Chapter 7. Process Strategy Flashcards
Dell’s approach to personal computer manufacturing is to use a product focus, which gives the company its low-cost competitive advantage
False (Global company profile, easy)
A firm’s process strategy is its approach to transforming resources into goods and services
True (Introduction, easy)
In process-focused facilities, equipment utilization is low.
True (Four process strategies, moderate)
The typical full-service restaurant uses a product-focused process.
False (Four process strategies, moderate)
Harley-Davidson, because it has so many possible combinations of products, utilizes the process strategy of mass customization.
False (Four process strategies, moderate)
A value-stream map includes both (1) inventory quantities, and (2) symbols for customers and suppliers.
True (Process analysis and design, moderate)
The assembly line is a classic example of a repetitive process.
True (Four process strategies, easy)
One essential ingredient of mass customization is modular design.
True (Four process strategies, moderate)
The tool that calculates which process has the lowest cost at any specified production volume is a crossover chart
True (Four process strategies, moderate)
The term focused processes refers to the quest for increased efficiency, whether in goods or services, that results from specialization
True (Four process strategies, moderate)
Service blueprinting is a process analysis technique that focuses on the customer and the provider’s
interaction with the customer.
True (Process analysis and design, moderate)
Activity times should not be included in a service blueprint
False (Process analysis and design, moderate)
A process map with the addition of a time axis becomes a process chart
False (Process analysis and design, moderate)
Time-function mapping is a flow diagram with time added to the horizontal axis
True (Process analysis and design, moderate)
Process maps use distance, but not time, to show the movement of material, product, or people
through a process
False (Process analysis and design, moderate)
Professional services typically require low levels of labor intensity.
False (Service process design, moderate)
An example of the postponement strategy for improving service productivity is having the
customer wait until you have sufficient time to serve the customer.
False (Service process design, moderate)
Process control is the use of information technology to monitor and control a physical process.
True (Production technology, easy) {AACSB: Use of IT}
One use of camera-and-computer-based vision systems is to replace humans doing tedious and
error-prone visual inspection activities.
True (Production technology, easy) {AACSB: Use of IT}
Automated storage and retrieval systems are commonly used in distribution facilities of retailers.
True (Production technology, moderate) {AACSB: Use of IT}
Flexible manufacturing systems, because of easily changed control programs, are able to perform
such tasks as manufacturing one-of-a-kind parts economically.
True (Production technology, moderate) {AACSB: Use of IT}
Production technology has had a major impact on services, but as yet there has been little reduction
in service labor requirements
False (Technology in services, moderate) {AACSB: Use of IT}
Optical checkout scanners and ATMs are examples of technology’s impact on services
True (Technology in services, moderate) {AACSB: Use of IT}
Successful process redesign focuses on departmental areas where small, continuous improvements
can be made.
False (Process redesign, moderate)
Processes can be environmentally friendly and socially responsible while still contributing to
profitable strategies.
True (Ethics and environmentally friendly processes, easy) {AACSB: Ethical Reasoning}
In selecting new equipment and technology, decision-makers look for flexibility—the ability to
respond with little penalty in time, cost, or customer value.
True (Selection of equipment and technology, moderate)
Which of the following statements regarding Dell Computer is false?
a. Dell is a practitioner of the mass customization process.
b. Dell builds its computers overseas in order to gain a low-cost advantage.
c. Dell keeps very little inventory of finished goods.
d. Dell utilizes a global supply chain, but assembles its computers in the U.S.
e. Dell’s research focuses on manufacturing issues, not computer part design.
b (Global company profile, moderate)
An organization’s process strategy
a. will have long-run impact on efficiency and flexibility of production
b. is the same as its transformation strategy
c. must meet various constraints, including cost
d. is concerned with how resources are transformed into goods and services
e. All of the above are true.
