Operation Process

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Unit 2

Operations Processes

Dr. Prashant B. Kalaskar

Syllabus

2.1: Process Characteristics in Operations: Volume, Variety,

Flows, Types of Processes & Operations System,

continuous flow & intermittent flow system.

2.2: Process Product Matrix: Job production, batch

production, Assembly line & Continuous flow process &

production layout

2.3: Service System Design Matrix: Design of Service

system, Service Blue print

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Process Design

What is Process Design..?

Why Process Design..?

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Process Design

- The objective of organization is to provide products &

services, to satisfy customers & to create value for them.

- A product & service design is based on the customer

feedback and requirement of the market.

Ex: Plane Salted Potato Chips to Spicy Chips or like Kurkure

- Process design is where the product is broken down into

parts, which further can be helpful in the actual

manufacturing process.

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Process Design

- Designing means to conceive the looks, arrangements

and workings of something before it is created.

- It is based on the objectives of design like volume &

variety characteristics etc.

- Process design can be the design of new facilities or it

can be the modification or expansion of existing facilities.

- The design starts at a conceptual level and ultimately

ends in the form of fabrication and construction plans.

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Operations Management

• Operation Management involves two major activities.

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Operations Management

Process Design Process Control

1) Product Development2) Choice of Technology3) Manufacturing Process4) Output Capacity5) Quality & Cost of Product

1) Effective & Efficient Utilization of Available resources

Supported Tasks: Demand Forecasting, Production Planning, Scheduling, QC, Maintenance Management & SCM

Operation Process

• Operation is a process designed to convert input in to a

valuable product or Service (Transformation).

• Designing a Process may provide competitive advantage

to the firms.

• The Raw Materials, Information, Ideas, capital etc.

becomes the inputs in a Manufacturing Process to result

in desire output i.e. a Product or Service

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Operation Processj


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Operation Process

• Improvisation in the process designs adds value & helps

companies to perform better

• Well designed Operation process allows companies to;

- Lower cost of Manufacturing

- Efficiency in Operations

- High Quality Products to deliver higher value

- Reduction in Process time

- Reduction in Lead Time for the Customers

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Selection of Process may result in Competitive Advantage..

1) Low-cost operations

2) High performance design

3) Consistent quality

4) Fast delivery time

5) On-time delivery

6) Development speed

7) Product customization

8) Volume flexibility


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Process Strategyj


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Variety

Low

Medium

High

Volume

Low Medium High

Project

Manufacturing Cell

Work-center

AssemblyLine

ContinuousProcess

Product Process matrixj


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Job Shop Production

Batch Production

Mass Production

Continuous Production

Volume

Variety

Low

Medium

High

Low Medium High

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Process Focus (Job Shop)

- Low volume, high variety, “do it all”

- High amount of flexibility

- Each job is different

- Relatively high cost per unit

- Considerations in Process Selection/Evaluation

- Unit cost decreases as standardization increases, & production

increases.

- Flexibility decreases as volume, standardization increase

Determinants of Process Characteristics

1) Volume:

2) Variety:

3) Flow:

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1) Volume:

- “It is he average quantity of products produced in any

manufacturing system”

- High Volume Production system manufacture large

number of products in a day (Mass Production)

Ex: An auto-parts manufacturer might create thousands of units

exactly the same parts to send to automobile factories.

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1) Volume:

- High Volume manufacturers uses variety of processes to

manufacture high output of materials

- Ex: Assembly lines are another high volume manufacturing

process where goods are put together piece-by-piece by human

workers, machines or a combination of the two.

- Each worker or machine in the assembly performs a specific task,

then passes a unit on to another worker or machine until all the

tasks necessary to create a final product are performed.

