C
hapter 4
Key operations questions
In Chapter 4 – Process design – Slack
et al
. identify the
following key questions:
• What is process design?
• What objectives should process design have?
• How does volume and variety affect process design?
• How are processes designed in detail?
To
design
:
design (v.) 1540s, from Latin
designare
"mark out,
devise, choose, designate, appoint"
from de- "out" (see
de-
) + signare "to mark," from signum "a mark, sign". Originally in
English with the meaning attached to
designate
; many modern uses of design are
metaphoric extensions.
to form or conceive in the mind; to invent, to work
out the structure or form of (something), as by
making a sketch, outline, or pattern for a specific
purpose; to mark out or designate the boundaries
and functions of the system
Nature and purpose of the design activity
Products, services and the processes which produce
them all have to be designed.
• Product/service design has an impact on the
process design and vice versa.
In manufacturing operations overlapping the activities of
product and process design is beneficial.
In most service operations the overlap between service
and process design is implicit in the nature of service.
4.5
The design of products/services and processes are interrelated
and should be treated together
Products and services should be designed in such a way
that they can be created effectively and efficiently.
Effective = doing the right things (goals)
Efficient = doing the right things in the right way
(performance)
The design of your operations is the
mould where your planning is going to be
based
Delay (a wait, e.g. for materials)
Operation (an activity
that directly adds
value)
Inspection (a check of
some sort)
Transport (a movement
of something)
Storage (deliberate
storage, as opposed to a
delay)
Process mapping symbols
derived from ‘Scientific
Management’
Decision (exercising discretion)
Process mapping symbols
derived from Systems
Analysis
Direction of flow
Input or Output from the
process
Activity
Beginning or end of
process
Designing processes
• There are different ‘process types’.
• Process types are defined by the volume and
variety of ‘items’ they process.
• Process types go by different names depending
on whether they produce products or services in
different volume and variety.
A production process transforms resources into
products/services (including the customer!)
Process design
Volume-variety and design
The four V’s of
operations were
volume, variety,
variation and
visibility. The first two
usually go together
(high variety usually
means low volume,
high volume normally
means low variety).
Volume and variety
determine the way
we design
performance
objectives - quality,
speed,
dependability,
flexibility and cost
X
X
Hi
gh
Volume
Low
High
V
ari
ety
Project
Low
Manufacturing process types
Process
tasks
Process
flow
Diverse/
complex
Repeated/
divided
Intermittent
Continuous
Jobbing
Batch
Mass
Contin-uous
One-off, complex, large scale, high work content
‘products’
Specially made, every one customized
Defined start and finish: time, quality and cost objectives
Many different skills have to be coordinated.
Very small quantities: ‘one-offs’, or only a few required
Specially made. High variety, low repetition. ‘Strangers’
every one customized
Skill requirements are usually very broad
Skilled jobber, or team, complete whole product.
Higher volumes and lower variety than for jobbing
Standard products, repeating demand. But can make
specials
Specialized, narrower skills
Set-ups (changeovers) at each stage of production.
4.13
Higher volumes than batch
Standard, repeat products (‘runners’)
No set-ups, or almost instantaneous ones.
Low and/or narrow skills
Extremely high volumes and low variety: often single
product
Standard, repeat products (‘runners’)
Highly capital-intensive and automated
Few changeovers required
Difficult and expensive to start and stop the process.
Volume
Low
High
V
ari
ety
Low
Hi
gh
Service process types
Process
tasks
Process
flow
Diverse/
complex
Repeated/
divided
Intermittent
Continuous
Professional
service
Service shop
Mass service
Professional service
High levels of customer (client) contact.
Clients spend a considerable time in the service process.
High levels of customization with service processes being
highly adaptable.
Contact staff are given high levels of discretion in
servicing customers.
Medium levels of volumes of customers
Medium, or mixed, levels of customer contact
Medium, or mixed, levels of customization
Medium, or mixed, levels of staff discretion.
High levels of volumes of customers
Low to medium levels of customer contact
Low, or mixed, levels of customization
Low, or mixed, levels of staff discretion.
4.19
Variety
Volume
Deviating from the ‘natural’ diagonal on the product–process
matrix has consequences for cost and flexibility
None
None
The ‘natural’ line of fit of process to
Project
Jobbing
Batch
Mass
Continuous
Manufacturing
operations
process types
Professional
service
Service
shop
Mass
service
Service
operations
process types
More process
flexibility than
is needed so
high cost
Less process
flexibility than
is needed so
high cost
Standard sandwich process
Raw
materials
Assembly
Stored
sandwiches
Move to
outlets
Stored
sandwiches
Customer
request
Sell
Take
payment
Customized sandwich – old process
The operation of
making and selling
customized
sandwiches
The outline process of
making and selling
customized sandwiches
Prepare Assemble as required Take payment Bread and base filling Stored Fillings Assemble whole sandwich Customer request Use standard ‘base’? Assemble from standard ‘base’ No YesThe detailed process of
assembling customized
sandwiches
Sandwich materials and customers Customers ‘assembled’ to sandwichesBread and
base filling
Assembly of
‘sandwich
bases’
Assemble from
standard ‘base’
Take
payment
Assemble whole
sandwich
Customer request
Use standard
‘base’?
