - Eg each trolley will have customized input, however the choice is limited to whats on the shelf
      - Has to offer higher levels of volume and less variety than a professional service, but there is scope to give customers flexibility
      - Some will group customers together to create a batch which is similar to manufacturing
    - - Operate high volumes and allow work, or customers, to porgress stedily through the system with as little delay as possible
      - They are often designed to deliver one type of service
  - - - Flexibility is achieved through a combination of design features and process capabilities that have been though of in advance
      - Example
        
        Products are designed using a segmental structure, so that each important characteristic can have a series of options for the customer to choose from.
        
        These characteristics are independent of each other wherever possible, so that one choice in one aspect does not automatically restrict choice in another
        
        Customer choice is not infinite
        
        There are clear boundaries or limits set by the organisation about what these choices are
        
        Mass customization
        
        The process is designed to be capable of dealing
        with this segmental structure
        
        They have separate stages of production, assembly or service that also operate independently as much as possible.
        
        Advantages
        
        Allows the company to increase its prices and profit margins
        
        The service concept transforms the operation from one of selling a relatively undifferentiated product into a highly differentiated service experience
        
        Customer choice
        
        If the company simply stocked different finished products, it would have to keep large inventories of a high variety of goods at each retail location
        
        The modular approach maximizes customer choice for a given amount of stock.
        
        Increased revenue
        
        Encourages customers to buy more add-ons as part of the service
        
        Can follow fashion trends easily
        
        If required
- - - - Moving resources to the customer rather than
        bringing the customer to the organisation
    - - Not always easy to move resources to the site
      - Less control over the environment in which the work will take place
  - - - Journeys through the layout can vary, creating flexibility
      - Grouping into departments helps create functional expertise and identity
    - - Journeys through a functional layout can be complex
      - Distances travelled can be greater than necessary
      - Progression of work can be difficult
      - Customers can get lost in the layout
  - - - It is difficult to make work flow through a product layout if there is variability in the time taken to complete individual steps and there are complications if some work does not need to go to every stage - eg if you are only buying a drink at self service but have to wait in the queue
    - - Difficult to increase the capacity in a product layout without completely redesigning the steps in the process to make each stage faster or to duplicate some of the stages
    - - Care has to be taken to consider r likely changes to capacity over time and the ability of the layout choice to cope with that.
    - - Distance travelled is minimised and should be predictable
      - Work can be easily progressed
      - Should be easy for customers to follow
    - - Lacks flexibility
      - Layout needs to be carefully sequenced and balanced
      - Customers may find it impersonal
  - - - Combines some of the features of both functional and product layouts
      - Production cells are created - small-scale flow lines
      - Allows the system to be flexibility to cope with different varieties of product, but each cell can have co-located adjacent steps for the types of products it is producing
    - - Distance travelled can be shorter than in a functional layout
      - Allows some clustering of expertise, especially in service operations
      - Simpler for customers to follow
      - Some flexibility
    - - Often requires duplication of equipment and some skilled staff
      - There can be greater imbalance in workload across cells
      - Cells need to be balanced to create good flow
- - - - Cost focused layouts are where unit costs are being minimised by creating an even flow of resources, minimising distance travelled and minimising the cost of location and transportation
      - Revenue based layout is designed instead to encourage more spending by the customer rather than minimising unit costs. As a result, the distance travelled may be greater than absolutely necessary and journey times not minimised