e (Introduction, moderate)
A job shop is an example of a(n)
a. repetitive process
b. continuous process
c. line process
d. intermittent process
e. specialized process
d (Four process strategies, moderate)
Three types of processes are
a. goods, services, and hybrids
b. manual, automated, and service
c. process focus, repetitive focus, and product focus
d. modular, continuous, and technological
e. input, transformation, and output
c (Four process strategies, moderate)
Which of the following industries is likely to have low equipment utilization?
a. auto manufacturing
b. commercial baking
c. television manufacturing
d. chemical processing
e. restaurants
e (Four process strategies, moderate)
A product-focused process is commonly used to produce
a. high-volume, high-variety products
b. low-volume, high-variety products
c. high-volume, low-variety products
d. low-variety products at either high- or low-volume
e. high-volume products of either high- or low-variety
c (Four process strategies, moderate)
Which one of the following products is most likely made in a job shop environment?
a. a daily newspaper
b. paper forms
c. television sets
d. cigarettes
e. canned vegetables
b (Four process strategies, moderate)
Which of the following products is likely to be assembled on a repetitive process line?
a. automobiles
b. personal computers
c. dishwashers
d. television sets
e. all of the above
e (Four process strategies, moderate)
An assembly line is an example of a
a. product-focused process
b. process-focused process
c. repetitive process
d. line process
e. specialized process
c (Four process strategies, moderate)
Standard Register
a. has dozens of U.S. plants in its Forms Division
b. groups people and machines into departments that perform specific activities
c. utilizes a product strategy to keep production volume high
d. obtains its low-cost advantage by not spending money on CAD systems
e. obtains its low-cost advantage by specializing in a relatively small number of products
b (Four process strategies, moderate)
Which of the following transformations generally has the highest equipment utilization?
a. process-focused process
b. repetitive process
c. product-focused process
d. specialized process
e. modular process
c (Four process strategies, moderate)
Harley Davidson
a. utilizes job shops to make each of its modules
b. uses product focused manufacturing
c. uses a large number of modules to build a small number of different bikes
d. uses work cells to feed its assembly line
e. All of the above are true.
d (Four process strategies, moderate)
Which of the following is false regarding repetitive processes?
a. They use modules.
b. They allow easy switching from one product to the other.
c. They are the classic assembly lines.
d. They have more structure and less flexibility than a job shop layout.
e. They include the assembly of basically all automobiles
b (Four process strategies, moderate)
When done correctly, mass customization
a. increases pressure on supply chain performance
b. helps eliminate the guesswork that comes with sales forecasting
c. drives down inventories
d. increases pressure on scheduling
e. all of the above
e (Four process strategies, moderate)
Which of the following phrases best describes product focus?
a. low volume, high variety
b. finished goods are usually made to order
c. processes are designed to perform a wide variety of activities
d. high fixed costs, low variable costs
e. raw material inventories are low relative to the value of the product
d (Four process strategies, difficult)
Which of the following phrases best describes process focus?
a. low volume, high variety
b. finished goods are usually made to a forecast and stored
c. operators are modestly skilled
d. high fixed costs, low variable costs
e. raw material inventories are high relative to the value of the product
a (Four process strategies, difficult)
Which of the following characteristics best describes repetitive focus?
a. It uses sophisticated scheduling to accommodate custom orders.
b. Its output is a standardized product produced from modules.
c. It is too expensive when volumes are low or flexibility is required.
d. It is widely used for the manufacture of steel.
e. Its costs are often known only after a job is done
b (Four process strategies, difficult)
Utilization in process-oriented facilities is frequently low because
a. the postponement strategy for improving service productivity is being used
b. scheduling in process-oriented facilities is not very complex
c. with high fixed costs, utilization is not very important
d. excess capacity for peak demands is desirable
e. low raw material inventories cause machines to be idled
d (Four process strategies, moderate)
A quasi-custom product
a. gets its apparent customization from the combinations available from a small number of
modules
b. is often the output of repetitive focus facilities
c. is a valid description of a fast-food sandwich
d. is only possible when the focus strategy of service productivity improvement is in use
e. All but d are true
e (Four process strategies, moderate)
Process A has fixed costs of $1000 and variable costs of $5 per unit. Process B has fixed costs of
$500 and variable costs of $15 per unit. The crossover point between process A and process B is
a. 50 units
b. 200 units
c. $2,500
d. $5,000
e. $9,500
a (Four process strategies, moderate) {AACSB: Analytic Skills}
Process X has fixed costs of $10,000 and variable costs of $2.40 per unit. Process Y has fixed costs
of $9,000 and variable costs of $2.25 per unit. Which of the following statements is true?
