Session 2 Process Fundamentals - OSCM356 Operations Management Session 2 Process Fundamentals Fuqiang Zhang Olin Business School Washington University

Session 2 Process Fundamentals - OSCM356 Operations...

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1OSCM356 Operations ManagementSession 2 Process FundamentalsFuqiang ZhangOlin Business SchoolWashington University in St. LouisSpring 2008Session outlineProcess strategyMajor process decisionsProcess flowchartsTools for evaluating process performanceBar chartPareto chart Fishbone diagramOSCM356, Spring 08, Prof. ZhangSession 2Slide 2
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2Process StrategyRecall… A process involves the use of an organization’s resources to provide something of value.A key question: How do you design the best business process?Process strategy is the pattern of decisions made in managing processes so that they will achieve their competitive priorities.OSCM356, Spring 08, Prof. ZhangSession 2Slide 3Major Process DecisionsProcess Structure determines how processes are designed relative to the kinds of resources needed, how resources are partitioned between them, and their key characteristics.Customer Involvement refers to the ways in which customers become part of the process and the extent of their participation.Resource flexibility is the ease with which employees and equipment can handle a wide variety of products, output levels, duties, and functions.Capital intensity is the mix of equipment and human skills in a process.OSCM356, Spring 08, Prof. ZhangSession 2Slide 4
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3Process Structuring in ManufacturingProcess choice: A way of structuring the process by organizing resources around the process or organizing them around the products.Job Process: A process with the flexibility needed to produce a wide variety of products, with considerable complexity and divergence in the steps performed. (e.g., customized cabinet)Batch process: A process that differs from the job process with respect to volume, variety and quantity. (e.g., standard components for assemble)Line process: A process that lies between the batch and continuous processes on the continuum; volumes are high and products are standardized, which allows resources to be organized around particular products. (e.g., auto, computer, appliances, toys)Continuous flow: The extreme end of high-volume, standardized production and rigid line flows, with production not starting and stopping for long time intervals. (e.g., oil refinery, steel, food)OSCM356, Spring 08, Prof. ZhangSession 2Slide 5Process Complexity, Divergence, and FlowProcess complexity: number and intricacy of the steps required to perform the processProcess divergence: extent to which the process is highly customized with considerable latitude as to how it is performedHigh divergence involves much judgment and discretion. Consulting and law, for exampleLow divergence is more repetitive and standardizedProcess flow, related to divergence, may range from highly diverse to linear.
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