4. Processes and Technologies.doc

4. Processes and Technologies.doc - Processes and...

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Processes and Technologies BBA Program. Mahbub Parvez, Faculty of Business & Economics. DIU A process is a group of related tasks with specific inputs and outputs. Processes exist to create value for the customer, the shareholder or society. Process design defines what tasks need to be done and how they are to be coordinated among functions, people and organizations. Process Strategy is an organizations overall approach for physically producing goods and providing services. A firm’s process strategy defines its 1. Vertical Integration : The extent to which the firm will produce the inputs and control outputs of each stage of the production process. 2. Capital intensity : The mix of capital (i.e equipment, automation) and labor resources used in the production process. 3. Process flexibility : The ease with which resources can be adjusted in response to changes in demand, technology, products or services and resource availability. 4. Customer involvement : The role of customer in the production process. # Types of production processes There are four types of production process 1. Projects : Projects take a long time to complete, involve a large investment of funds and resources, and produce one item at a time to consume order. Examples include construction projects, shipbuilding, new-product development and aircraft manufacturing. 2. Batch production : Batch production processes many different jobs through the production system at the same time in groups or batches. Products are typically made to customer order, volume (in terms of customer order size) is low, and demand fluctuates. Examples of batch production include printers, bakeries, machine shops, education and furniture making. 3. Mass production : Mass production produces large volumes of a standard product for a mass market. Product demand is stable, and product volume is high. Goods that are mass produced include automobiles, televisions, personal computers, fast food and most consumer goods. 4. Continuous production : Continuous production is used for very high-volume commodity products that are very standardized. The system is highly automated and is typically in operation continuously 24 hours a day. Refined oil, treated water, paints, chemicals and foodstuffs are produced by continuous production. (Ref: p- 222) High Low Low High Standardization Fig: The Product-Process Matrix (pg-223) Page1 of 9 Volume Projects Batch Production Mass Production Continuous Production
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Processes and Technologies BBA Program. Mahbub Parvez, Faculty of Business & Economics. DIU # Process selection with Break-Even Analysis There are several quantitative techniques available for selecting a process. One that bases its decision on the cost trade –offs associated with demand volume is break-even analysis. The components of break-even analysis are volume, cost, revenue and profit.
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