a. The crossover point is approximately 6667 units.
b. It is impossible for one process to have both of its costs lower than those of another process.
c. Process Y is cheaper than process X at all volumes; there is no crossover point.
d. Process X should be selected for very large production volumes.
e. Process X is more profitable than process Y and should be selected
c (Four process strategies, moderate) {AACSB: Analytic Skills}
The crossover point is that production quantity where
a. variable costs of one process equal the variable costs of another process
b. fixed costs of a process are equal to its variable costs
c. total costs equal total revenues for a process
d. total costs for one process equal total costs for another process
e. the process no longer loses money
d (Four process strategies, moderate)
Product Focused processes
a. allow more customization, but are not very efficient
b. are desirable because resource needs increase slowly with the complexity of a process
c. are processes that are specialized for relatively few products or customer groups
d. apply only to service firms, not to manufacturers
e. are profitable because customers demand flexibility, not specialization
c (Process analysis and design, moderate)
Value Stream Mapping
a. is a variation on time function mapping
b. examines the supply chain to determine where value is added
c. extends time function mapping back to the supplier
d. starts with the customer and works backwards
e. All of the above are true.
e (Process analysis and design, moderate)
One fundamental difference between a process chart and a process map is that
a. the process chart uses a time dimension while a process map is not time-oriented
b. the process chart includes the supply chain, while the process map stays within an organization
c. the process chart is more like a table, while the process map is more like a schematic diagram
d. the process chart focuses on the customer and on the provider’s interaction with the customer,
while the process map does not deal directly with the customer
e. None of these is true, because a process chart and a process map are the same thing.
c (Process analysis and design, moderate)
Service blueprinting
a. provides the basis to negotiate prices with suppliers
b. mimics the way people communicate
c. determines the best time for each step in the process
d. focuses on the provider’s interaction with the customer
e. can only be successful with two-dimensional processes
d (Service process and design, moderate) {AACSB: Communication}
A drawing of the movement of material, product, or people is a
a. flow diagram
b. process chart
c. service blueprint
d. process map
e. none of the above
a (Process analysis and design, moderate)
Strategies for improving productivity in services are
a. separation, self-service, automation, and scheduling
b. lean production, strategy-driven investments, automation, and process focus
c. reduce inventory, reduce waste, reduce inspection, and reduce rework
d. high interaction, mass customization, service factory, and just-in-time
e. none of the above
a (Service process design, moderate)
In mass service and professional service, the operations manager should focus on
a. automation
b. equipment maintenance
c. sophisticated scheduling
d. human resources
e. all of the above
d (Service process design, moderate)
In mass service and service factory quadrants of the service process matrix, the operations manager
could focus on all of the following except
a. automation
b. standardization
c. tight quality control
d. removing some services
e. customization
e (Service process design, moderate)
Which of the following is true regarding opportunities to improve service processes?
a. Automation can do little to improve service processes, because services are so personal.
b. Layout is of little consequence, since services seldom use an assembly line.
c. If a work force is strongly committed, it need not be cross-trained and flexible.
d. All of the above are true.
e. None of the above is true.
e (Service process design, moderate)
Which of the following are typical of process control systems?
a. They have sensors.
b. The digitized data are analyzed by computer, which generates feedback.
c. Their sensors take measurements on a periodic basis.
d. The sensors’ measurements are digitized.
e. all of the above
e (Production technology, moderate) {AACSB: Use of IT}
Which of the following is true regarding vision systems?
a. They are consistently accurate.
b. They are modest in cost.
c. They do not become bored.
d. All of the above are true.
e. None of the above is true.
