BA 339 – OM – Chapters 7.pptVIP

BA 339 – OM – Chapters 78 Process Strategy Capacity Planning Definition Importance Process Strategies (see page 242, text) Process Analysis Design (tools) Service Process Design Equipment Technology Capacity Planning – Approaches Tools Economies Diseconomies of Scale Break-Even Analysis ERP Systems BA 339 – OM – Chapters 78 Process (Transformation) Strategy – “Organization’s approach to transforming resources into products services” Objective is to find a way to produce goods/services that: Meet customer requirements Meet product specifications Do so within cost, managerial, and market constraints Has long-term effect on efficiency/production, flexibility, cost, and quality Process decision drives strategy Exist on a continuum: process repetitive product BA 339 – OM – Chapters 78 Strategies Process focus 75% of global production devoted to low-volume, high variety products in “job shops” (organized around processes). Examples: Restaurant – bar, grill, bakery Advantages: Greater product flexibility, more general purpose equipment, lower capital investment Disadvantages: Higher variable costs, more highly trained personnel, more difficult production planning/control, low equipment utilization (5%-25%) Process design provides high degree of product flexibility; each process designed to perform a wide variety of activities and handle frequent changes Standard Register example (text, 6) BA 339 – OM – Chapters 78 Strategies Repetitive Use modules/nodes/cells (parts/components previously prepared, often in continuous process); modules combined for many product/output options Falls in between product process; classic assembly line (automobiles, appliances) Examples: Fast-food firms (quasi-custom product) Harley-Davidson – final assembly of multiple cells, nodes, or modules Economic advantages of continuous model and custom advantages of low-volume, high-variety (quasi-customization) BA 339 – OM – Chapters 78 Strategies Product (aka continuous or line flow pr