MGT 345 OPERATION MANAGEMENT UITM

1. CHAPTER 3
Process Strategies
(MGT345)

2. CHAPTER OUTLINE:
3.1 Introduction
3.2 Process Focus
3.3 Repetitive Focus
3.4 Product Focus
3.5 Mass Customization

3. 3.1 INTRODUCTION
According to Heizer and Render, a process (or
transformation) strategy is an organization’s
approach to transforming resources into goods and
services. It involves of determining how to produce a
product or provide a service. The objectives of
process strategies are:
a) Meet or exceed customer requirements
b) Meet cost & managerial goals

4. A decision of process strategies will contribute to
long run effect:
a) Product & volume flexibility
b) Costs & quality
Basically there are four types of process strategies
1) Process focus
2) Repetitive focus
3) Product focus
4) Mass customization

5. 3.2 PROCESS FOCUS (HIGH VARIETY, LOW VOLUME)
 It also known as an intermittent process that is on a
start-and-stop basis. Because process a high variety of
products but in low volume.
 The facilities (equipment, layout and supervision) are
organized around specific activities or processes.
 High degree of product flexibility.
 Products move from one department to another
according to customer orders.
 The examples; hospitals, banks, printing company,
restaurants and bakery shop.
 Also known as batch production

6. PROCESS-FOCUSSED
Manydepartmentsand
manyroutings
Many
inputs
Many
variety
of
outputs

7. ADVANTAGES
 Able to produces a wide variety of goods and
services, often in small quantities.
 General purpose equipment and labor force is
highly skilled
 Customization put the companies on guard of
making sure the quality of product or services are
continuously improved.

8. DISADVANTAGES
 Many job instruction because each job changes
and different order that required different
sequence of processing steps.
 The resources can be idle during the bottlenecks.

9. 3.3 REPETITIVE FOCUS (MODULAR)
 Also known as mass production.
 Associated with flow lines or assembly lines.
 From one workstation to the next in order.
 Create more standardized products in larger quantities.
 Low flexibility of equipment.
 High volume with little or no customization.
 For example: automotive industry, household
appliances, fast food restaurants and most consumer
goods.

10. REPETITIVE FOCUS
Raw
materials
and
module
inputs
Modules
combined
for many
output
options
Few
modules

11. PROCESS FLOW DIAGRAM
THE ASSEMBLY LINE
TESTING
28 tests
Oil tank work cell
Shocks and forks
Handlebars
Fender work cell
Air cleaners
Fluids and mufflers
Fuel tank work cell
Wheel work cell
Roller testing
Incoming parts
From Milwaukee
on a JIT arrival
schedule
Engines and
transmissions
Frame tube
bending
Frame-building
work cells
Frame
machining
Hot-paint
frame painting
Crating

12. ADVANTAGES
 Mass production process rely on steady, high demand for a
product, thus tend use highly productive.
 There are no disruption to the process and few
management problems since the product does not change
 Unit costs for mass production are low.

13. DISADVANTAGES
 Required some high capital investment
 Skill requirement are lower than in job shops.
 Lack of responsiveness to individual request.

14. 3.4 PRODUCT FOCUS (HIGH VOLUME, LOW VARIETY)
• For very high volume of no discrete, highly
standardized output is desired.
• Very long continuous production runs, highly
specialized and automated equipment that control by
computers.
• Designed for goods or services that typically in
operation continuously 24 hours a day.
• Output is also continuous.
• Individual units are measured rather than counted.
• Examples include steel, paper, paints, chemicals, and
foodstuff such as sugar, flour and rice. Coca-Cola Co.

15. PRODUCT FOCUS
Few
inputs
Output
variations in
size, shape,
and
packaging

16. PRODUCT FOCUS
Continuouscaster
Continuous cast steel sheared into
24-ton slabs
Hot tunnel furnace - 300 ft
Hot mill for finishing, cooling, and coiling
D
E F
GH
I
Scrap
steel
Ladle of molten steel
Electric
furnace
A
B
C

17. ADVANTAGES
 Ann efficient, ease control specialized nature of the system
can set standard and maintain quality of high volume and
low variety product.
 The variable cost is low due to the high volume and the
system requires a very small workforce.

18. DISADVANTAGES
 Required a large investment in plant and highly
specialized equipment.
 Limited producing variety item.
 The cost of correction errors is high.

19. 3.5 MASS CUSTOMIZATION (HIGH VOLUME, HIGH VARIETY)
• The rapid, low-cost production of goods and service to
satisfy increasingly unique customer desire.
• Combines the flexibility of a process focus with the
efficiency of a product focus
• Mass customization encompasses high volume
production, high product variety, highly automated or
technology operated.
• For examples: Dell Computer, configuring each
computer system to customer specifications &
Motorola Company, producing one of a kind pager at
low cost.

20. MASS CUSTOMIZATION
Mass Customization
Repetitive Focus
Flexible people
and equipment
Modular techniques
Supportive
supply chains
Process-Focused
High variety, low volume
Low utilization (5% to 25%)
General-purpose equipment
Product-Focused
Low variety, high volume
High utilization (70% to 90%)
Specialized equipment
Rapid
throughput
techniques
Effective
scheduling
techniques

21. ADVANTAGES
 Able to produce a large quantity and large variety
with a low cost.
 Operators are train for multi-skills for necessary
customization using general purpose of
equipment.

22. DISADVANTAGES
 Custom orders require many job instruction.
 Mass customization is tough unless the
management can economically make precisely
what and when the customer want it.

23. COMPARISON OF THE FOUR CHARACTERISTICS OF FOUR
TYPES OF PROCESSES
Process Focus
(High variety of product,
Low volume)
Repetitive Focus
(Modular Strategy)
Product, Focus
(Low variety of Product,
High Volume)
Mass Customization
(High Variety of Product,
High Volume)
Small quantity, large
variety of products
Long runs, standardized
product, from mode.
Large quantity, small
variety of products
Large quantity, large
variety of products
General purpose
equipment
Special equipment aids
in use of assembly line
Special purpose
equipment
Rapid change over on
flexible equipment
Broadly skilled
operators
Modestly trained
employees
Operator less broadly
skilled
Flexible operators
trained for customization
Many instructions
because of change in
job
Reduced training and
number of job
instructions
Few work orders and
job instructions
Custom orders, require
many instructions
Raw materials high
relative to product value
JIT techniques use Raw material low
relative to product value
Raw material low
relative to product value
Finished goods, make to
order, not stored
Finished goods made to
frequent forecasts
Finished goods made to
forecast, then stored
Finished goods made to
order
Fixed costs low, variable
costs high
Fixed costs depends on
flexibility of facilities
Fixed costs high,
variable costs low
Fixed costs high,
variable cost must be
low