d (Production technology, moderate) {AACSB: Use of IT}
The use of information technology to monitor and control a physical process is known as
a. process control
b. computer-aided design
c. information numeric control
d. numeric control
e. none of the above
a (Production technology, moderate) {AACSB: Use of IT}
Which of the following technologies would enable a cashier to scan the entire contents of a shopping cart in seconds? a. ASRS b. AGV c. CAD/CAM d. RFID e. FMS
d (Production technology, moderate) {AACSB: Use of IT}
"Automatic placement and withdrawal of parts and products into and from designated places in a warehouse" describes a. AGV b. CAD/CAM c. CIM d. ASRS e. FMS
d (Production technology, moderate) {AACSB: Use of IT}
Computer-integrated manufacturing (CIM) includes manufacturing systems that have
a. computer-aided design, a flexible manufacturing system, inventory control, warehousing and
shipping integrated
b. transaction processing, management information systems, and decision support systems
integrated
c. automated guided vehicles, robots, and process control
d. robots, automated guided vehicles, and transfer equipment
e. all of the above
a (Production technology, moderate) {AACSB: Use of IT}
Which one of the following technologies is used only for material handling, not actual production or assembly? a. robots b. CNC c. CAD d. AGVs e. FMS
d (Production technology, moderate) {AACSB: Use of IT}
A system using an automated work cell controlled by electronic signals from a common centralized computer facility is called a(n) a. adaptive control system b. robotics c. flexible manufacturing system d. automatic guided vehicle (AGV) system e. manufacturing cell
c (Production technology, moderate) {AACSB: Use of IT}
“Operators simply load new programs, as necessary, to produce different products” describes
a. CAD
b. automated guided vehicles
c. flexible manufacturing systems
d. vision systems
e. process control
c (Production technology, moderate) {AACSB: Use of IT}
Which of the following is not one of the essential ingredients for mass customization?
a. high machine utilizations
b. personnel and facility flexibility
c. reliance on modular design
d. rapid throughput
e. very effective scheduling
a (Four process strategies, moderate)
Advances in technology
a. have impacted the manufacturing sector only
b. have had only limited impact on services
c. have failed to change the level of customer interaction with an organization
d. have had dramatic impact on customer interaction with services and with products
e. have dramatically changed health care, but have not changed retailing
d (Technology in services, moderate)
Process redesign
a. is the fundamental rethinking of business processes
b. can focus on any process
c. tries to bring about dramatic improvements in performance
d. focuses on activities that cross functional lines
e. all of the above
e (Process reengineering, moderate)
Ethical and environmentally friendly processes include which of the following?
a. emission controls
b. recycling
c. efficient use of resources
d. reduction of waste by-products
e. all of the above
e (Technology in services, moderate) {AACSB: Ethical Reasoning}
Making environmentally sound products through efficient processes
a. is unprofitable, as long as recyclable materials prices are soft
b. is known as lean manufacturing
c. can still be profitable
d. is easier for repetitive processes than for product-focused processes
e. none of the above
c (Ethical and environmentally friendly processes, moderate) {AACSB: Ethical Reasoning}
Flexibility can be achieved with
a. movable equipment
b. inexpensive equipment
c. sophisticated electronic equipment
d. modular equipment
e. all of the above
e (Selection of equipment and technology, moderate)
Which of the following statements regarding ethical and environmentally friendly processes is
true?
a. Operations managers can be environmentally sensitive, but they must avoid following a low
cost strategy.
b. Processes can be environmentally friendly or socially responsible, but not both.
c. Operations managers can be environmentally sensitive and still follow a low cost strategy.
d. Using energy-efficient lighting saves so little that it should not be labeled environmentally
friendly.
e. The only business strategy consistent with ethical and environmentally sensitive management
is the differentiation strategy.
c (Ethical and environmentally friendly processes, moderate) {AACSB: Ethical Reasoning}
Which of the following is true regarding the concept of flexibility?
a. It is the ability to change production rates with little penalty in time, cost, or customer value.
b. It can be accomplished with sophisticated electronic equipment.
c. It may involve modular, movable, even cheap equipment.
d. All of the above are true.
e. None of the above is true
d (Selection of equipment and technology, moderate)
An organization’s approach to transforming resources into goods and services is called its
_____________.
process strategy (Introduction, moderate)
The process strategy that is organized around processes to facilitate low-volume, high-variety
processes is called a(n) ________________.
process focus (Four process strategies, moderate)
______________ is a process strategy that uses a product-oriented production process that uses
modules.
