1. Classifications of Operations Systems

2. Classifications of Operations Systems


Volume / Flexibility
Service – Process Matrix

3. Product - Process Matrix
Product Mix
Process Pattern
Very Jumbled Flow;
process segments
loosely linked
Jumbled flow, but a
dominant flow exists
Line Flow
Worker paced
Machine paced
Low
High
Very high
Volumes, Challenges to
One of a Volumes,Volumes,
Several major standard
kind or many
Management
products products
product
few
Scheduling; materials
Project
Handling;shifting
bottlenecks
Job Shop
Opportunity Costs
Batch Flow
Worker motivation;
balance;maintaining
enough flexibility
Line Flow
Out-of-pocket costs
Line Flow
Capital expenses for big
chunk capacity;
Continuous technological change
Materials management;
Flow
vertical integration
Continuous, Automated
and rigid flow; process
segments tightly
linkedChallenges to
Bidding;
Quality (Product
Management
delivery;
Differentiation);
Product design Flexibility in
flexibility
output volumes
Price

4. Volume / Flexibility

Projects
- oil rig construction
- development of a computer software package
- overhaul of an airliner

5. 
Job shop
- Low volume, low standardisation – one of a kind,
custom design, general purpose equipment, high
margins, jumbled flow, estimating costs, estimating
delivery times, order tracing and expediting
- tool room
- tailor
- operation theatre

6. Volume / Flexibilty (contd.)

Continuous
- High volume, specialised equipment, high capital
investment, high standardisation, commodity,
vertical integration, long runs, economies of scale,
timing expansion and technological changes
- nuts and bolts
- cement, sugar, petroleum
- photographic films

7. Volume / Flexibilty (contd.)

Batch
- Standardised designs, back-up suppliers, finished
or intermediate goods inventory, systematising
diverse elements, SPC, developing standards, large
complex operations
- aero-engines
- mining equipment
- pumps, compressors
- mail collection
Disconnected line flow or Connected line flow

8. Volume / Flexibilty (contd.)

The Service – Process Matrix (Schmenner)
- Two Axes:
- Degree of Labour Intensity; ratio of labour cost
to value of plant and equipment
Electric utilities
Communications
Amusement parks
Hospitals
Banking
Hotels
Retail trade
Business services
: 14.21
: 5.31
: 2.49
: 1.63
: 1.20
: 1.01
: 0.62
: 0.42

9. Volume / Flexibilty (contd.)

The Service – Process Matrix (Schmenner)
- Two Axes:
- Degree of Interaction and Customisation
Interaction : Degree to which the customer can
intervene in the process (e.g. restaurant), is not
duration of contact (e.g. lectures)
Customisation : Degree to which the service
provided is tailored to the needs of the
customers

10. The Service – Process Matrix
Low
Degree of Interaction &
Customisation
Low
High
Service Factory
Service Shop
Degree
Airlines
Hospitals
of
Hotels
Auto Repairs
Labour
Intensity
Resorts
Mass Service
High
Professional
Retailing
Doctors
Schools
Lawyers
Commercial Banking
Accountants

11. The Service – Process Matrix (contd)

Low Labour Intensity
- Capital decisions – Capacity, Technology and
Timing
- Managing demand to avoid peaks and to promote
off peaks
- Scheduling service delivery

12. The Service – Process Matrix (contd)

High Labour Intensity
- Hiring, training, welfare
- Methods development and control
- Scheduling workforce

13. The Service – Process Matrix (contd)

Low Interaction & Customisation
- Marketing
- Making service “warm”
- Attention to physical surroundings
- Managing fairly rigid hierarchy

14. The Service – Process Matrix (contd)

High Interaction & Customisation
- Fighting expenses increases
- Reacting to customer interventions in process
- Gaining employee loyalty
- Managing flat hierarchy
- Loose subordinate / superior relationship
- Managing advancement of people

15. The Service – Process Matrix (contd)


Help companies assess their competitive
stance and means by which they provide their
services
Possibility to move across (the diagonal)?
(e.g. banking and retailing becoming more automated,
restaurants with more standardised menus, professional service
firms to specialise; pursuit is for controls and reduced costs)

16. Assignment


Attempt to categorise the operations system
of your own organisation, or others with which
you are familiar
How would it plan to move across (the
diagonal)? What would be the implications
vis-à-vis the organisation’s structure, systems
and processes?