- Advantages: High Sales, Cost Efficiency, Faster Production

- Disadvantage: High Space Cost, No Customization of product

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1) Volume:

- Low Volume: Production system manufacture small

number of products in a day

- Small scale business with low demand choose this

method of Manufacturing

Advantages: Space Cost is Low, Low level of Inventory,

Customization of products is possible

Disadvantages: Low volume of Sales, Slower Production Cost of

production high, Less profits

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2) Variety: “Number of Alternative products or Variants

that a company produces”

- A Watch making company Titan is manufacturing

40000+ variants of watches

- TELCO manufactures various varieties of Tata Indica cars

- More the varieties, more will be alternative production

resources & Materials, skilled workers & increases no. of

stages in production

- Ex: A Travel agent is booking Bus, Rail & Air Tickets

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3) Flow: “The materials under the transformation process

to get converted in product has different flows”

- The flow indicates the various stages through which the

Raw Materials (Input) is passing through to get

converted into Finished Product.

- Knowledge flow is also an vital aspect of Production

Process

- More the Volume, Less the Varieties, both influences

the flow

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5 Key Decisions in Process Management

1) Process Choice

2) Vertical Integration

3) Resource Flexibility

4) Customer Involvement

5) Capital Intensity

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5 Key Decisions in Process Management

1) Process Choice: It is most critical step to select a

process choice in Process Management.

- Manufacturing & service operations can be characterized/

Classified as one of the following:

1) Project

2) Job Shop

3) Batch Flow

4) Line Flow

5) Continuous Flow

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5 Key Decisions in Process ManagementProcess Choice

1) Project Process: Examples of a project process are

building a shopping center, running a political

campaign, developing a new technology or product.

- The project process requires a high degree of job

customization

- The sequence of operations and the process involved in

each one are unique to each project, though they may

look similar

- It involves many interrelated tasks must be completed,

requiring a close coordination.

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2) Job Shop Process: Examples are custom metal processing

shop, hospital emergency rooms etc.

- Flexibility needed to produce a variety of products or

services with high degree of customization & low Volume

- Each new order is handled as a single unit as a job

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3) Batch Flow Process: Examples of a batch flow process

are scheduling an air travel, manufacturing garments,

furniture manufacturing etc.

- Volumes are higher because the same or similar products or

services are provided repeatedly

- A narrower range of products or services is provided.

- Some of the components for the final product or service

may be produced in advance.

- Larger quantities per batch, Repetition of Same Products

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4) Line Flow Process: Examples of Products produced by

line process include automobiles, appliances, personal

computers, toys and fast-food restaurants .

- A line flow process lies between the batch and

continuous processes

- High Volume Production, Standardized Products, hence

resources can be well organized

- Materials move linearly from one operation to the next

according to a fixed sequence

- Repetition of same process with little or no variability

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4) Line Flow Process: line flow processes often follow a

make-to-stock strategy, with standard products held in

inventory so that they are ready when a customer places

an order.

- Sometimes the Line Flow process is also called as Mass

Production

- The pacing of production may be either machine-paced

or worker-paced.

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5) Continuous Flow Process: Examples are petroleum

refineries, chemical plants, and plants making beer, steel,

and processed food items.

- Such firms are also referred to as the process industry

- A continuous process is the extreme end of high-volume,

standardized production with rigid line flows

- The process often is capital intensive and operated round

the clock to maximize utilization and to avoid expensive

shutdowns are start-ups.

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Vertical Integration

• Every Manufacturing organization performs various

processes to provide value to their customers (Value Chain).

• Some of these services the Organization can Outsource

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Inbound Logistics Operations Outbound Logistics Sales & Mktg. After Sales Services

Supplier of Raw Materials


• More the vertical integration, less will be outsourcing.

• These decisions are sometimes called make-or-buy

decisions, with

- Make decision meaning more integration &

- A buy decision meaning more outsourcing.

- Backward & Forward Integration are two types

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• Advantages of Vertical Integration:

1) Expansion in domestic as well international Markets

2) Cost savings due to resource, skills & volume sharing

3) Ensured & better quality & improved delivery time

4) Better utilization of Core Competencies of both parties

5) By integrating with upstream firms, company can

provide better quality products and services to their

customers.