Repetitive focus (Four process strategies, moderate)
____________ is a rapid, low-cost production process that caters to constantly changing unique
customer desires.
Mass customization (Four process strategies, moderate)
_____________ represent an organization’s attempt to gain increased efficiency through
specialization, which can include, for example, concentrating on certain classes of customers
Focused processes (Four process strategies, moderate)
A(n) _______________ uses symbols to analyze the movement of people or material.
process chart (Process analysis and design, easy)
A special form of time-function mapping, which goes beyond the organization into its supply
chain, is _____________.
value stream mapping (Process analysis and design, moderate)
______________ is a process analysis technique that focuses on the customer and the producer’s
interaction with the customer.
Service blueprinting (Process analysis and design, easy)
The strategy for improving service productivity that customizes at delivery, rather than at
production, is _____________.
postponement (Service process design, moderate)
___________ involves the ability to respond with little penalty in time, cost, or customer value.
Flexibility (Selection of equipment and technology, moderate)
__________ is the use of information technology to control a physical process
Process control (Production technology, moderate) {AACSB: Use of IT}
___________ is a computer-controlled warehouse that provides for the automatic placement of
parts into and from designated places within the warehouse.
Automated storage and retrieval system or ASRS (Production technology, moderate)
{AACSB: Use of IT}
A(n) __________ uses an automated work cell controlled by electronic signals from a common
centralized computer facility
flexible manufacturing system or FMS (Production technology, moderate) {AACSB: Use of
IT}
_______________ is the fundamental rethinking and radical redesign of business processes to
bring about dramatic improvements in performance.
Process reengineering (Process redesign, moderate)
What is Dell Computer’s source of competitive advantage? In a short paragraph, explain some of
the steps Dell has taken to develop this advantage.
Dell’s competitive advantage is in its process strategy, which is mass customization. Dell
spends most of its research budget on efficient installation and configuration of PCs, rather
than on new computer parts. Dell builds PCs only when ordered. Dell utilizes various
methods to keep inventory low. Dell utilizes the Internet to enhance productivity (Global
company profile, moderate)
Why is Harley-Davidson identified as a repetitive manufacturer, not a mass customizer?
Harley-Davidson manufactures a variety of motorcycles on an assembly line. They are not a
product-focused process. While Harley-Davidson’s motorcycles display lots of variety, they
are not as individualized as Dell’s personal computers. The variety comes from choices in
predefined modules, and there is apparently no place for a customer to get customization that
would go beyond what is available in these modules. (Four process strategies, moderate)
What is the link between focused processes and specialization? What kinds of focus are possible?
Focused processes are a means of obtaining increased productivity through forms of
specialization. Focus can take several forms, including concentrating on specific classes of
customers, working only with products in selected product families, specializing in a specific
service, or working with a narrow range of technology. (Four process strategies, moderate)
Describe Value Stream Mapping. Explain how it is different from process mapping
Value Stream Mapping is a variation on time-function mapping or process mapping. The most fundamental difference between them is that Value Stream Mapping is not confined to the organization itself. In particular, in its analysis of where value is added, it extends the analysis to the organization’s supply chain. (Process analysis and design, moderate)
How are modules useful in manufacturing processes?
Modules are parts or components of a product previously prepared. By using modules, the
product can be quickly assembled. Using a different combination of modules allows for
quasi-customization. (Four process strategies, moderate)
What is mass customization?
