Process Strategies BA 341 Lean Operations Dr Bogdan Bichescu 1 Starting from the organization s strategy 2 Identify Processes that support the Operations strategy and organizational objectives Product service features e g innovative vs functional Product variety volume demand uncertainty Cost and quality of produced goods or services Production efficiency and flexibility 3 Some Basic Process Strategies 4 Process Focus Many inputs surgeries sick patients baby deliveries emergencies low volume high variety intermittent processes Arnold Palmer Hospital Many departments and many routings Many different outputs uniquely treated patients 5 Process Focus cont d Supports a high degree of product flexibility and customization Low product volumes General purpose equipment and skilled personnel typically grouped by function High variable costs and low equipment utilization Variable product flows planning and scheduling of resources is challenging 6 Repetitive Focus Raw materials and module inputs multiple engine models wheel modules Few modules modular Harley Davidson Modules combined for many Output options many combinations of motorcycles 7 Repetitive Focus cont d Characterized by modules with parts and assemblies made previously Modules may be combined in different ways resulting in many output options Facilities often organized as assembly lines Less product flexibility then process focused facilities but more efficient while also allowing higher product volumes 8 Product Focus Few Inputs corn potatoes water seasoning high volume low variety continuous process Frito Lay Output variations in size shape and packaging 3 oz 5 oz 24 oz package labeled for each material 9 Product Focus cont d Focus on one product or product family High volume but low product variety Highly specialized equipment and generally less skilled labor Typically high fixed costs but low variable costs Typical of continuous processes with long production runs e g glass paper potato chips pharmaceuticals chemicals refineries 10 Mass Customization Focus Many parts and component inputs chips hard drives software cases Many modules high volume high variety Dell Computer Many output versions custom PCs and notebooks 11 Mass Customization Focus cont d Aims to combine the efficiency of the product focus with the flexibility of the process focus A response to customers increasingly unique demands Number of Choices Item 1970s Currently Vehicle Models 140 286 Vehicle Styles 18 1 212 Bicycle Types 8 211 000 Yearly Movie Releases 267 765 SKUs in Supermarkets 14 000 150 000 12 Comparison of Processes 13 Comparison of Processes 14 In place of Summary What types of process is used for making Paper Custom homes Big Macs Cars Wedding invitations Gasoline Pringles Digital cameras 15