Logistics L2 Flashcards
(33 cards)
Manufacturing Process Decisions
The impact of people, facilities and physical layouts and information systems working together
The effect of the manufacturing processes on the overall business strategy
The impact many different types of manufacturing processes working together
Selecting a Manufacturing Process
- What are the physical requirements of the company’s product?
- How similar to one another are the products the
company makes? - What are the company’s production volumes?
- Where in the value chain does customization take
place (if at all)?
SIX types of Manufacturing Processes
(1) Job Shop
(2) Continuous (Flow) Process
(3) Batch Process
(4) Production Line
(5) Fixed Position Layout
(6) Hybrid Manufacturing Process
Job shop
A B C D E F A G
General-purpose equipment and broadly skilled workers
Functional layout: work areas are arranged by function
Requirements can change dramatically from one job to the next
Customized products
Highly flexible but not very efficient
Continuous (Flow) Process
AAAAAAAAAA
Large production volumes (24/7)
High level of automation
Production materials are gases, liquids, or powders (in
mining they are granular or chunky materials)
Basic material passed along, converted as it moves
Usually cannot be broken into discrete units
Usually very high fixed costs and inflexible
Batch-process
AA BC AA
Items are moved through the different manufacturing steps in groups, or batches
Moderate volumes, multiple products
Sequence of steps is not as tightly linked as a production line
Strikes a balance between the flexibility of a Job Shop
and the efficiency of a production line
Production Line
High-volume production of standard items with identical or highly similar designs
Processes arranged by product flow
Often “paced”Highly efficient, but not too flexible
Resources are arranged sequentially
Fixed-Position Layout
The position of the product is fixed.
Materials, equipment, and workers are transported
to and from the product.
Used in industries where the products are very
bulky, massive, or heavy and movement is
problematic
Hybrid Manufacturing Processes
Seeks to combine the characteristics and advantages of more than one classic process.
Machining centers
Group technology
Flexible manufacturing systems
4 levels of customization
Make-to-stock (MTS)
Assemble-to-order (ATO)
Make-to-order (MTO)
Engineer-to-order (ETO)
Make to stock
Products that require no customization, are made on demand forecasts and sold to the customer from
finished goods stock
the issue is how to forecast demand accurately
Books, television, spec homes, standard vacation package
Assemble to order
Products that are customized only at the very end of the manufacturing process from a stock of standard
❖ Computer systems, corporate training
make to order
Products that use standard component but production of the final product is linked to the final customer’s specifications
❖ Wedding invitations, air craft manufacture
Engineer-to-order (ETO)
● Products that are designed and produced from the unusual customer needs or requirements
❖ End-product tends to be complex
❖ Power plan boilers, electrical switch gear, industrial cranes
law of variability
The greater the random variability, either demanded of the process or inherent in the process itself or in the items processed, the less productive the process is
When customization occurs early in the supply chain
Flexibility in response to unique customer needs will be greater
Lead times to the customer will tend to be longer Products will tend to be more costly
When customization occurs late in the supply chain
Flexibility in response to unique customer needs will be limited
Lead times to the customer will tend to be shorter Products will tend to be less costly
How different services are organized and managed
The service package
The degree of customization
The level of customer contact
The service package
Includes all value-added physical and intangible activities
The greater the emphasis on physical activities, the more attention will be directed to capital expenditures, material costs and other tangible assets
○ Example: airline, trucking
The greater the emphasis on intangible activities, the more critical are the training and retention of skilled employees and the development of the firm’s knowledge assets
○ Example: law firm, software developer
Service customization
Ranges from highly customized to standardized
● High: greater flexibility and highly responsive to customer’s needs (car repair)
● Low: more emphasis on controlling process and improving productivity (oil shop)
● As the degree of customization increase, the service package become less predictable and more variable
Customer contact
relates to the importance of front-room or back-room operations.
Front room ➔ The physical or virtual point where the customer interfaces directly with the service organization
◆ What the customer can see
◆ Managed for flexibility and customer service
● Customer lobbies, back teller, receptionist
● Back room ➔ The part of a service operation that is completed without direct customer contract
◆What the customer does not see
◆ Managed for efficiency and productivity
● Package sorting, accounting department, car repair
Managerial Challenges in Service
Environments
Nature of the service package
- Primarily physical activities Greater emphasis on managing physical assets (airline, trucking firm)
- Primarily intangible activities greater emphasis on managing people and knowledge assets (law firm, software developer)
Degree of customization
- Lower customization greater emphasis on closely controlling the process and improving productivity (quick-change oil shop)
- Higher customization greater emphasis on being flexible and responsive to customers’ needs (full-service car repair shop)
Degree of customer contact
- Lower contract more of the service package can be performed in the back room. Service layout, location and hours will be based more on cost and productivity concerns (mail sorting)
- Higher contract more of the service package must be performed in the front room. Service layout, location and hours must be designed with customer convenience in mind (physical therapist)
Service blueprinting
➔ A specialized form of business process mapping that lays out the service process from the viewpoint of the customer & parses out the organization’s service actions based on
◆ The extent to which an action involves direct interaction with the customer
◆ Whether an action takes place as a direct response to a customer’s needs
Layout decisions
Product-based layout ➔ Arranges resources sequentially, according to the steps required
Functional layout ➔ Physically groups resources by function
Cellular layout ➔ Production resources are dedicated to a subset of products with similar requirements
Fixed position layout ➔ Productive resources are moved to where product is made or service is being provided