Mass customization is rapid, low-cost production of goods and services that fulfill
increasingly unique customer desires. It brings us the variety of products traditionally
provided by the process focus, with low costs associated with standardized high volume
production (the product focus). (Four process strategies, moderate)
Name the four basic process strategies; describe them in a complete sentence or two each
The four process strategies are process focus, product focus, repetitive focus, and mass
customization. Process is a job shop–high variety and low volume; repetitive is an assembly
line–relatively standardized products with options from modules; product is for high volume,
low variety, such as oil refining, flour milling; mass customization is for high volume, high
variety. (Four process strategies, moderate)
Why is equipment utilization in process-focused service industries often low?
Equipment utilization is low because excess capacity to meet peak demand loads is often
desirable, and scheduling is typically difficult. (Four process strategies, moderate)
Compare an intermittent process to a continuous process on the basis of variety, volume,
equipment utilization, and inventory.
Intermittent has high variety, low volume, low utilization, general purpose equipment. Since
most output is made to order, there is little inventory of raw materials or finished goods.
Continuous has low variety, high volume, high utilization, and specialized equipment. Just-intime practices keep inventory very low. (Four process strategies, moderate)
The textbook described four basic process models, and hinted that there are others. Construct an
example of a hybrid process. Can this process be applied in any well-known organization? How
common do you think hybrid processes are?
Most students will graft elements of process onto elements of product or repetitive. Examples
may include food service, where “process” may typify most operations, but salad bars add an
element of “repetitive.” In health care, hybrids of process and repetitive can readily be
found. (Four process strategies, moderate) {AACSB: Reflective Thinking}
In an affluent society, how do we produce a wide number of options for products at low cost?
In an affluent society we produce a wide variety of options for products at low cost, primarily
by use of modular components assembled in repetitive facilities, but automation is allowing
more overlap of different types of production processes. (Four process strategies, moderate)
Name the tools of process analysis and design. Describe them in a sentence or two each.
Four tools of process analysis and design include flow diagrams, time-function mapping,
process charts, and service blueprinting. Flow diagrams are a schematic or drawing of the
movement of material, product, or people. Time-function mapping is a flow diagram, with
the addition of time on the horizontal axis. Process charts use symbols, time, and distance to
provide an objective and structured way to analyze and record the activities that make up a
process. Service blueprinting focuses on the customer and the provider’s interaction with the
customer. (Process analysis and design, moderate)
Provide an example of the focus strategy for improving service productivity
The focus strategy refers to restricting the offerings. Examples will vary, but a restaurant
with a limited menu would be one example. (Service process design, moderate)
Provide an example of the postponement strategy for improving service productivity.
The postponement strategy refers to customizing the product at delivery, not at production.
Examples will vary, but a home builder might leave some tasks unfinished until the house is
sold, so that the buyer can make those final decisions. Carpeting, paint colors, cabinet doors,
and some appliance choices might be good examples. (Service process design, moderate)
Identify the typical elements in a process control system.
Sensors collect data; analog devices read data on a periodic basis; measurements are digitized
and transmitted to a computer; data are analyzed; and output occurs in the form of signals,
diagrams, charts, messages, etc. (Production technology, moderate) {AACSB: Use of IT}
Identify the advances being made in technology to enhance production.
Technology used to enhance production include numerical control, process control, vision
systems, robots, automated storage and retrieval systems, automated guided vehicles, flexible
manufacturing systems, and computer integrated manufacturing. (Production technology,
moderate) {AACSB: Use of IT}
Identify the techniques for improving service productivity. For any two techniques, describe in a
short paragraph, and include an example
The seven techniques are separation, self-service, postponement, focus, modules, automation,
scheduling, and training.
• Separation: structuring the service such that the customer must go where the service is
offered (a medical facility)
• Self-service: let customers perform their own comparisons (supermarket shopping)
• Postponement: customizing at time of delivery or in the final stages of the process (dealer
installed versus factory installed options on automobiles, boats, etc.; Wendy’s
Hamburgers)
• Focus: restricting the product offerings, options, or degree of customization allowed
(limited number of factory installed options on a new automobile)
• Modules: services selected from modular choices (health insurance programs)
• Automation: identifying services that may lend themselves to automation (automatic teller
machines)
• Scheduling: precise personnel scheduling (keep close watch on how many checkout lanes
are needed)
• Training: clarifying options, teaching problem avoidance (maintenance personnel,
counselors) (Service process design, difficult)
Explain, in your own words, what a flexible manufacturing system is. List the benefits of flexible
manufacturing systems.