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Resource Flexibility

• For a better competitive advantage, a company needs to

have resource flexibility like employees, facilities, and

equipment

• Employee flexibility is new product (design)

customization using available facilities (resources)

• Another flexibility is capacity flexibility, which is used to

increase or decrease output without affecting

profitability

Ex: A Fast Food Restaurant remaining open for 24 hours in a day

from 12 hours working a day

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• Flexible Work Force: An Operation Manager should give

on & off the job training to their workforce to make them

flexible at point of work station.

• Worker flexibility can be one of the best ways to achieve

reliable customer service and improve capacity holdups.

• Work Flexibility is required when Volume is flexible

Ex: Bank operations have rotational jobs to their

employees so as to manage work force in the peak hours

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• Flexible Equipment: For products with high degree of

Customization & Low volume of output, one should use

Inexpensive & Flexible Equipments.

• Specialized, higher-cost equipment is the best choice

when volumes are high and customization is low.

• Flexible equipments allows to reduce fixed cost

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Customer Involvement

• The fourth significant process decision is the extent to

which customers interact with the process.

• The amount of customer involvement may range from

self-service to customization of product.

• Self Service: Toys, bicycles companies preferred to let the

customer perform the final assembly because production,

shipping, and inventory costs frequently are lower

• Product Customization: Custom-designed and built homes are

the examples where the customers are involved in product

customization

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Capital Intensity

• For either the design of a new process or the redesign of

an existing one, an operations manager must determine

the amount of capital intensity required.

• Capital intensity is the mix of equipment and human skills

in the process; the greater the relative cost of

equipment, the greater is the capital intensity.

• With increase in Production output manager can decide

to go little to semi to full automation of equipments.

• Increasing output lowers the capital intensity

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Types of Processes & Operations System

• The process & Operation system is classified based on

the product flow.

• Product flow is based on capacity availability & utilization

• Two types of Operation Systems are

1) Continuous Flow System

a) Process Industry

b) Mass Production

2) Intermittent Flow System

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Continuous Flow System

• As the name indicates, the production system flows

continuously until the final product is finished.

• All the activities are streamlined & well organized

• The raw materials passes through predefined stages to

get converted into final product

• The process involved are sequential, hence resources

must be organized in systematic manner

• Ex: Manufacturing of Petrochemical, Pharmaceutical,

Cement, Paper Manufacturing, Electricity Generation etc.

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• All the raw materials required to manufacture the final

product are fed in the system & the process begins

• Once the process starts it can not be stopped until final

product stage is finished (Unstoppable/Continuous flow of System)

• Standardized products, Large Volume of Production, the

system can be configured in orderly manner for a

continuous Production System

• Discrete Manufacturing System is where different components are manufactured

separately & then they are combined (assembled) into final product

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Continuous Flow System in Process Industry

• Process industry may involve various stages & may also

involve chemical reactions to produce final product.

• In continuous flow, sometime the process can be

stopped in between to produce byproducts so as to

outsource it to other company to produce final product

Ex: Continuous flow system manufacturing in Paper Industry

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Continuous Flow System in Paper Mfg. Industry

• The paper manufacturing is divided in 3 stages

1) Preparatory Stage

2) Pulp Making Stage

3) Paper making Stage

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Continuous Flow System in Paper Mfg. Industryj


Logs & Chips of Wood Stored

Crushing of Logs & Chips

Processing of the Wood

Cleaning & BleachingDrying of the wood

PulpRefining of the wood

Pulp

Cutting Final PackingStretching, Rolling papers in Presses

Preparatory Stage

Pulp Making Stage

Paper Making Stage

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Continuous Flow System in Paper Mfg. Industryj


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Continuous Flow System in Process Industry

• Requirements:

