Operations
Management
Chapter 7 –
Process Strategy
PowerPoint presentation to accompany
Heizer/Render
Principles of Operations Management, 7e
Operations Management, 9e
© 2008 Prentice Hall, Inc.
7–1
Mass Customization
 The rapid, low-cost production of
goods and service to satisfy
increasingly unique customer
desires
 Combines the
flexibility of a
process focus
with the efficiency
of a product focus
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Changing Processes
 Difficult and expensive
 May mean starting over
 Process strategy determines
transformation strategy for an
extended period
 Important to get it right
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Process Analysis and
Design
 Flow Diagrams - Shows the movement
of materials
 Time-Function Mapping - Shows flows
and time frame
 Value-Stream Mapping - Shows flows
and time and value added beyond the
immediate organization
 Process Charts - Uses symbols to show
key activities
 Service Blueprinting - focuses on
customer/provider interaction
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7–4
“Baseline” Time-Function Map
Customer
Order
product
Sales
Process
order
Production
control
Receive
product
Wait
Plant A
Print
Warehouse
Wait
Wait
Extrude
Plant B
Move
Transport
Figure 7.7
Wait
12 days
13 days
1 day
4 days 1 day 10 days
Move
1 day
0 day
1 day
52 days
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“Target” Time-Function Map
Customer
Order
product
Sales
Process
order
Production
control
Receive
product
Wait
Plant
Print
Extrude
Warehouse
Wait
Transport
Move
1 day
2 days
1 day
6 days
1 day
1 day
Figure 7.7
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Value-Stream Mapping
Figure 7.8
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7–7
Process Chart
Figure 7.9
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7–8
Service Blueprint
 Focuses on the customer and
provider interaction
 Defines three levels of interaction
 Each level has different
management issues
 Identifies potential failure points
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7–9
Service Blueprint
Personal Greeting
Level
#1
Service Diagnosis
Perform Service
Customer arrives
for service
Customer departs
F
Warm greeting
and obtain
service request
Determine
specifics
No
Standard
request
Level
#2
Direct customer
to waiting room
F
Level
#3
Friendly Close
Can
service be
done and does
customer
approve?
F
F
Yes
Yes
Notify
customer
and recommend
an alternative
provider
Customer pays bill
F
F
No
Notify
customer the
car is ready
Perform
required work
F
Prepare invoice
Figure 7.10
© 2008 Prentice Hall, Inc.
F
7 – 10
Process Analysis Tools
 Flowcharts provide a view of the
big picture
 Time-function mapping adds rigor
and a time element
 Value-stream analysis extends to
customers and suppliers
 Process charts show detail
 Service blueprint focuses on
customer interaction
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7 – 11
Equipment and Technology
 Often complex decisions
 Possible competitive advantage
 Flexibility
 Stable processes
 May allow enlarging the scope of the
processes
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Production Technology
 Machine technology
 Automatic identification
systems (AISs)
 Process control
 Vision system
 Robot
 Automated storage and retrieval systems
(ASRSs)
 Automated guided vehicles (AGVs)
 Flexible manufacturing systems (FMSs)
 Computer-integrated manufacturing (CIM)
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Machine Technology
 Increased precision
 Increased productivity
 Increased flexibility
 Improved environmental impact
 Reduced changeover time
 Decreased size
 Reduced power requirements
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Automatic Identification
Systems (AISs)
 Improved data acquisition
 Reduced data entry errors
 Increased speed
 Increased scope
of process
automation
Example – Bar codes and RFID
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Process Control
 Increased process stability
 Increased process precision
 Real-time provision of information
for process evaluation
 Data available in many forms
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Process Control Software
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Vision Systems
 Particular aid to inspection
 Consistently accurate
 Never bored
 Modest cost
 Superior to individuals performing
the same tasks
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Robots
 Perform monotonous or dangerous
tasks
 Perform tasks requiring significant
strength or endurance
 Generally enhanced consistency
and accuracy
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Automated Storage and
Retrieval Systems (ASRSs)
 Automated placement and
withdrawal of parts and products
 Reduced errors and labor
 Particularly useful in inventory and
test areas of manufacturing firms
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Automated Guided Vehicle
(AGVs)
 Electronically guided and controlled
carts
 Used for movement of products
and/or individuals
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Flexible Manufacturing
Systems (FMSs)
 Computer controls both the workstation
and the material handling equipment
 Enhance flexibility and reduced waste
 Can economically produce low volume at
high quality
 Reduced changeover time and increased
utilization
 Stringent communication requirement
between components
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Computer-Integrated
Manufacturing (CIM)
 Extension of flexible manufacturing
systems
 Backwards to engineering and inventory
control
 Forward into warehousing and shipping
 Can also include financial and customer
service areas
 Reducing the distinction between lowvolume/high-variety, and highvolume/low-variety production
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ComputerIntegrated
Manufacturing
(CIM)
Figure 7.12
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Technology in Services
Service Industry
Example
Financial
Services
Debit cards, electronic funds transfer, ATMs,
Internet stock trading
Education
Electronic bulletin boards, on-line journals,
WebCT and Blackboard
Utilities and
government
Automated one-man garbage trucks, optical
mail and bomb scanners, flood warning
systems
Restaurants and
foods
Wireless orders from waiters to kitchen,
robot butchering, transponders on cars that
track sales at drive-throughs
Communications Electronic publishing, interactive TV
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Table 7.4
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Technology in Services
Service Industry
Example
Hotels
Electronic check-in/check-out, electronic
key/lock system
Wholesale/retail
trade
ATM-like kiosks, point-of-sale (POS)
terminals, e-commerce, electronic
communication between store and supplier,
bar coded data
Transportation
Automatic toll booths, satellite-directed
navigation systems
Health care
Online patient-monitoring, online medical
information systems, robotic surgery
Airlines
Ticketless travel, scheduling, Internet
purchases
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Table 7.4
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Process Redesign
 The fundamental rethinking of business
processes to bring about dramatic
improvements in performance
 Relies on reevaluating the purpose of the
process and questioning both the
purpose and the underlying assumptions
 Requires reexamination of the basic
process and its objectives
 Focuses on activities that cross
functional lines
 Any process is a candidate for redesign
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Ethics and Environmentally
Friendly Processes
Reduce the negative impact on the
environment
 Encourage recycling
 Efficient use of resources
 Reduction of waste by-products
 Use less harmful ingredients
 Use less energy
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