The five generic process types are project, job, batch, line and continuous. Figure 4.3 shows how each of these relates to the volume and variety of the transformation process. Each process type is associated with a particular combination of volume and variety. You saw in Chapter 1 how the volume/variety configuration provides clues to the nature of the firm’s core operations. Organizations who compete on cost usually rely on high volumes to achieve the low unit costs through economies of scale, which will be examined in more detail in Chapter 6. These result from the operation being able to use larger machines or more specialized workers. Economies also arise from the ability to purchase in bulk and have more control over the supply chain.
Increasingvolume Increasingvariety Project
Job Batch
Line Continuous
The choice of process type is strategically important, because firms are limited in what they can and cannot do once this has been decided.
To a large extent the process determines what the organization’s capabilities are, and how it delivers products and services to customers or clients.
Within an organization, different stages of production or different service activities may use different process types. For example, Carrefour, the French hypermarket chain, will predominantly sell goods in very high volumes, but within Carrefour’s stores some variety is available in the delicatessen areas within the shop, where each customer can select the quantity required of a particular item. Other supermarkets have begun to adopt this approach. Typically, though, a dominant process choice will be associated with the core process – in Carrefour’s case, high volume, low variety processes.
We will now consider each of the process types in turn, starting with the lowest volume processes, projects, and moving to the line and continuous flow processes.
Project
You are probably familiar with some high-profile activities, such as the construction of the London Eye, or the Sydney Olympics. The best process type for large-scale, complex products, or services that are low-volume or unique, is nearly always project. In manufacturing, aerospace and other high-tech products such as flight simulators, as well as most civil engineering and construction (e.g. bridges and tunnels), organize Figure 4.3 The five generic process choices.
operations as projects. In services, most consulting and other professional services can be classified as project work, because the relationship with each client is unique.
Whilst there is a degree of uniqueness associated with projects that does not exist for other process types, we still refer to it as a process.
That is, some common elements will be used from one project to the next. These common elements include the techniques used for project planning and scheduling. Easy-to-use tools such as Gantt charts are often employed for simple projects, whilst more sophisticated tools such as project network planning may be used for complex projects (this is discussed in more detail in Chapter 9). These are used to ensure that the individual nature of the customer requirements can be delivered.
In project environments, highly flexible and mobile staff are required. Consultants are often required to go where the work is – that is, they work around the client. Similarly, people working on major construction projects, such as dams, may travel all over the world.
Job
Many products are manufactured and services provided in very small quantities, sometimes as ‘one-offs’. The process choice associated with this is jobbing. Whilst projects are also associated with low-volume high-variety outputs, the high-variety of work is generally more limited than the complete individuality of projects, and there would at least be a largely common process between jobs. This is illustrated by the following examples.
A freelance graphic designer or book editor will provide jobbing services to advertising agencies and publishers respectively. In manu-facturing, jobbing is the closest process choice to traditional craft manufacturing. You would be likely to find jobbing used in making prototypes of new products and in making unique products, such as machines, tools and fixtures to make other products. Another example would be making clothing in the haute-couture industry.
As for projects, workers in jobbing work will need to be highly flexible. In manufacturing, because only small quantities of a single product are being processed at a time – and sometimes even ‘one-offs’
– the organization will generally invest in general-purpose machines rather than ones designed for a narrow range of products.
To support jobbing, detailed planning is required to decide what sequence each product will follow through the operation.
Batch
Batch production describes a process where products or services are produced in groups of similar (or mostly similar) outputs at higher volume and lower variety than in jobbing. The following example illustrates the difference between jobbing and batch processes. A jobbing printer would be able to copy a small quantity of notes for a lecture programme, with no expectation that the work would be repeated. Set-up costs would be low, but the unit cost would be high.
Batch printing would become appropriate where the same lecture programme was being run many times. There would be some set-up costs (e.g. for typesetting), and for each course a number could be produced but at a much lower unit cost.
Some businesses have no choice but to run batch processes. These are particularly evident where the product is in seasonal markets. Wine producers have to harvest their grapes, usually during just a few days each year, and get the product into production as quickly as possible.
They run an ‘annual batch’, or vintage.
Other examples of batch operations include a local bakery and all types of moulding, where a ‘master mould’ is created and products are pulled from the mould. A surgeon in a hospital will routinely batch together certain complementary surgical procedures to allow other specialists all to be present at the same time.
In batch production, particularly at the low-volume end (such as hand-laminating glass-reinforced plastics), we again find general-purpose machines. Operators may need to be able to perform multiple functions, as in jobbing, and especially be able to move to different workstations as and when required. Scheduling can be complicated, especially when new products and one-offs also have to be scheduled. At higher volumes more automation may be appro-priate, and special purpose machines may be used instead of general purpose. Batch is quite complicated to manage. One of the ways to help manage a range of products is to divide them into relatively high and low volumes. Low-volume batch production will resemble job processes; high-volume batch production will resemble a line process.