1) Balancing of Capacity at all stages of Processing to

maintain even flow of raw materials & finished products

2) Under utilization of capacity should be avoided

3) Productivity (output) is completely dependent on flow

rate of materials

4) Initial capital requirement is high, incremental investment

in later stages is not possible

5) High productivity allows to reduce production cost

6) Good Maintenance facility to avoid frequent stoppage

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• Mass production is characterized as High Volume & Low

Variety

• The resources & equipments can be sequentially

organized for each variant to be manufactured, which

allows a streamlined flow (product line structure)

• The product line structure is also called as Product Layout

Ex: Two wheeler Mfg. unit or Electrical Products like

switches, disposable syringes manufacturing etc.

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Continuous Flow System in Mass Production

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Product A Product B Product C

Pre Manufacturing Activities

Machining Machining Machining

Fabrication Fabrication Fabrication

Assembly Assembly Assembly

Testing Testing Testing

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• Requirement:

1) Capacity balancing at all the levels is important to

maximize productivity

2) Line Stoppage or Breakdown may detriment

Productivity

3) Better maintenance management system is must to

avoid production held ups

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Example

Intermittent Flow System

• Intermittent means something that starts (initiates) and

stops (halts) at irregular (unfixed) intervals (time gaps).

• These goods are produced on a small scale.

• Goods are produced based on customer's orders.

• Products produced of large varieties & of different sizes.

• The design of these products goes on changing.

• The flow of production is intermittent (not continuous).

• Therefore, this system is very flexible.

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Intermittent Flow Systemj


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Intermittent Flow Systemj


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•Examples:

•The goldsmith makes goods (Gold Ornaments) on a small-scale basis

as per his customer's requirements. Here, ornaments are not done on

a continuous basis.

• The work of a tailor is also based on the number of orders he gets

from his customers. The clothes are stitched for every customer

independently by the tailor as per one's measurement and size.


• Increasing Competition & Changing Customer Demand

forcing companies to manufacture variety of Products

• Ex: A car manufacturing company manufactures many

variants of Cars (MS WagonR- Lxi, Vxi, Zxi, Vdi, Zdi, Auto)

• Available resource can not be dedicated completely to

each variant

• Resources has to be shared for variants for cost

management.

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• Every variant will have different processing & sequence

• Intermittent flow is also called as Mid Volume or Mid

Variety flow system

• Each variant’s flow system may result in complex flows of

activities or Product Layout

• Such Complexities in flow can be managed by Batch

manufacturing

• One batch One variant, Other Batch, Other Variant

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• Ex: In Food Products manufacturing industry, ingredients

like Preservatives & Additives can be used in different

products.

• When one batch is over, the plant is stopped, made some

modifications in process & changes in raw materials to

produce other variants (In Pharma industry medicines are

manufactured by Batch production method)

• Requirement: Balancing the Capacity Flow not as vigorously

as in case of Continuous Flow System

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Process Flow Diagram

• Every Process boundaries has two points

1) Entry Point of Inputs &

2) Exit Point of Output

• Process Flow Diagram allows to understand the stage of

process using various graphic element

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Inverted Triangle CirclesRectangles Arrows

• Rectangle: It represents a Task

• Arrows: It represents the direction of flow of Materials or

Flow of Information

• Inverted Triangle: It represents storage (inventory). [For

the storage of inventory, bins are used. The inventory can of

Materials, Semi Processed or Finished Products inventory]

• Circle: Represents Storage of Information

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Process Flow Diagram

Some Important Terminologies

• Assemble to Product (ATO): A Product is Made from the

assembling of Stock materials (subassemblies)

• Bottleneck: Something that limits/reduces output/capacity

• Buffering: A area where stages are operating separately

other than routine assembly line (Extra Line to meet Target)

• Cycle Time: It is the average elapsed time between starting

a job & finishing a job

• Engineer to Order: Newly designed product which have not

been previously Engineered.

