heizer10_ch07_sg - 7 Process Strategy and Sustainability...

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7 Process Strategy and Sustainability Summary Turning to the production of products or services, the objective of a process strategy is to meet customer requirements and product specifications within cost and managerial constraints. These decisions have a long-term effect and require careful consideration at the time of the initial investment. In general, there are four strategies that determine how a product or service is made: Process focus Repetitive focus Product focus, and Mass customization. The four strategies are different along two dimensions: the extent of volume required to satisfy demand and the degree of variety expected in output. Volume can run from low to high, while variety determines flexibility that must be included in the process. Figure 7.1 from the text, and shown below, shows the trade off that occurs because of a process strategy decision. Figure 7.2 in the text illustrates the flow of inputs and the resulting output from each of the process strategies. Table 7.2, in the text, summarizes important characteristics of each process. Process-focused strategies form the vast majority of global production. They provide a high degree of product flexibility for low volume demand, as products move intermittently between processes in batches. Machines and people handle frequent changes and perform many different activities. High variable costs and setup costs are a weakness of the process focus. Machining parts, printing, hospitals, and restaurants are examples. The product-focused, or continuous process, facility allows for high-volume, low variety (specialized) production. Process designers arrange machines and tasks according to the specific sequence of production. Flexibility is limited. However, because utilization of the facility also tends to be high (constantly running with little downtime), if the products or services are sold, then the fixed costs are recovered (commercial baked goods, steel, refining, and beer for example). Repetitive-focus facilities fall between the extremes of product and process-focused facilities. A repetitive-process uses modules, parts or components previously prepared, to achieve greater product variety than is possible in continuous production while allowing for rapid assembly of a variety of products. The repetitive focus is the classic assembly-line, having more structure than a process-focused facility, and achieving cost reductions versus process-focused facilities, while retaining some flexibility with regard to product mix and volume. Autos, motorcycles, and home appliances are examples. Note the basic product can move along a line, and customized by different parts that are available at key points. The final process strategy is mass customization. Mass customization allows for the rapid, low cost
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This note was uploaded on 11/24/2010 for the course DSIC 3152 taught by Professor B during the Fall '10 term at Fairleigh Dickinson.

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heizer10_ch07_sg - 7 Process Strategy and Sustainability...

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