The document discusses various topics related to process choice and layout decisions in manufacturing and services. It covers engineering and business perspectives on manufacturing processes, classic manufacturing process types including continuous flow, production line, batch, job shop and project approaches. It also discusses choosing between process types, the role of customization, and considerations for services. Key factors discussed include volume, variety, skills requirements, flexibility advantages, product-process matrices, and life cycle planning frameworks.

1. Process Choice and Layout
Decisions in Manufacturing
and Services

2. Manufacturing Processes
• Engineering and business
perspectives
• Classic manufacturing processes
• Choosing between classic types
• The role of customization
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 2
Management — Bozarth & Handfield

3. Engineering and Business
Perspectives
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 10, Slide 3
Management — Bozarth & Handfield

4. Solid Wood Seat for a
Kitchen Chair:
Process A Process B
• Saddle Machine • 5-Axis Router
• Shaper Machine • ----
• Sander A • Sander A
• Sander B • Sander B
• Inspection • Inspection
Setup Time: 6 hours Setup Time: 10 min.
Time/Seat 1.1 min. Time / Seat: 3.5 min.
Yield Rate: 92% Yield Rate: 99%
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 4
Management — Bozarth & Handfield

5. Classic Engineering
Viewpoint
 Four Transformation Processes
Conversion  Fabrication  Assembly
Testing
“Advances in Engineering increase and
improve the alternatives available”
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 5
Management — Bozarth & Handfield

6. Example: Making
Windows
Conversion Fabrication Assembly
• Raw lumber • Frame wood Assembled
• Molten glass • Window panes Windows
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 6
Management — Bozarth & Handfield

7. Business View
• What conversion steps must be done?
• What are the production volumes like?
• How similar are the various products we
make (can we standardize)?
• If the product is customized, how late in
the process does it occur?
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 7
Management — Bozarth & Handfield

8. Classic Manufacturing
Processes
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 10, Slide 8
Management — Bozarth & Handfield

9. Process Types
(in order of decreasing volume)
• Continuous Flow
• Production Line
• Batch (High Volume)
• Batch (Low Volume)
• Job Shop
• Project
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 9
Management — Bozarth & Handfield

10. Continuous Flow
• Large production volumes
• High level of automation
• Basic material passed along,
converted as it moves
• Usually very high fixed costs,
inflexible
Oil refinery, fiber formation, public
utilities, automotive manufacturing
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 10
Management — Bozarth & Handfield

11. Production Line
High-volume production of standard
products or “design window”
• Processes arranged by product flow
• Often “paced”
• Highly efficient, but not too flexible
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 11
Management — Bozarth & Handfield

12. Batch I
• Somewhere in between job shop
and line processes
• Moderate volumes, multiple
products
• Production occurs in “batches”
Can manufacturing, carton makers,
advertising mailers, etc.
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 12
Management — Bozarth & Handfield

13. Batch II
Layout is a cross between that found in a
line and that found in a job shop:
Group Technology
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 13
Management — Bozarth & Handfield

14. Some Examples of Batch
Manufacturing
• Numerical control (NC) machines
– Automated processing of entire batch
– Machining center - multiple NC machines
• Flexible manufacturing systems (FMS)
– Dedicated to families of parts
– NC and automated handling
• Group technology
– Similar in concept to FMS, but not as much
automation
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 14
Management — Bozarth & Handfield

15. Job Shop
• Low volume, one-of-a-kind products
• Job shops sell their capability
• Highly flexible equipment, skilled workers
• Equipment arranged by function
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 15
Management — Bozarth & Handfield

16. Project
• Used when a product is:
– one-of-a-kind
– too large to be moved
• Resources moved to where needed
• Equipment, people, etc. are highly
flexible
• Finite duration, often with deadline
Building projects, equipment installation
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 16
Management — Bozarth & Handfield

17. Mixing Together the Process
Types ...
Spindles ASSEMBLY
LINE for
putting together
Arms and final product
Legs
BATCH for
fabricating Seats
parts ...
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 17
Management — Bozarth & Handfield

18. Choosing Between
Classic Types
• The product-process matrix
• Product and process life cycles
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 10, Slide 18
Management — Bozarth & Handfield

19. Comparing Process Types...
Job Shop Batch Line
Volume Very Low High
Variety Very High Low
Skills Broad Limited
Advantage Flexibility Price and
Delivery
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 19
Management — Bozarth & Handfield