No
Yes
Fillings
Stored ‘bases’
Flow process charts for processing expense
Send to accounts receivable
Reports to batch control
Reports filed Confirm payment
Report arrives
Stamp and date report Send cash to receipt desk Wait for processing Check expenses report
Wait for processing
Check employee record Check advance payment
Send to account payable Wait for processing
Attach payment voucher
Collect retorts into batch Check against rules
Wait for processing
Batch control number Check payment voucher Log report
Batch to audit desk Wait for batching
Batch of reports logged
Copy of reports to filing
Description of activity 8 1 2 4 5 6 7 9 10 3 18 11 12 14 15 16 17 19 20 13 26 22 23 24 25 21
Payment voucher to keying
Before
Reports to batch control
Reports filed Payment voucher to keying
Confirm payment Report arrives Stamp and date report Check expenses report
Wait for processing Check reports and vouchers Attach payment voucher Collect retorts into batch
Batch control number Batch to audit desk Wait for batching
Copy of reports to filing
Description of activity Totals 8 1 2 4 5 6 7 9 10 3 11 12 14 15 13 5 5 2 2 1
After
Performance objectives
Speed
Dependability
Flexibility
Cost
Quality
services i.e. architects vs electricity company
architects, the final aesthetic appearance of the building and the appropriateness of its detailed design.
electricity supply company, quality is exclusively
concerned with error-free service – electricity must be constantly available in the correct form (in terms of voltage, frequency, etc.).
For architects means negotiating a completion date with each client, based on the client’s needs and the
architects’ estimates of how much work is involved in each project. Speed in the electricity utility means literally instant delivery. No electricity company could ask its customers to wait for their ‘delivery’ of electricity
For architects means keeping to each individually negotiated delivery date. In continuous operations, dependability often means the availability of the service. A
dependable electricity supply is one which is always there.
For architects means the ability to design many different kinds of buildings according to its clients’ various requirements. With the electricity company’s process, the need for product flexibility has disappeared entirely but the ability to meet almost instantaneous
Architects: Low
economies of scale and high product variability make product more expensive to produce Electricity: High
economies of scale and cost variability makes it less expensive to produce
4.25
Performance objectives
• Quality
• The meaning of quality has shifted from being concerned primarily with the performance and
specification of the product or service towards conformity to a predefined standard, as we move from low volume-high variety operations through to high volume-low variety operations.
• Speed
• Speed means an individually negotiated delivery time in low volume-high variety operations, but moves towards meaning ‘instant’ delivery in some high volume-low variety operations.
• Dependability
• Dependability has moved from meaning ‘on-time delivery’ in low volume-high variety operations to ‘availability’ in high volume-low variety operations.
• Flexibility
• Flexibility has moved from meaning product flexibility in low volume-high variety operations to volume flexibility in high volume-low variety operations.
• Cost
• Cost, in terms of the unit cost per product or service, varies with both the volume of output of the operation and the variety of products or services it produces. When variety of products or services in low-volume operations is relatively high, running the operation will be expensive because of the flexible and high skill levels employed. Further, because the volume of output is relatively low, a few products or services are bearing the operation’s high cost base. Also, and more significantly for the operation, the cost of each product or service is different. At the other end of the scale, high-volume operations usually produce similar products or services, output is high, so that whatever the base cost of the operation, it is shared among a high number of products or services. Cost per unit of output is therefore usually low for operations such as the electricity utility but, more significantly, the cost of
Throughput (TH) = Work In Process (WIP) x Cycle Time (CT)
Little’s law (a really quite useful law)
Cycle time
= 2 mins
Throughput time = ?
WIP = 10
Throughput time = 10 × 2 mins
Throughput time = 20 mins
Throughput efficiency =
Work content
Throughput time
× 100
Throughput efficiency is the work content of whatever is
being processed as a percentage of its throughput time
0 20% 40% 60% 80% 100% Low
X
X
X
High utilization but
long throughput times
Low utilization but
short throughput times
Reduce process
variability
High 10 mins 30 mins Arrival frequency (demand) Processing timeUtilization = 33.33 % Q = 0
A
v
e
ra
ge
leng
th
of
qu
eue
X
Utilization = 50 % Q = 0
20 minsX
10 minsUtilization = 100 % Q = 0
X
Utilization = 100 % Q = infinity
9 minsX
5–15 mins 5–15 mins Arrival frequency (demand) Processing timeUtilization = <100% % Q = >0
Proc
es
s
throu
gh
pu
t
time
(or i
nv
entory
)
Throughput time
and capacity
utilisation
10 20 30 40 50 60 70 80 90 100
0
Utilization
A
v
erage number
of
uni
ts
w
ai
ti
ng to
be proc
es
s
ed
Decreasing
variability
10 20 30 40 50 60 70 80 90 100
0
Utilization
A
v
erage number
of
uni
ts
w
ai
ti
ng to
be proc
es
s
ed
X
Y
Z
High utilization
but long waiting
time
Reduction in
process
variability
Short waiting
time but low
utilization
(a) Decreasing variability allows higher
utilization without long waiting times.
(b) Managing process capacity
and/or variability.