An FMS is a system using an automated work cell controlled by electronic signals from a
common centralized computer facility. Benefits of an FMS include improved capital
utilization, low direct labor cost, reduced inventory, and consistent quality. (Production
technology, moderate) {AACSB: Use of IT}
Describe some major challenges to implementing a successful build-to-order system?
Product design must be imaginative and fast. Process design must be rapid, flexible, and
able to accommodate changes in design and technology. Inventory management requires
tight control. Tight schedules that track orders and material from design through delivery
can be effectively implemented only with dedicated personnel. Responsive partners in the
supply chain yield effective collaboration. (Four process strategies, moderate)
Identify five examples of technology’s impact on services. Specifically, identify one of these that
has led to labor cost reductions. Discuss briefly. Can you add an item, not identified in the
textbook, to this list?
Textbook identifies about three dozen examples. Students may add examples like PointCast
(or other “push” information technologies), Amazon.com (fully electronic Internet-based
shopping), or examples from entertainment (video gaming, network gaming). (Technology in
services, moderate) {AACSB: Use of IT}
Why do modern operations managers look for flexibility in their equipment?
Flexibility in equipment provides managers the ability to respond to changes in demand with
little penalty in time, cost, or customer value. (Selection of equipment and technology,
moderate)
How are environmental issues linked to the process choice? Won’t being an environmentally
conscious firm drive up costs and take away any competitive advantage? Discuss, with examples to
support your position.
Environmental issues are directly on point in the process decision. The process choice selects
equipment that has emissions, creates waste in work or in packaging, etc. Not all
environmentally conscious activities are cost-adding. But even if they were, cost is not the
only thing affected. Customers may be attracted to products that are made from recycled
materials, or that are more recyclable. This translates into revenue enhancement, not an
element of cost. The competitive advantage centers on the customer, not the cost.
(Environmentally friendly processes, moderate) {AACSB: Ethical Reasoning}
Four Process Strategies
Process strategy—An organization’s approach to transforming resources into
goods and services.
The objective of a process strategy is to build a production process that meets customer requirements and product specifications within cost and other managerial
constraints.
Virtually every good or service is made by using some variation of one of four process strategies:
+ Process focus—A facility organized around processes to facilitate low- volume, high-variety production.
The vast majority of global production is devoted to making low-volume,
high-variety products in process-focused facilities, also known as job shops or
intermittent process facilities.
Process-focused facilities have high variable costs with extremely low utilization (5% to 25%) of facilities.
+ Modules—Parts or components of a product previously prepared, often in a continuous process.
+ Repetitive process—A product-oriented production process that uses modules.
The repetitive process is the classic assembly line. It allows the firm to use modules and combine the economic advantages of the product-focused model with the customization advantages of the process-focus model.
j Product focus—A facility organized around products; a product-oriented, high volume, low-variety process.
Product-focused facilities are also called continuous processes because they have very long, continuous production runs.
The specialized nature of a product-focused facility requires high fixed cost;
however, low variable costs reward high facility utilization.
+ Mass customization—Rapid, low-cost production that caters to constantly
changing unique customer desires.
+ Build-to-order (BTO)—Produce to customer order rather than to a forecast.
Major challenges of a build-to-order system include: Product design, Process
design, Inventory management, Tight schedules, and Responsive partners.
+ Postponement—The delay of any modifications or customization to a product as long as possible in the production process.
+ Crossover chart—A chart of costs at the possible volumes for more than one
process.
Selection of Equipment
Picking the best equipment involves understanding the specific industry and
available processes and technology. The choice requires considering cost, quality, capacity, and flexibility.
+ Flexibility—The ability to respond with little penalty in time, cost, or customer
value.