20. Product – Process Matrix
One of a Kind Multiple Few Major Commodity
Low Volume Products Products Products
Moderate High Volume
Volumes
Job Shop Very Poor Fit
Batch
Very Poor Fit
Line
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 20
Management — Bozarth & Handfield

21. Life-Cycle Planning Framework
Introduction Growth Maturity
Decline Stage
Stage Stage Stage
Total
Market
Sales
Time
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 21
Management — Bozarth & Handfield

22. Introduction Stage
Availability key to market success
but:
• No reliable movement history
• Unreliable forecasts
• Small shipments
• Erratic orders
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 22
Management — Bozarth & Handfield

23. Life-Cycle Planning Framework
Introduction Growth Maturity
Decline Stage
Stage Stage Stage
•High
product
availability
Total
•Flexibility Market
to handle Sales
variation
Time
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 23
Management — Bozarth & Handfield

24. Growth Stage
• Sales somewhat more predictable
• Higher volumes
• Performance emphasis?...
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 24
Management — Bozarth & Handfield

25. Life-Cycle Planning Framework
Introduction Growth Maturity
Decline Stage
Stage Stage Stage
•Availability
•Achieve break-
even volumes
as soon as
Total
possible Market
Sales
Less need
for flexibility
Time
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 25
Management — Bozarth & Handfield

26. Maturity Stage
• Intense competition around more
standardized products
• Frequent price and service
adjustments
• Implications . . .
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 26
Management — Bozarth & Handfield

27. Life-Cycle Planning Framework
Introduction Growth Maturity
Decline Stage
Stage Stage Stage
More selective, Total
targeted efforts Market
Sales
Value-added
service
Time
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 27
Management — Bozarth & Handfield

28. Decline Stage
(Obsolescence)
• Product close-out or restricted
distribution
• Lowest cost / differentiated
performance not as critical
anymore
• Priorities?
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 28
Management — Bozarth & Handfield

29. Life-Cycle Planning Framework
Introduction Growth Maturity
Decline Stage
Stage Stage Stage
• Centralized
inventory
• Speed
Total
Market
Sales
Time
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 29
Management — Bozarth & Handfield

30. Implications
• What happens as companies
follow products through their life
cycles?
• What happens when companies
support products at various
stages of the life cycle?
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 30
Management — Bozarth & Handfield

31. The Role of Customization
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 10, Slide 31
Management — Bozarth & Handfield

32. What is ―Customization‖?
An operations-centric view:
“Customization occurs when a
customer‟s unique requirements
directly affect the timing and nature of
operations and supply chain activities”
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 32
Management — Bozarth & Handfield

33. Make-to-Order Windows
Off-line Activities On-Line Activities
• Design • Lead times?
• Buy Materials • Customizability?
• Fabricate parts • Price?
• Assemble • What type of
manufacturing?
• Ship windows • Sell windows
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 33
Management — Bozarth & Handfield

34. Fully Customized Windows
Off-line Activities On-Line Activities
• Lead times? • Sell Windows
• Customizability? • Design
• Price? • Buy Materials
• What type of • Fabricate parts
manufacturing? • Assemble
• Ship windows
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 34
Management — Bozarth & Handfield

35. Customization Point Model I
ETO MTO ATO MTS
SOURCING ASSEMBLY/
DESIGN FABRICATION DISTRIBUTION
MATERIALS FINISHING
Definitions:
ETO – engineer to order
MTO – make to order
ATO – assemble-to-order
MTS – make to stock
Upstream: before the customization point, “off-line” activities
Downstream: after the customization point, “on-line” activities
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 35
Management — Bozarth & Handfield

36. Customization Point Model II
Manufacturing Upstream Downstream
Systems Design
Performance objectives Efficiency Responsiveness
Technology Investment Productivity, consistency Flexibility
Organization structure Mechanistic Organic
Job differentiation High Low
Integration Formal Informal
Discretion Low High
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 36
Management — Bozarth & Handfield

37. Difficulty versus
Customization
MANUFACTURING VIEW
LOWER DIFFICULTY HIGHER DIFFICULTY
BASEBALL CAP WITH
BASEBALL CAP WITH ARKANSAS RAZORBACKS
HIGHER CUSTOMIZATION SCHOOL NAME ON IT LOGO AND SCHOOL
(MTO) COLORS ON IT
(ETO)
MARKETING VIEW
PLAIN BASEBALL CAP IN
PLAIN BASEBALL CAP
LOWER CUSTOMIZATION (MTS)
DIFFERENT COLORS
(ATO)
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 37
Management — Bozarth & Handfield

