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DISEÑO DE BIENES Y
    SERVICIOS
 ADMINISTRACION DE LA
     PRODUCCION



      Víctor Alvarez Celedón, ICI   1
Proceso general ...




     Víctor Alvarez Celedón, ICI   2
Matriz de diseño del producto


              El lado derecho de la matriz permite;
              • Definir las características del producto que contribuyen a
                 cumplir con las necesidades.
              • Asegurar que cada necesidad prioritaria sea satisfecha al
                 menos por una característica del producto.
              • Asegurar que cada característica contribuye a satisfacer por
                 lo menos a una necesidad importante de los clientes.



              • Las medidas de las características del producto se pueden
                derivar de una manera técnica de la medidas de las
                necesidades.
              • Ej. El cliente requiere que el asiento de un auto sea cómodo,
                esto se traduce en parámetros específicos de las
                dimensiones y estructura.




          Víctor Alvarez Celedón, ICI                                    3
Matriz de diseño del producto




          Víctor Alvarez Celedón, ICI   4
Proceso general ...




     Víctor Alvarez Celedón, ICI   5
Matriz de diseño del proceso




         Víctor Alvarez Celedón, ICI   6
Matriz de diseño del proceso
EJEMPLO: Matriz de diseño del
proceso de un servicio de
cuidado del césped.




                         Víctor Alvarez Celedón, ICI   7
Proceso general ...




     Víctor Alvarez Celedón, ICI   8
controles del proceso
• El control se centra en cosas especificas, se
  denominan <sujetos del control>. Estos son una
  mezcla de;
• Características del producto (ej. diámetro interior
  alojamiento). Los controles del producto están
  asociados con la decisión ¿está el producto
  conforme con las especificaciones o las
  metas?
• Características del proceso (ej. Temperatura del
  horno de fusión). Los procesos de control están
  asociados con la decisión ¿deberá el proceso
  seguir o parar?
                    Víctor Alvarez Celedón, ICI   9
controles del proceso
Matriz de control




                     Víctor Alvarez Celedón, ICI   10
QFD – INDUSTRIA SERVICIOS




         Víctor Alvarez Celedón, ICI   11
QFD – INDUSTRIA SERVICIOS




         Víctor Alvarez Celedón, ICI   12
ANALISIS DE PROCESOS

  ADMINISTRACION DE LA
      PRODUCCION



       Víctor Alvarez Celedón, ICI   13
Dell Computer Company
   “How can we make the process of
     buying a computer better?”
Sell custom-built PCs directly to consumer
Build computers rapidly, at low cost, and
only when ordered
Integrate the Web into every aspect of its
business
Focus research on software designed to
make installation and configuration of its
PCs fast and simple
              Víctor Alvarez Celedón, ICI    14
QUE ENTENDEMOS POR PROCESO

                                                                           EFFECTIVENESS
                                                                            OF PROCESS =
                                                                           Ability to achieve
                                                                             desired results



         Input           Interrelated or interacting                Output
Requirements Specified      activities and control          Requirements Satisfied
 (Includes resources)              methods                   (Result of a process)




                         Monitoring and Measuring                           EFFICIENCY OF
                                                                              PROCESS =
                                                                            Results achieved
                                                                           vs. resources used




   Procesos: Es cualquier parte de la organización que toma input y los
   transforma en output
                              Víctor Alvarez Celedón, ICI                                       15
ENFOQUE DE PROCESOS




      Víctor Alvarez Celedón, ICI   16
ENFOQUE DE SISTEMAS
                       Outputs from
                                                                   Outputs from
                       other processes
                                                                   other processes

Inputs                                                                                           Outputs
                                                              Outputs
to A                                                                                             from D
         PROCESS A             Inputs to B                   from B Inputs to D
                                                PROCESS B                            PROCESS D
                     Outputs
                     from A




                                                               Outputs
                                Inputs to C                    from C
                                                PROCESS C




                                         Víctor Alvarez Celedón, ICI                                   17
PROCESOS DE NEGOCIOS
•   IBM Corporation was among the first American companies to see the
    benefits of identifying and managing business processes.




