Business Processes / / Layout and Flow PDF

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Business Processes /
/ Layout and Flow
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Integrated Business Management Lecture 9: Business Processes / / Layout and Flow 1. Operations consists of processes  All operations consist of a collection of processes  They interconnect with one another  Each process acts as a smaller version of the whole operation 2. Process  Process is the mechanism that actually transforms inputs into outputs  A process is an arrangement of resources that produces some mixture of goods and services

TRANFORMA TION TRANFORMAT PROCES PROCESSS

Input resour ces resources

Output products produ cts

Customers

The process Hierachy  Processes are the building blocks of all operations and form an internal network  Each process is, at the same time, an internal supplier and internal customer for other processes  Think services as well! 4. All functions manage processes  E.g. Marketing function  Sales forecasts, advertising campaigns, marketing plans  Need to interconnect with other functions 5. Business Processes - Business process is a set of activities and tasks that, once completed, will accomplish an organisational goal 6. Nature and purpose of the design activity 3.

7. What is Process Design?  To design is to conceive the looks, arrangement, and workings of something before it is created

 All operations managers are designers  When the purchase or rearrange the position of a piece of equipment, or they change the way of working within a process  Is a design decision because it affects the physical shape and nature of the processes  Products and services should be designed in such a way that they can be created effectively.  Product/service design has an impact on the process design and vice versa. 8. What to consider?  First of all consider the design objectives  i.e. 4Vs characteristics  Must make sure that the performance of the process is appropriate for what it is trying to achieve  Speed, e.g. a cheap, fast food hamburger 9. Designing Production  Emphasis on not wasting energy by focusing on the efficiencies of flow within the factory o contributes to environmental objectives and saves money for the company 10. Project Processes  One-off, complex, large scale, high work content ‘products’  Specially made, every one customised  Defined start and finish: time, quality and cost objectives  Many different skills have to be coordinated. 11. Jobbing/Job Processes - Items are made individually and each item is finished before the next one is started.  Very small quantities: ‘one-offs’, or only a few required  Specially made. High variety, low repetition. ‘Strangers’ every one customised  Skill requirements are usually very broad  Skilled jobber, or team, complete whole product. 12. Batch Processes - Groups of items are made together. Each batch is finished before starting the next block of goods.  Higher volumes and lower variety than for jobbing  Standard products, repeating demand. But can make specials  Specialised, narrower skills  Set-ups (changeovers) at each stage of production 13. Mass (Line/Flow) Processes - Identical, standardised items are produced on an assembly line. Most cars are mass-produced in large factories using conveyor belts and expensive machinery such as robot arms. Workers have specialised jobs, e.g. fitting wheels.  Higher volumes than batch  Standard, repeat products (‘runners’)  Low and/or narrow skills  No set-ups, or almost instantaneous ones 14. Continuous Processes  Extremely high volumes and low variety:  often single product  Standard, repeat products (‘runners’)

 Highly capital-intensive and automated  Few changeovers required  Difficult and expensive to start and stop the process 15. Professional Service  High levels of customer (client) contact.  Clients spend a considerable time in the service process.  High levels of customisation with service processes being highly adaptable.  Contact staff are given high levels of discretion in servicing customers.  People-based rather than equipment-based  E.g. Financial Advisor, Physiotherapist, Surgeon, personal tuition 16. Service Shops  Medium levels of volumes of customers  Medium, or mixed, levels of customer contact  Medium, or mixed, levels of customisation  Medium, or mixed, levels of staff discretion  E.g. Gym, Yoga class, seminars 17. Mass Service  High levels of volumes of customers  Low to medium levels of customer contact  Low, or mixed, levels of customisation  Low, or mixed, levels of staff discretion  E.g. Call Centre, big lectures! 18. Process types – useful but simplistic  In reality there are often no clear boundary between different types of process  Specialist camera retailer = service shop  But would often give specialised technical advice  It is not however a consultancy  Volume and variety characteristics of a process are more realistic ways of describing them 19. Layout and Flow – Introduction  The Layout of an operation is concerned with the physical location of its transforming resources  Were to put facilities; machines; equipment; staff in the operation  Layout is the first thing we notice. It governs the appearance.  We are also concerned with determining the way in which transformed resources (materials, information, customers) flow through the operation. 20. Location (geographical)  2 incentives cause organisations to change location  Changes in demand (new markets, closing markets)  Changes in supply (land cost, raw materials, labour)  Operations manager seeks a balance between strength of supply side and demand side factors 21. Layout and the basic types used in operations so as to:  Ensure a smooth flow of work, material, and information through the system  Utilise labour efficiently

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Eliminate wasted or redundant movement Facilitate the entry, exit, and placement of material, products, and people  Facilitate communication and interaction between workers, between workers and their supervisors, or between workers and customers 22. Why consider affective layout?  Issues of layout and flow are the most important within the general area design in operations management  affects the total distance travelled by materials, information or customers as they move through the operation  Quality  Time  High rent costs 23. Basic Layout Types  Fixed position layout  Functional layout  Cell Layout  Product Layout (Line Layout) 24. Fixed Position Layout  Recipient of the process is stationary  The people, machinery, plant and people who do the processing move as necessary  Motorway construction  Open heart surgery  High class service restaurant  Make better use of expensive skilled resource 25. Advantages and disadvantages of Fixed Position layout  Advantages:  Very high product and mix flexibility  Product/customer not moved  High variety of tasks for staff  Disadvantages  Very high unit costs  Scheduling space and activities can be difficult 26. Functional Layout  Conforms to the needs and convenience of the functions performed by the transforming resources within the process  Similar resources or processes are located together  When materials, information or customers flow through the operation their ROUTE is determined according to their needs  Hospital  X Ray near to A&E  Machining the parts which go into aircraft machinery  Machining centres near to the specialised staff  Supermarket  Tinned veg close together 27. Advantages and disadvantages of Functional layout  Advantages:  High product and mix flexibility  Relatively robust in the case of disruptions

 Easy to supervise  Disadvantages:  Low utilization  Can have very high WIP  Complex flow 28. Cell Layout  Cellular layouts attempt to combine the flexibility of a functional layout with the efficiency of a product layout  Based on the concept of group technology (GT), dissimilar machines are grouped into work centres, called cells, to process parts with similar shapes or processing or customer requirements  The layout of machines/services within each cell resembles a small assembly line  Let’s see the following examples 29. Advantages and disadvantages of Cell layout Advantages:  Can give good compromise  Fast throughput  Group work can result in good motivation Disadvantages:  Can be costly to rearrange existing layout  Can need more plant 30. Line Layout / Product Layout  Locating the transforming resources entirely for the convenience of the transformed resources  Customers, products or pieces or information follow a prearranged route  To match the sequence in which the processes have been located  transformed resources ‘flow’ as if in a line through the process 31. Advantages and disadvantages of Product layout Advantages:  Low unit costs for high volume  Opportunities for specialization of equipment Disadvantages:  Can have low mix flexibility  Not very robust in the case of disruptions  Work can be very repetitive 32. Mixed Layouts  Hybrid layouts modify and/or combine some aspects of all of the basic layout types  Or use the ‘pure’ layout types in different parts of the operation...