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    BM60116 - Slides 12.0

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    BM60116 - slides 12.0

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    BM60116 - Slides 12.0

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    13-02-2024

    BM60116 – Modeling in Operations Management

    Process Selection and Facility


    Layout Decisions

    Sushil Punia
    VGSOM, IIT KGP

    Jan-May 2024

    Agenda
    • Process Strategies
    • Types of processes

    • Facility Decisions
    • Layouts decisions
    • Location decisions

    1
    13-02-2024

    Process Decisions
    An organization’s approach to transforming resources
    into goods and services.

    Objective:
    Produce goods and services within cost and
    managerial constraints.

    • Long-term decisions –and impacts


    • Cost and quality of products
    • Flexibility and efficiency of production units

    Process Strategies
    • Volume and Variety dictates the process strategies

    Four Basic Process Strategies:


    1) Process-focus Strategy,

    2) Product-focus Strategy,

    3) Repetition-focus Strategy, and

    4) Mass Customization Strategy.

    2
    13-02-2024

    Process Focus Strategy (low volume, high variety)


    e.g. Hospitals

     Facilities are organized around


    processes
     Intermittent processes
     Uses general purpose equipment
    and skilled personnel
     High product flexibility
     High costs
     Low equipment utilization

    Repetitive Focus Strategy (high volume, low variety)


    e.g. Automobile

     Facilities organized as assembly lines


     Use pre-fabricated modules - parts
    and assemblies
     Many output options
     Less flexibility but more efficient than
    process-focused facilities

    Used in fast-food restaurants, etc.


    6

    3
    13-02-2024

    Product Focus Strategy (very high volume, very


    low variety)
    e.g. Refinery, etc.

     Facilities are organized by


    product
     Continuous production
     Long runs
     Typically high fixed cost but low
    variable cost
     Less skilled labor
     Inflexible but high efficiency

    (high-volume, high-variety)
    Mass Customization Strategy e.g. Dell Computer

     Rapid, low-cost production


     High variety products
     Flexibility of a process focus with
    the efficiency of a product focus

    4
    13-02-2024

    Mass Customization Strategy


    The concept of customization is based on direct influence by the customer
    on one or more operational activities.

    Source: Lampel J, Mintzberg H (1996) Customizing customization. Sloan Manage Rev 38(1):21–30 9

    The case of LEGO


    Reading.

    Photo: LEGO 10

    5
    13-02-2024

    Competencies for Mass Customization


     Customer integration
     Product configuration systems
     Product modularity
     Central production and logistics planning
     Management of mass and individual production
     Flexible organization and processes
     Process documentation and IT support.

    11
    From Moser K (2007) Mass customization strategies—development of a competence-based framework for identifying different mass customization strategies. Lulu Enterprises, Inc., USA

    Product–Process Matrix: Process Selection


    High
    Variety
    Low

    12

    6
    13-02-2024

    Process Layouts
    In order to implement process types, we need to place resources in some
    fashions that is called layouts.

    • Project layout (e.g. Ship manufacturing)

    • Job shop (ex. Copy center making a single copy of a report)

    • Batch shop (ex. Copy center making 10,000 copies of an ad


    piece for a business)

    • Assembly Line (ex. Automobile manufacturer)

    • Continuous Flow (ex. Petroleum production)

    13

    Thanks.

    43

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