7 Process Strategy and Sustainability - Faculty...
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© 2011 Pearson Education, Inc. publishing as Prentice Hall SCM 352 7 Process Strategy and Sustainability
Transcript of 7 Process Strategy and Sustainability - Faculty...
© 2011 Pearson Education, Inc. publishing as Prentice Hall
SCM 352
7 Process Strategy and Sustainability
© 2011 Pearson Education, Inc. publishing as Prentice Hall
Outline
• Global Company Profile: Harley Davidson• Four Process Strategies• Process Analysis and Design• Process Reengineering
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Harley Davidson
• The leading U.S. motorcycle company• Emphasizes quality and lean manufacturing• Materials as needed system• Many variations possible• Tightly scheduled repetitive production line
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Process Strategy
• 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
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Process Focusprojects, job shops
(machine, print, carpentry)
Standard RegisterGeneral Purpose
Hospital Repetitive(autos, motorcycles)
Harley DavidsonMcDonald’s
Product Focus(commercial baked goods, steel, glass)Nucor Steel
High Varietyone or few units per run, high variety(allows customization)Changes in Modulesmodest runs, standardized modulesChanges in Attributes (such as grade, quality, size, thickness, etc.) long runs only
Mass Customization(difficult to achieve, but huge rewards)Dell Computer Co.
Bellagio Hotel Buffet
Poor Strategy (Both fixed and variable costs
are high)
Low Volume
Repetitive Process
High Volume
VolumeFigure 7.1
Process, Volume, and Variety
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Process Focus
• Facilities are organized around specific activities or processes
• General purpose equipment and skilled personnel
• High degree of product flexibility• Typically high costs and low
equipment utilization• Product flows may vary
considerably making planning and scheduling a challenge
Bank
© 1995 Corel Corp.
Hospital
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Process Focus
(low volume, high variety, intermittent processes)Arnold Palmer Hospital
Many inputs(surgeries, sick patients,
baby deliveries, emergencies)
Many different outputs(uniquely treated patients)
Many departments and many routings
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Repetitive Focus
• Facilities often organized as assembly lines• Characterized by modules with parts and assemblies
made previously• Modules may be combined for many output options• Less flexibility than process-focused facilities but more
efficientFast Food
McDonald’sover 95 billion served
© 1984-1994 T/Maker Co.
© 1995 Corel Corp.
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Repetitive Focus Raw materials and module inputs
Modules combined for manyOutput options
(many combinations of motorcycles)
Few modules
(multiple engine models, wheel modules)
(modular)Harley Davidson
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Product Focus
• Facilities are organized by product• High volume but low variety of products• Long, continuous production runs enable efficient
processes• Typically high fixed cost but low variable cost• Generally less skilled labor
© 1984-1994 T/Maker Co.© 1995 Corel Corp.© 1995 Corel Corp.
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Product FocusFew Inputs
(corn, potatoes, water, seasoning)
Output variations in size, shape, and packaging
(3-oz, 5-oz, 24-oz package labeled for each material)
(low-volume, high variety, continuous process)
Frito-Lay
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Nucor Steel Plant
Con
tinuo
us c
aste
r
Continuous cast steel sheared into 24-ton slabs
Hot tunnel furnace - 300 ft
Hot mill for finishing, cooling, and coiling
D
E F
GHI
Scrap steel
Ladle of molten steelElectric furnace
A
BC
Product Focus
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Mass Customization
• The rapid, low-cost production of goods and service to satisfy increasingly unique customer desires
• Combines the flexibility of a process focus with the efficiency of a product focus
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Mass Customization Many parts and component inputs
Many output versions(custom PCs and notebooks)
Many modules
(chips, hard drives, software, cases)
(high-volume, high-variety)Dell Computer
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Process Flow Diagram
HarleyDavidson’sAssembly
Plant
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Value-Stream Mapping
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Service Blueprint
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Process Reengineering
• Starting with customer perspective and working backwards to satisfy customer needs
• The fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance
• Relies on reevaluating the purpose of the process and questioning both the purpose and the underlying assumptions
• Requires reexamination of the basic process and its objectives
• Focuses on activities that cross functional lines
Thank You
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