                            Víctor Alvarez Celedón, ICI                 18
IDENTIFICACION DE PROCESOS




         Víctor Alvarez Celedón, ICI   19
DOCUMENTACION DE PROCESOS




        Víctor Alvarez Celedón, ICI   20
MAPEO DE PROCESOS




     Víctor Alvarez Celedón, ICI   21
MAPEO – IDEF0
The IDEFØ Function
Modeling method is
designed to model the
decisions, actions, and
activities of an
organization or system.
IDEFØ is not only the
most widely used, but
also the most field
proven function
modeling method for
analyzing and
communicating the
functional perspective of
a system. Effective
IDEFØ models assist in
organizing system
analysis and promoting
effective communication
between the analyst         Víctor Alvarez Celedón, ICI   22
and the customer.
MAPEO – IDEF0




   Víctor Alvarez Celedón, ICI   23
Process, Volume, and Variety
                                              Volume
                     Low                     Repetitive                 High
                    Volume                    Process                  Volume
High Variety
one or few             Process Focus                      Mass Customization
units per run,      projects, job shops                   (difficult to achieve,
high variety          (machine, print,                     but huge rewards)
(allows                  carpentry)                        Dell Computer Co.
customization)      Standard Register
Changes in
Modules
modest runs,
standardized                            Repetitive
modules                            (autos, motorcycles)
                                     Harley Davidson
Changes in
Attributes                                                     Product Focus
(such as grade,    Poor Strategy                                (commercial
quality, size,       (Both fixed                               baked goods,
thickness, etc.)    and variable                                steel, glass)
long runs only        costs are Alvarez Celedón, ICI
                             Víctor
                                                                Nucor Steel     24
                        high)
Few       High
                                  Low              Multiple   Major    Volume,
                                 Volume            Products, Products,   High
                                 One of a            Low      Higher Standard-
                                  Kind             Volume Volume        ization
                I.                 Commercial                                                           Flexibility (High)
               Job                   Printer                                                            Unit Cost (High)
              Shop              French Restaurant


              II.                                 Heavy
             Batch                              Equipment
                                                Coffee Shop
             III.
                                                                 Automobile
          Assembly
                                                                  Assembly
            Line                                                 Burger King
            IV.
                                                                                        Sugar
         Continuous                                                                    Refinery           Flexibility (Low)
           Flow                                                                                           Unit Cost (Low)

Source: Modified from Robert Hayes and Steven Wheelwright, Restoring Our Competitive Edge: Competing through Manufacturing (New
York: John Wiley & Sons, 1984). p. 209.                                                                                           13
Process Strategies

Four basic strategies
          Process focus
          Repetitive focus
          Product focus
          Mass customization
Within these basic strategies there are
many ways they may be implemented
              Víctor Alvarez Celedón, ICI   26
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
             Víctor Alvarez Celedón, ICI   27
Process Focus
  Print Shop




                                              High
 Many                                        variety
inputs                                         of
                                             outputs




               Víctor Alvarez Celedón, ICI         28
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 efficient
            Víctor Alvarez Celedón, ICI   29
Repetitive Focus
   Automobile Assembly Line



  Raw                                          Modules
materials                                     combined
   and                                        for many
module                                          output
 inputs                                        options


                     Few
                    modules
                Víctor Alvarez Celedón, ICI         30
Process Flow Diagram
  Frame tube           Frame-building         Frame                     Hot-paint
   bending               work cells          machining               frame painting
                                        THE ASSEMBLY LINE
        TESTING                                                                Engines and
                                           Incoming parts
         28 tests                                                             transmissions
                                                                                From Milwaukee
                                                                                on a JIT arrival
                                Air cleaners             Oil tank work cell     schedule

                            Fluids and mufflers          Shocks and forks

                             Fuel tank work cell               Handlebars

                              Wheel work cell             Fender work cell
      Roller testing
                                                                                 Crating




Figure 7.3                       Víctor Alvarez Celedón, ICI                               31
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
           Víctor Alvarez Celedón, ICI   32
Product Focus

   Bottling Plant


                                                Output
                                               variation
 Many                                           in size,
inputs                                          shape,
                                                  and
                                              packaging




                Víctor Alvarez Celedón, ICI           33
Product Focus
         D                                                                   A             Scrap
                                       Nucor Steel Plant                                   steel
Continuous caster




                                                                    B
                                                      C                                   Electric
                                                                  Ladle of molten steel   furnace

                                     Continuous cast steel
                                     sheared into 24-ton slabs
                                              Hot tunnel furnace - 300 ft
                                   E                                             F