Line
At greater volumes than batch operations, products and services are usually highly standardized, with little variation between one unit of output and the next. Line operations are usually found when the
process can focus on a conversion activity that results in a single type of output, but where each stage of the process between input and output is distinct from the other stages.
High-volume, standardized products such as particular car models, televisions, stereos, DVDs and computers are particularly suited to line production. In services, line processes are used in the preparation of fast food or in handling standard financial paperwork such as mortgage applications. In either case, there is a set sequence of events in the conversion process.
The highly standardized products found in line processes are also associated with higher investments in technology, which may be unique to a firm or even a specific product line. Gillette’s $1 billion spend on developing the Mach 3 razor was predominantly taken up by development of the production process to make this product. This process is the subject of great secrecy and provides something their competitors have so far been unable to copy – three blades on a razor.
There are several disadvantages to using line production for any but the most standard products. The first is that line production is dedicated to a single product; the introduction of new products using the existing line is difficult. As discussed later in this chapter, operations managers now have a number of possibilities open to them should they need to increase the variety of products whilst still maintaining the advantages of a high-volume line process – in particular, low unit cost.
Continuous
Unlike the other four process types, continuous production does not result in discrete outputs (we cannot count or separate units of output within the production process). It is typically found where a process can be set up to run without stopping – some continuous processes run all day, every day, for a year or longer. Continuous production is applicable where products are totally standardized, such as in power generation, chemical refining, steel production and some food processing, but there are few service operations that are located in this high-volume, low-variety area. It is associated with very high investment in dedicated facilities and equipment, with work mainly automated and low levels of labour input beyond control and monitoring.
Continuous production differs from line production because the latter can be stopped at a particular stage of production and the production process can be restarted again without affecting the
product, whilst stopping a continuous process is generally avoided because production cannot easily be restarted without having to discard all of the materials being processed. In addition, there may be significant costs associated with the stoppage – shutting down blast-furnaces used in steel production generally requires that the furnace be re-lined, at a cost of many tens of thousands of pounds.
The process types given above are summarized in Table 4.1.
Whilst we can differentiate services according to the same process types as manufacturing organizations, other classifications shed more light on the nature of the processes we are describing.
The choice of process and layout has clear links with the product life cycle. The life-cycle diagram serves to show where a particular product is in its life cycle and where, consequently, it should be placed in terms of process choice. In the early stages of the product’s life the ‘focused’
Table 4.1 Summary of process types
Process type
Process characteristics
Project Highly flexible. Individualized output results in high unit costs.
Mobile and flexible staff required. Quality determined by individual customer requirements
Jobbing Significant flexibility required, though the volume is generally higher than when compared to projects. Some repetition in the system, and many more common elements to the process than occur with projects. High unit costs relative to higher volume processes, but low set-up costs
Batch Some flexibility to handle differences between batches still necessary, requiring some investment in set-up for each batch.
Higher levels of specialization required in both people and machines
Line Highly specialized people and machines allow high rates of
throughput and low unit costs. Limited flexibility usually associated with this process. Quality levels consistent.
Continuous Usually non-discrete products produced over a significant period of time. Very high levels of investment required and limited possibility for flexibility due to highly dedicated processes.
Commonly highly automated
Volume
Low volume
batch High volume
batch High volume
batch or line High volume
batch or line Low volume batch
Intro Growth Maturity Saturation Decline
Time
area of manufacture will be in a low-volume batch group; it may return to another low-volume focused area at the decline stage of its ‘life’. In the growth, maturity and saturation stages the product is best manufactured in a group of high-volume batch, and as volume increases single line processes are most appropriate, generally in
‘U’-shaped lines. The product life cycle and the link to process choice is shown in Figure 4.4:
There are two things to bear in mind with the product life cycle:
1 Not all products will go through each stage of the life cycle – in the UK the Sinclair C5 died very early in its product ‘life’
2 The length of time that a product may remain in a particular stage of the cycle will vary – the stages are not the same lengths of time for every product.
A firm must link manufacturing processes with product requirements and so movement from one process choice to another might take place when any of the following factors are present:
A new or substantially modified product is being introduced
Competitive factors and priorities have changed
Volume changes occur
The current performance of a product is inadequate
Competitors are gaining advantage by a better process approach or new technology.
Figure 4.4 The change of process choice in a product life cycle.
The point of the product life cycle in relation to manufacturing is that it reveals that, due to the changes in volume in a product’s life cycle, one fixed process is not necessarily sufficient or indeed applicable for a product for the duration of its life. As a result, flexible systems have to be in place to facilitate this change over a period of time. Investment in these processes, although expensive, is increasingly viewed as a competitive requirement. It is clear, therefore, that a standard line cannot hope to satisfy the market requirements of variety, flexibility and so on which will impact on products over a period of time. Instead,