Chapter Seven- Process Selection, Design, AND Improvement PDF

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Operations Management- Process Selection, Design, and Improvement...

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CHAPTER 7: PROCESS SELECTION, DESIGN, AND IMPROVEMENT

Process Choice Decisions 

Firms may produce either in response to customer orders and demand or in anticipation of them. There are three major types of goods and services: o Custom or make-to-order goods – generally produced and delivered as one of a kind or in small quantities and are designed to meet specific customers’ specifications o Option or assemble-to-order goods – configuration of standard parts, subassemblies, or services that can be selected by customers from a limited set o Standard or make-to-stock goods and services – made according to a fixed design and the customer has no options from which to choose

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Four principal types of processes are used to produce goods and services: 1. Projects – large scale, customized initiatives that consist of many smaller tasks and activities that must be coordinated and completed to finish on time and within budget ; often used for custom goods and services 2. Job shop processes- organized around particular types of general-purpose equipment that are flexible and capable of customizing work for individual customers; often used for custom or option type products since orders are processed in batches, and different orders may require a different sequence of processing steps and movements to different work areas 3. Flow shop processes- organized around a fixed sequence of activities and process steps to produce a limited variety of similar goods and services; often used for option-oriented and standard goods and services 4. Continuous flow process- create highly standardized goods and services, usually around the clock in very high volumes 

A product life cycle is a characterization of product growth, maturity, and decline over time. A traditional product life cycle consists of four phases: introduction, growth, maturity, and decline.

Product Process Matrix  

This matrix was first proposed by Hayes and Wheelwright, and is a model that describes the alignment of process choice with the characteristics of the manufactured good. Positioning strategy- positioning a business off the diagonal of the product-process matrix to better match its decisions(product characteristics) with its operations(process choice).

Service-Positioning Matrix  

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This matrix focuses on the service-encounter level and helps management design a service system that best meets the technical and behavioral needs of customers. Pathway- unique route through a service system o Customer-routed services – offer customers broad freedom to select the pathways that are best suited for their immediate needs and wants from many possible pathways through the service delivery system o Provider-routed services – constrain customers to follow a very small number of possible and predefined pathways through the service system

Service-encounter activity sequence- consists of all the process steps and associated service encounters necessary to complete a service transaction and fulfill a customer’s wants and needs; it depends on: o The degree of customer discretion, freedom, and decision-making power in selecting the service-encounter activity sequence o The degree of repeatability of the service-encounter activity sequence

Process Design   

The goal of process design is to create the right combination of equipment, labor, software, work methods, and environment to produce and deliver goods and services that satisfy both internal and external customer requirements. It has a significant impact on cost(profitability), flexibility, and quality of the product. We can think about process design at four hierarchical levels: o Task – specific unit of work required to create an output o Activity – group of tasks needed to create and deliver an intermediate or final output o Process – o Value chain – include acquiring the materials, manufacturing and assembly, distribution and sale

a. Process and Value Stream Mapping  focuses on answering the question “What is the process intended to accomplish?”  Designing a goods-producing or service-providing process requires six major activities: 1. Define the purpose and objective of the process. 2. Create a detailed process or value stream map that describes how the process is currently performed. 3. Evaluate alternative process design. 4. Identify and define appropriate performance measures for the process. 5. Select the appropriate equipment and technology. 6. Develop an implementation plan to introduce the new or revised process design.  Process map (flowchart) – describes the sequence of all process activities and tasks necessary to create and deliver a desired output or outcome  Process boundary – beginning or end of a process  Service blueprints or service maps  Value stream – refers to all value-added activities involved in designing, producing, and delivering goods and services to customers  Value Stream Map (VSM) – shows the process flows in a manner similar to an ordinary process map

Mistake-Proofing Processes  Preventing mistakes can be done in three ways: 1. Designing potential defects and errors out of the process 2. Identifying potential defects and errors and stopping a process before they occur 3. Identifying defects and errors soon after they occur and quickly correcting the process 

Poka-yoke – approach for mistake-proofing processes using automatic devices or simple methods to avoid human error. It is focused on two aspects: 1. prediction, or recognizing that a defect is about to occur and providing a warning 2. detection, or recognizing that a defect has occurred and stopping the process

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Richard B. Chase and Douglas M. Stewart classify service poka-yokes by the type of error they are designed to prevent: o Customer error – occur during preparation, service encounter, or during resolution a. Customer errors in preparation – failure to bring necessary materials to the encounter, to understand their role in the transaction, and to engage the correct service b. Customer error during an encounter – can be due to inattention, or simply memory lapse, and include failure to remember steps in the process or to follow instructions c. Customer errors at the resolution stage – failure to signal service inadequacies, to learn from experience, to adjust expectations, and to execute appropriate post-encounter actions

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Service error – result from the task, treatment or tangibles of the service a. Task errors – doing work incorrectly, work not requested, work on the wrong order, or working too slowly

b. Treatment errors – arise in the contact between the server and the customer, such as lack of courteous behavior, and failure to acknowledge, listen, or react appropriately to the customer c. Tangible errors – those in the physical elements of the service

Process Improvement 

Management strategies to improve process designs usually focus on: o Increasing revenue o Increasing agility o Increasing product and/or service quality o Decreasing costs o Decreasing process flow time o Decreasing the carbon footprint of the task, activity, process and/or value chain

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Reegineering – fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed...