Strategy & Process Analysis

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Developing Operations StrategiesCorporate Objectives Requirements to meet Competition

Functional Areas

Operations

Business Strategies MarketingBusiness Plan Finance/Accounting

Marketing Plan Engineering

Production Plan SWOT analysis Others

Other Plans

Operations Objectives

Operation

Long- Range Decisions about products, Processes and Facilities

Positioning Production SystemFocus of Factories or Service Facilities

Product/Service Design and Development

Technology Selection and Process Development

Allocation of Resources to Alternatives

Facility Planning: Capacity, Location and Layout


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Operations Strategy Framework:

From Customer Needs to Order FacilitiesStrategic Vision

Customer Needs

New Products Current Products

Performance Priorities &

Requirements

Quality Dependability FlexibilityNew Product Price Speed After Sale

Development Service

Enterprise Capabilities

Operations Capabilities

Supplier Capabilities

Technology Systems People Distrib

R&D CIM JIT TQM - ution

Financial Support Platforms InformationManagement HRD Management


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Operations Strategy and Competitiveness

A strategy is a broad, long-term plan, conceived in order to

to achieve business objectives. These are developed at three

levels: The corporate level

The business level

The functional level

The functional level includes marketing, finance, and

human resources.

One of the key objectives of any business organization is to

reach a position where it is able to attract more customers

than its competitors. The characteristics of of a companys

operations function are important in determining its choiceof products and markets, and the elements of competitive

strength. Operational strengths can be used effectively as

competitive weapons.

Product/Process Expertise

Quick Delivery - Flexible Capacity


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Characteristics of To-days Business:

1. Shorter Product Cycle

2. Production Flexibility

3. Low-cost Process

4. Convenience and Location

5. Product Variety and Facility Size

6. Quality

Characteristics of the Product life Cycle

Sales

volume

Start-up Rapid Growth Maturation Commodity

Stages on decline


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Process Analysis

The term processcan be described as a set of tasks that

transform inputs into useful outputs. Detailed process

planning entails planning the steps of the process itself.A process usually consists of

(1) a set of tasks, (2) a flow of material and information that

connect the set of tasks, and (3) storage of material and

information.

Task: Each task in a process accomplishes, to a certaindegree, the transformation of input into the desired output

Flow: The flow of material involves the transfer of a product

from one task to it s next task. The flow of information helps

in determining how much of the transformation has beendone in the previous task and what exactly remains to be

completed in the present task.

Storage: When neither a task is being performed nor a part

being transferred, the part has to be stored. Goods in

storage, waiting to be processed by the next task often


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called work-in-process inventory.Process Flow Charting:

It focuses on the specific processes that raw materials, partsand subassemblies follow as they move through the

plant. Most common management tools used in planning

the process flow are:

assembly drawings

assembly charts

route sheets and

flow process charts

A flow process uses standard American Society of

Mechanical Engineers (ASME) symbols to denote whathappens to the product as it progresses through productive

facility. The symbols for the various processes are explained

at the side of the chart. As a rule, the fewer the delays and

storages in the process, the better the flow.


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A typical Flow Process ChartFeet Moved Dec. Min. Key

Materials received Storagefrom suppliers

0.250 Inspect Inspection95 1.500 to finish dept Transportation

0.060 Apply corrosive Operationtreatment

60 1.000 To raw stores

In raw stores

1.000 To drill press

40 90.000 Wait for drilloperator(setup)

0.236 Drill holes

94 1.500 Finish drill press


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Note:

An assembly drawings is simply an exploded view of the

product showing its component parts

An assembly chart (Gonzinto Chart)uses the informationpresented in the assembly drawing and defines how parts

go together, their order of assembly, and often the overall

material flow pattern.

An operation and route sheet specifies operations and

process routing for a particular part. It conveys such

information as the type of equipment, tooling, and

operations required to complete the part.

Process SelectionProcess engineering refers to the tactical planning activities

that regularly occur in manufacturing. Process selection,

in contrast, refers to the strategic decision of selecting which

kind of production processes to have in the plant.


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Types of Processes

At the most basic level. The types of processes can be

categorized as under:

Conversion processesChanging basic material into useful product.

Example: Iron ore to steel sheets

Fabrication processes

Changing raw material into some specific form.

Example: Forming sheet metal into a container or reactor.Assembly processes

Putting together many parts or components into a final

useful product.

Example: Engine or vehicle or compressorTesting processes

This is not, strictly speaking, a fundamental process, but it

is so widely mentioned as a stand-alone major activity that

it is included in some of the processes.

Example: Spectrometer for testing composition of metal.


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Process Flow Structures: (Product -Process Matrix)

It refers to how a factory organizes material flow using one

or more of the process technologies listed above.

Job Shop: Production of small batches of a large numberof different products, most of which require a different

set or sequence of processing steps.

Example: machine tool shops and plans that make

custom-designed PCBs or commercial printing.

Batch: A somewhat standardized job shop. Such a structure

is generally employed when a business is relatively stable

line of products, each of which is produced in periodic

batches, either to customer order or for inventory. Most of

these items follow the same flow pattern through the plant.Example: Heavy equipment, specialty chemicals.

Assembly line: Production of discrete parts moving from

workstation to workstation at a controlled rate, following

the sequence needed to build the product.

Example: Manual assembly of toys and appliances


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automobile assembly. When other processes are employed

in a line fashion along with assembly, it is commonly

referred to as production line.

Continuous flow: Conversion or further processing ofundifferentiated materials such as petroleum, chemicals, or

soft drinks. As on assembly lines, production follows a

predetermined sequence of steps, but the flow is continuous

rather than discrete.

Example: Sugar, Glass, Cement.

Measuring Product Development Performance:

There is some evidence that generating a steady stream of

new products to market may be extremely important toongoing profitability. To succeed, firms must be responsive

to changing customer needs and the moves of their

competitors. The ability to identify opportunities, mount the

development effort, and bring to market new products and

processes quickly is critical. Firms must bring new products


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and processes to market efficiently. Measures of product

development success can categorized into those that relate

to the speed and frequency of bringing new products on

line, to the productivity of the actual development process,

and to the quality of the actual products introduced. Taken

together, time, quality, and productivity define the

performance of development, and in combination with other

activitiessales, manufacturing, advertising, and customer

servicedetermine the market impact of the project and itsprofitability.

The following exhibit shows in detail the performance

measures for development projects.


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Performance Measures Impact on

Dimension Competitiveness

Time-to- market Frequency of new product introductions Responsiveness to

Time from initial concept to market customers/introduction competitors

Number started and number completed Quality of design-

Actual versus plan close to market

Percent of sales coming from new Frequency of

products projectsmodel life

Productivity Engineering hours per project Number of projects-Cost of materials and tooling per project freshness and breadth

Actual versus plan of line

Frequency of projects

- economics of

development

Quality Conformancereliability in use ReputationcustomerDesignperformance and customer loyalty

satisfaction Relative attractiveness

Yieldfactory and field to customersmarket

share

Profitabilitycost of

ongoing service

Strategy & Process Analysis

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