38. An Operations-Centric View
Customization becomes relevant to operations
and supply chain managers when a
customer‟s unique requirements directly
affect the timing and nature of operations
and supply chain activities
Job Difficulty
Operations and
Customization Supply Chain Design
Job Routineness
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 38
Management — Bozarth & Handfield

39. “Mass customization” at
Japan‟s National Bicycle Co.
TUBE CUTTING
CAM
Marketing FRONT ASSEMBLY
ORDER DATA
INCLUDING CAM
CUSTOMER’S CAD
MEASUREMENTS
REAR ASSEMBLY
AND OPTIONS
CAM
2-WEEK LEAD TIME 3-D MEASUREMENT
Quality Assurance
ASSEMBLY PAINTING COMPUTER
INSTRUCTIONS
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 39
Management — Bozarth & Handfield

40. Services
• What makes them distinctive?
• High-contact versus low-contact
• Front room versus back room
• A Model of Service Design
• Service Blueprinting
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 40
Management — Bozarth & Handfield

41. Services . . .
• Process and “product” are inseparable
• Marketing and sales often tightly integrated
• Customer often part of the process
• Performance metrics can be harder to
define
• Nevertheless:
– Focus and process choices / trade-offs
still apply
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 41
Management — Bozarth & Handfield

42. Degree of Customer Contact
Low Contact High Contact
• “off-line” • “on-line”
• Can locate for • Can locate for
efficiency easy access
• Can smooth out • Flexibility to
the workload respond to
Check clearing, mail customers
sorting • Harder to manage
Hospitals, food
service
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 42
Management — Bozarth & Handfield

43. Classifying Services
“Front Room” versus “Back Room”
Front room – what the Back room – what the
customer can see customer does not see
Managed for flexibility Managed for efficiency and
and customer service Productivity
Customer lobbies, Package sorting, car
bank teller, repair, blood test analysis,
receptionist accounting department
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 43
Management — Bozarth & Handfield

44. What is it?
What is the performance objective?
• Restaurant kitchen
• Software help desk
• Kinko‟s copy center
• Airline reservations
• Jet maintenance
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 44
Management — Bozarth & Handfield

45. Designing Services
• Selecting a service focus
– Like manufacturing processes, different
services have strengths and weaknesses
• Key is to design a service process that
meets the needs of targeted customers
• The “service package”
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 45
Management — Bozarth & Handfield

46. A Cubical Model of Services
(Three Dimensions)
Nature of the Service Primarily Physical Primarily Intangible
Package Activities Activities
(Airline, trucking firm) (Law firm, software
developer)
Degree of Customization Lower Customization Higher Customization
(Quick-change oil shop) (Full-service car repair
shop)
Degree of Customer Lower Contact Higher Contact
Contact (Mail sorting) (Physical therapist)
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 46
Management — Bozarth & Handfield

47. Community Hospital
PHYSICAL Public Hospital
SERVICE
PACKAGE
HIGH
CONTACT
INTANGIBLE LOW
LOW HIGH
CUSTOMIZATION
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 47
Management — Bozarth & Handfield

48. Birthing Center
PHYSICAL Public Hospital
SERVICE
PACKAGE
HIGH
CONTACT
INTANGIBLE LOW
LOW HIGH
CUSTOMIZATION
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 48
Management — Bozarth & Handfield

49. Layout Decision Models
• Product-based layout
– Usually best for a line operation
– Cycle time a primary measure
• Functional layout
– Usually best for a job shop
– Distance between steps a measure
• Cellular layout
– Usually best for batch processes
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 49
Management — Bozarth & Handfield

50. Product-Based Layout
Line Balancing
• Improve „Takt‟ time:
– Reduce idle time
– Reduce setup time
– Reduce unnecessary movement
– Identify „bottlenecks‟
available production time
Takt time
required output rate
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 50
Management — Bozarth & Handfield

51. Functional Layout
A. Minimize the total distance
traveled
B. Minimize information flow for
decisions
C. Use electronic data interchange
(EDI) to allow more flexibility for
accomplishing A and B
©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Chapter 7, Slide 51
Management — Bozarth & Handfield