                            Hot mill for finishing, cooling, and coiling


                        H                                               G
                    I

                                    Víctor Alvarez Celedón, ICI                               34
Comparison of Processes
   Process           Repetitive           Product Focus          Mass
    Focus              Focus              (High-volume,      Customization
(Low volume,         (Modular)             low-variety)      (High-volume,
 high variety)                                                high-variety)

Small quantity,    Long runs,             Large quantity,    Large quantity,
large variety of   standardized           small variety of   large variety of
products           product made           products           products
                   from modules

General            Special                Special            Rapid
purpose            equipment aids         purpose            changeover on
equipment          in use of              equipment          flexible
                   assembly line                             equipment


                          Víctor Alvarez Celedón, ICI                       35
Comparison of Processes
   Process          Repetitive            Product Focus        Mass
    Focus             Focus               (High-volume,    Customization
(Low volume,        (Modular)              low-variety)    (High-volume,
 high variety)                                              high-variety)

Operators are     Employees are           Operators are    Flexible
broadly skilled   modestly                less broadly     operators are
                  trained                 skilled          trained for the
                                                           necessary
                                                           customization

Many job          Repetition              Few work         Custom orders
instructions as   reduces                 orders and job   require many
each job          training and            instructions     job instructions
changes           changes in job          because jobs
                  instructions            standardized
                          Víctor Alvarez Celedón, ICI                        36
Comparison of Processes
   Process          Repetitive            Product Focus          Mass
    Focus             Focus               (High-volume,      Customization
(Low volume,        (Modular)              low-variety)      (High-volume,
 high variety)                                                high-variety)

Raw material      JIT                     Raw material       Raw material
inventories       procurement             inventories are    inventories are
high              techniques              low                low
                  used

Work-in-          JIT inventory           Work-in-           Work-in-
process is high   techniques              process            process
                  used                    inventory is low   inventory driven
                                                             down by JIT,
                                                             lean production

                          Víctor Alvarez Celedón, ICI             Table 7.2 37
Comparison of Processes
   Process         Repetitive           Product Focus             Mass
    Focus            Focus              (High-volume,         Customization
(Low volume,       (Modular)             low-variety)         (High-volume,
 high variety)                                                 high-variety)

Units move       Movement is            Swift                 Goods move
slowly through   measured in            movement of           swiftly through
the plant        hours and days         unit through the      the facility
                                        facility is typical

Finished goods   Finished goods         Finished goods        Finished goods
made to order    made to                made to               often made to
                 frequent               forecast and          order
                 forecast               stored


                        Víctor Alvarez Celedón, ICI                Table 7.2 38
Comparison of Processes
   Process         Repetitive           Product Focus       Mass
    Focus            Focus              (High-volume,   Customization
(Low volume,       (Modular)             low-variety)   (High-volume,
 high variety)                                           high-variety)

Scheduling is    Scheduling            Relatively       Sophisticated
complex,         based on              simple           scheduling
trade-offs       building              scheduling,      required to
between          various models        establishing     accommodate
inventory,       from modules          output rate to   custom orders
availability,    to forecasts          meet forecasts
customer
service



                        Víctor Alvarez Celedón, ICI         Table 7.2 39
Comparison of Processes
   Process           Repetitive             Product Focus          Mass
    Focus              Focus                (High-volume,      Customization
(Low volume,         (Modular)               low-variety)      (High-volume,
 high variety)                                                  high-variety)

Fixed costs       Fixed costs               Fixed costs        Fixed costs
low, variable     dependent on              high, variable     high, variable
costs high        flexibility of the        costs low          costs must be
                  facility                                     low

Costing           Costs usually             High fixed costs   High fixed costs
estimated         known due to              mean costs         and dynamic
before job, not   extensive                 dependent on       variable costs
known until       experience                utilization of     make costing a
after job is                                capacity           challenge
complete
                            Víctor Alvarez Celedón, ICI             Table 7.2 40
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


          Víctor Alvarez Celedón, ICI   41
Mass Customization
Table 7.1                           Number of Choices
                                               Early 21st
       Item                   Early 1970s       Century
Vehicle models                       140            260
Vehicle types                         18          1,212
Bicycle types                          8              19
Software titles                        0        300,000
Web sites                              0     46,412,165
Movie releases                       267            458
New book titles                   40,530         77,446
Houston TV channels                    5            185
Breakfast cereals                    160            340
Items (SKUs) in                   14,000        150,000
   supermarkets Víctor Alvarez Celedón, ICI                 42
Mass Customization
                        Repetitive Focus
                         Modular design
                       Flexible equipment