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• Flow Time: It is the average time that a unit requires to flow

through the process from the start to finishing point

• Lead Time: Time interval between the start & end point of

activity (response time). It can be the time between placing

the order & receipt of order.

• Make to Order (MTO): Previously engineered products

making only after receipt of order

• Make to Stock (MTS): Making of products & stocking it,

until order from the customer arrives

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• Manufacturing Cell: A self sufficient unit, where final

product is manufactured using all family parts

• Process Capacity: Maximum output per unit time

• Multiple Stage Process: Product is manufactured at multiple

stage. Semi products are manufactured at all the stages

which later is combined with next stage Process.

• Throughput Rate (Flow Rate): The average rate at which a

product passes from one assembly point to the other

assembly point

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Layout

Layout planning is determining the best physical

arrangement of resources within a facility

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Machines or Equipmentsj


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Lathe: a machine for shaping wood, metal

Drill: a machine produce (a hole) in something

Grinder: a machine used for grinding something Punch Press

Why is layout planning important?

• Eliminates unnecessary space costs & materials handling

• Reduces work-in-process inventory (Completes Process)

• Produces goods and services faster

• Reduces distances that workers may travel in the

workplace

• Improves communication and morale

• Improves Overall quality of operations

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Types of Layouts

• Process layouts: Group similar resources together

• Product layouts: Designed to produce a specific product, or

a small number of products efficiently (Different Resources)

• Hybrid layouts: Combine aspects of both process and

product layouts (Example: cellular layout)

• Fixed-Position layouts: Product is too large to move

Examples: building construction, shipyard, Airpane

Resources must be brought to where they are needed

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Process and Product Layoutsj


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Process Layouts (Functional Layout)

• Based on the process requirement for the Product, the

resources (machines) are arranged in that sequence.

Product A

Product B

Product C

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L L

L L

M M

D D

G G

L: Lathes, M: Milling, G: Grinding, D: Drilling

Process Layouts (Functional Layout)

• In process layout, the single component is required to

move through the machines in the planned order.

• More the number of materials manufactured, there will

be a large number of criss-crossing on the shop floor.

• Material Handling increases, may affect production

control

• Each department has separate functional group i.e. there

will be Drilling in Department, Lathes in Lathe

Department, Grinders in Grinding Department.

• Examples Warehouse, Quality Control, Gym etc.

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Product Layout

• The order in which resources placed are as per the

visitation sequence as dictated by the product.

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L

L

MD G

M D G

L L D M Product C

Product B

Product A

Product Layout

• The resources arranged are as dedicated to each product

• Smooth component flow in each job shop

• Fixed path material handling ensures minimal handling of

materials

• Production control will be effective & simpler

• Quicker dispatch of finished product from final point

• Useful to both Manufacturing as well service sector

Examples: Bank, Restaurant,

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L MD G Product A

Choice of Layout

• When Volume of Production is High

(Mass Production) then Product Layout is

Feasible.

• When Volume of Production is Low

then Process Layout is Feasible

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Example of Product Layout (Bank)

Bank A- Private Sector Bank B- Public Sector

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Layout of Bank Sector

• Resources in bank are organized based on their

functions (Banking Operations)

• A bank will have, a Saving Account Clerk, Current

Account Clerk, a Cashier, a Bank Manager etc.

• Now a days the layout in Bank are either customer

focused or product focused.

• Layout is organized based on customer segments to be

catered.

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Layout of Bank A- Private Sector

• In Bank-A Customer enters in a waiting area first

• Customer Relationship Manager attends that customer

to understand his/her service requirement (May I Help U)

• The customer is directed based on product/service

requirement

• Private Sector banks follow Product Layout

• Advantages: Standardized process, Better control, faster

service

• Disadvantages: Duplication of resources may increase

cost, Less flexibility due to dedicated resources

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Layout of Bank B- Public Sector

• In Bank-B Customer enters in a Bank & depending upon

type of service required, customer will divert himself to

different sections.