Process Analysis and Design
Five tools of process analysis are (1) flowcharts, (2) time-function mapping,
(3) process charts, (4) value-stream mapping, and (5) service blueprinting.
+ Flowchart—A drawing used to analyze movement of people or materials.
+ Time-function mapping (or process mapping)—A flowchart with time added on
the horizontal axis.
+ Process charts—Charts that use symbols to analyze the movement of people or
material.
Process charts allow managers to focus on value-added activities and to compute
the percentage of value-added time (5 operation time/total time).
+ Value-stream mapping (VSM)—A tool that helps managers understand how to add value in the flow of material and information through the entire production process.
+ Service blueprinting—A process analysis technique that lends itself to a focus on the customer and the provider’s interaction with the customer.
Special Considerations for Service Process Design
services can be classified into one of four quadrants, based on relative degrees of labor and customization:
1. Service factory 2. Service shop 3. Mass service 4. Professional service
Techniques for improving service productivity include:
+ Separation—Structuring service so customers must go where the service is offered
+ Self-service—Customers examining, comparing, and evaluating at their own pace
+ Postponement—Customizing at delivery
+ Focus—Restricting the offerings
+ Modules—Modular selection of service; modular production
+ Automation—Separating services that may lend themselves to a type of automation
+ Scheduling—Precise personnel scheduling
+ Training—Clarifying the service options; explaining how to avoid problems
Production Technology
+ Computer numerical control (CNC)—Machinery with its own computer and
memory.
+ Additive manufacturing—The production of physical items by adding layer upon
layer, much in the same way an ink jet printer lays down ink; often referred to as 3D printing.
+ Automatic identification system (AIS)—A system for transforming data into
electronic form (e.g., bar codes).
+ Radio frequency identification (RFID)—A wireless system in which integrated circuits with antennas send radio waves.
+ Process control—The use of information technology to control a physical process.
+ Vision systems—Systems that use video cameras and computer technology in inspection roles.
+ Robot—A flexible machine with the ability to hold, move, or grab items.
+ Automated storage and retrieval systems (ASRS)—Computer-controlled
warehouses that provide for the automatic placement of parts into and from designated places within a warehouse.
+ Automated guided vehicle (AGV)—Electronically guided and controlled cart used
to move materials.
+ Flexible manufacturing system (FMS)—Automated work cell controlled by
electronic signals from a common centralized computer facility.
+ Computer-integrated manufacturing (CIM)—A manufacturing system in which CAD, FMS, inventory control, warehousing, and shipping are integrated.
Technology in Services
Many rapid technological developments have occurred in the service sector.
These range from POS terminals and RFID to online newspapers and e-books.
Process Redesign
Process redesign—The fundamental rethinking of business processes to bring about dramatic improvements in performance.
Process redesign often focuses on activities that cross functional lines.
Low-volume, high-variety processes are also known as:
a) continuous processes.
b) process focused.
c) repetitive processes.
d) product focused
b
A crossover chart for process selection focuses on:
a) labor costs.
b) material cost.
c) both labor and material costs.
d) fixed and variable costs.
e) fixed costs.
d
Tools for process analysis include all of the following except:
a) flowchart.
b) vision systems.
c) service blueprinting.
d) time-function mapping.
e) value-stream mapping.
b
Customer feedback in process design is lower as:
a) the degree of customization is increased.
b) the degree of labor is increased.
c) the degree of customization is lowered.
d) both a and b.
e) both b and c
c
Computer-integrated manufacturing (CIM) includes manufacturing systems that have:
a) computer-aided design, direct numerical control
machines, and material-handling equipment controlled
by automation.
b) transaction processing, a management information system,
and decision support systems.
c) automated guided vehicles, robots, and process control.
d) robots, automated guided vehicles, and transfer equipment
a
Global Company Profile: Harley-Davidson
- The only major U.S motorcycle company
- Emphasizes quality and lean manufacturing
- Materials as Needed (MAN) system
- Many variations possible
- Tightly scheduled repetitive production
