Operations
Management
Process Strategy
Process Strategies
Involves determining how to produce a good
or provide a service within constraints
 Objective




Meet or exceed customer requirements
Meet cost & managerial goals
Has long-run effects



Production efficiency
Product & volume flexibility
Cost & quality
Fit of Process, Volume, and Variety
Low-Volume
(Intermittent)
High Variety
One or few units per
run, high variety
(allows customization)
Changes in modules
Modest runs, standardized
modules
Low Variety; Changes
in attributes (such as
grade, quality, size,
thickness, etc.)
Long runs only
Repetitive Process
(Modular)
Process focus
projects, job shop,
(print, carpentry)
Standard Register
High-Volume
(Continuous)
Mass
Customization
(difficult to achieve,
but huge rewards)
Repetitive
(autos, motorcycles)
Harley Davidson
Dell Computer Co.,
Levis Jeans
Product focus
(commercial baked
goods, steel, glass)
Steel, Cement
Process-Focused Strategy
Facilities are organized by process
 Similar processes are together


Example: All drill presses are together
Low volume, high variety products
 ‘Jumbled’ flow
Product A
Operation
 Other names


Job shop
1
Product B
2
3
Process-Focused Example
Custom Woodworking Shop
Cutting Planing Shaping Assembly Sanding Finishing
1
Job A
Job B
1
2
5
6
5
6
3
2
4
3
4
Drilling Turning
7
Process Focus - Pros & Cons

Advantages



Greater product flexibility
More general purpose equipment – equipments
not dedicated to one product
Disadvantages



High production cost per unit
More difficult production planning & control
Low equipment utilization (5% to 25%)
Process-Focus Examples
Bank
Hospital
Machine
Shop
Repetitive Focused Strategy

Facilities often organized by assembly lines

Characterized by modules

Parts & assemblies made in modules

Modules combined for many output options

Other names

Assembly line

Production line

E.g. auto-manufacturing, pc’s, house-hold appliances,
etc
Assembly Line Example
Raw Material
Components
4
2
Assemblies
1
Raw Material
3
Components
Product/Material Flow
Production Operation
5
Subassem.
Fin. Goods
7
Repetitive Focus - Considerations

Product focused process that uses modules

More structured than process-focused, less structured
than product focused

Enables semi-customization

Using modules, it enjoys economic advantage of
continuous process, and custom advantage of lowvolume, moderately high-variety model
Repetitive Focus - Examples
Fast
Food
Clothes
Dryer
McDonald’s
over 95 billion served
Truck
Repetitive Focus
Product-Focused Strategy

Facilities are organized by product

High volume, low variety

Conversion or further processing of undifferentiated
materials such as petroleum, chemicals, or beer

Follows a predetermined sequence of steps, but flow is
continuous rather than discrete – highly standardized

Other names

Line flow production

Continuous production
Production Process at
NUCOR Steel
Product Focus - Pros & Cons

Advantages





Lower production cost per unit
Lower but more specialized labor skills
Easier production planning and control
Higher equipment utilization (70% to 90%)
Disadvantages


Lower product flexibility
More specialized equipment
Product-Focused Examples
Soft Drinks
(Continuous,
then Discrete)
Paper (Continuous)
Mass Customization

Using technology and imagination to rapidly
mass-produce products that cater to unique
customer desires

Under mass customization the three process
models become so flexible that distinctions
between them blur, making variety and
volume issues less significant