73 12 process strategies process strategies involve

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73-12 Process Strategies Process Strategies Involve determining how to produce a product or provide a service Objective Meet or exceed customer requirements Meet cost & managerial goals Has long-run effects Product & volume flexibility Costs & quality
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73-13 Types of Process Strategies Types of Process Strategies Continuum Continuum Process strategies that follow a continuum Within a given facility, several strategies may be used These strategies are often classified as: Repetitive- Focused Product-Focused Process-Focused
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73-14 Process-Focused Strategy Process-Focused Strategy Facilities are organized by process Similar processes are together Example: All drill presses are together Low volume, high variety products ‘Jumbled’ flow Operation Product A Product B 1 1 1 1 2 2 2 2 3 3 3 3 Other names Intermittent process Job shop
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73-15 Process Focus Process Focus
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73-16 Process-Focused Strategy Examples Process-Focused Strategy Examples Bank © 1995 Corel Corp. Machine Shop © 1995 Corel Corp. Hospital © 1995 Corel Corp.
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73-17 Process Focused Strategy - Process Focused Strategy - Pros & Cons Pros & Cons Advantages Greater product flexibility More general purpose equipment Lower initial capital investment Disadvantages High variable costs More highly trained personnel More difficult production planning & control Low equipment utilization (5% to 25%)
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73-18 Repetitive Focused Strategy Repetitive Focused Strategy Facilities often organized by assembly lines Characterized by modules Parts & assemblies made previously Modules combined for many output options Other names Assembly line Production line
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73-19 Repetitive Focus Repetitive Focus
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73-20 Repetitive Focused Strategy - Repetitive Focused Strategy - Considerations Considerations More structured than process-focused, less structured than product focused Enables quasi-customization Using modules, it enjoys economic advantage of continuous process, and custom advantage of low-volume, high-variety model
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73-21 Repetitive-Focused Strategy - Examples Repetitive-Focused Strategy - Examples Truck © 1995 Corel Corp. Clothes Dryer © 1995 Corel Corp. Fast Food McDonald’s over 95 billion served McDonald’s over 95 billion served © 1984-1994 T/Maker Co.
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73-22 Flow Diagram Showing the Production Process for Flow Diagram Showing the Production Process for Harley Davidson, York, PA. Harley Davidson, York, PA.
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73-23 Product-Focused Strategy Product-Focused Strategy Facilities are organized by product High volume, low variety products Where found Discrete unit manufacturing Continuous process manufacturing Operation Products A & B 1 1 2 2 3 3 Other names Line flow production Continuous production
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73-24 Product Focus Product Focus
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73-25 Product-Focused Strategy Product-Focused Strategy Pros & Cons Pros & Cons Advantages Lower variable cost per unit Lower but more specialized labor skills Easier production planning and control Higher equipment utilization (70% to 90%) Disadvantages Lower product flexibility More specialized equipment Usually higher capital investment
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