• Public Sector banks follow Process Layout

• Advantages: Sharing of Specialized & Costlier Resources,

Flexibility is more,

• Disadvantages: Excess Material Handling, Poorer

Operational control, Unstandardized Processes, Slower

service

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Group Technology Layout (Cellular Manufacturing)

• Group Technology is useful for Mid-Volume & Mid-Variety

manufacturing

• A similar kind of product, that requires different process,

the resources are clubbed in a specific manufacturing cell

• Available resources are grouped in part families based on

manufacturing similarities.

• For the process, required machines are grouped & arranged

as layout for the process.

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L M D

D L G

M D L

G D L

L D

M L G

L D

L M

Cell-1 Cell-2

Cell-3 Cell-4


• Example:

1) Reliance Industries in Petrochemical industry wanted to

manufacture High Density Poly Ethylene (HDPE) &

Low Density Poly Ethylene (LDPE).

2) They can use one cell for one type of product

manufacturing

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Fixed Position Layout

This type of layout is useful when….

• The product manufactured in one or few in number

• Product is bulkier in size & weight

• Equipment required to manufacture are also large in size

Examples: Hindustan Aeronautics Ltd. to manufacture

Helicopter,

- ISRO for Satellite

- Aero planes or Ships manufacturing at Shipyards

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Service Blue Printing

• Services are intangible components of value creation for

customers

• Designing a service is called as Service Blue Printing

• Service Blue Printing examines complex interactions

between people and their service experiences.

• “Service blueprint is a picture or map that accurately

portrays the service system so that different people

involved in providing it can understand and deal with it

objectively regardless of their individual point of view.”

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• Service blueprints is used to deliver a better successful

customer experience.

• For products: Looking at a building we can read (give)

a description, but to build the building one needs more

than an image or description, we call it as “the

blueprint”

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• Service blueprints clarify the interactions between;

1) Service Users (Customers)

2) Digital Touch Points, and

3) Service Employees,

4) including the Front Stage activities that impact the

customer directly, and

5) The Back Stage activities that the customer does not see.

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ServiceMapping

Process

Points of Contact

Evidence

Usefulness Service Blueprints

• Service blueprints are useful when..

1) You want to improve your service offering

2) You have lost track of how the service gets produced

3) There are many players in the service industry, to

overcome the competition.

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Service Blue Printing Conceptj


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3 Essential Requirements of Blue Printing

• The line of interaction: This is the point at which customers

and the service providers interact.

• The line of visibility: Beyond this line, the customer can no

longer see into the service.

• The line of internal interaction: This is where the business

itself stops, and partners step in.

• In between these 3 lines, there are 5 main swim lanes…

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5 main swim lanes

• Physical Evidence: These are the props and places that

are encountered along the customer’s service journey.

• Customer Actions: These are the things the customer

has to do to access the service.

• Without the customer’s actions, there is no service at

all.

• Front stage: All of the activities, people, and physical

evidence that the customer can see while going

through the service journey.

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5 main swim lanes

• Backstage: This is all of the things required to produce

the service that the customer does not see.

• Support Processes: Documented below the line of

interaction, these are the actions that support the

service.

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Example of Hotel meant for Stayj


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Hotel

Exterior

Parking

Cart for

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Desk

Registration

Papers

Lobby

Key

Elevators

Hallways

Room

Cart for

Bags

Room

Amenities

Bath

Menu Delivery

Tray

Food

Appearance

Food

Bill

Desk

Lobby

Hotel

Exterior

Parking

Arrive

at

Hotel

Give Bags

to

Bell personCheck in

Go to

Room

Receive

Bags

Sleep

Shower

Call

Room

Service

Receive

FoodEat

Check out

&

Leave

Greet and

Take

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Process

Registration

Deliver

Bags

Deliver

Food

Process

Check Out

Take Bags

to Room

Take

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Order

Registration

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Food

Registration

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For Any Query……

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+919975770407

Email: [email protected]

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Operation Process

Education