                                       Modular techniques


                      Mass Customization
    Effective                                                Rapid
   scheduling                                             throughput
   techniques                                             techniques


    Process-Focused                                  Product-Focused
 High variety, low volume                     Low variety, high volume
Low utilization (5% to 25%)                  High utilization (70% to 90%)
General-purpose equipment                       Specialized equipment
                       Víctor Alvarez Celedón, ICI                       43
Crossover Charts
                                                                                        Variable
                                                                                         costs
                  Variable                                      Variable
  $                costs             $                           costs        $
                                                   Fixed costs                         Fixed costs
           Fixed costs
      Low volume, high variety                        Repetitive                   High volume, low variety
            Process A                                 Process B                           Process C

                                                     st
                   $
                                        t



                                                   co
                                      os




                                                                  t
                                              t al             cos
                                    lc




                                            To          T otal
                                  ta
                               To




              400,000
              300,000
              200,000
                                                  Fixed cost          Fixed cost     Fixed cost
                                                  Process A           Process B      Process C
Figure 7.6          (2,857)   V1        V2 (6,666)
                                        Víctor Alvarez Celedón, ICI                                           44
                                                                                       Volume
Changing Processes

Difficult and expensive
May mean starting over
Process strategy determines
transformation strategy for an
extended period
Important to get it right


         Víctor Alvarez Celedón, ICI   45
Process Analysis and Design
 Flow Diagrams - Shows the movement
 of materials
 Time-Function Mapping - Shows flows
 and time frame
 Value Stream Mapping - Shows flows
 and time and value added beyond the
 immediate organization
 Process Charts - Uses symbols to show
 key activities
 Service Blueprinting - focuses on
 customer/provider interaction
               Víctor Alvarez Celedón, ICI   46
Time-Function Mapping
                Order                                                                 Receive
  Customer     product                                                                product

               Process
      Sales     order

 Production               Wait
    control


     Plant A                       Print


 Warehouse                                  Wait           Wait               Wait


     Plant B                                                        Extrude


  Transport                                        Move                                Move

               12 days   13 days   1 day     4 days 1 day 10 days    1 day    0 day    1 day
Figure 7.7                           Víctor Alvarez Celedón, ICI                          47
                                                     52 days
Process Chart




  Víctor Alvarez Celedón, ICI       48
                                Figure 7.8
Service Blueprint

Focuses on the customer and
provider interaction
Defines three levels of interaction
Each level has different
management issues
Identifies potential failure points


           Víctor Alvarez Celedón, ICI   49
Service Blueprint
        Personal Greeting       Service Diagnosis         Perform Service    Friendly Close
Level    Customer arrives
 #1        for service                                                         Customer departs


                                                                               Customer pays bill
                                          Determine             Notify
          Warm greeting                   specifics           customer
            and obtain         No                          and recommend
          service request                                   an alternative
                            Standard                          provider
                             request        Can
Level                                    service be
 #2                                    done and does       No
          Direct customer                customer
          to waiting room                approve?                                    Notify
                                                                                 customer the
                                                                                  car is ready


                               Yes             Yes
                                                               Perform
Level                                                       required work
 #3
                     Potential failure point
                                                           Prepare invoice

Figure 7.9                              Víctor Alvarez Celedón, ICI                              50
Process Analysis Tools
Flowcharts provide a view of the
big picture
Time-function mapping adds rigor
and a time element
Value stream analysis extends to
customers and suppliers
Process charts show detail
Service blueprint focuses on
customer interaction
          Víctor Alvarez Celedón, ICI   51
Service Process Matrix
                                                 Degree of Customization
                                        Low                                           High
                                     Mass Service                          Professional Service
                                                                      Private
                                                                      banking
                               Commercial
                                banking
                       High                                                         General-
                                                            Full-service        purpose law firms
     Degree of Labor




                                                            stockbroker
                                                  Boutiques
                                 Retailing

                                   Service Factory           Law clinics    Service       Shop
                                              Limited-service         Specialized
                                                stockbroker            hospitals
                               Warehouse and         Fast food              Fine-dining
                               catalog stores                               restaurants      Hospitals
                       Low                          restaurants
                                             Airlines

                                No frills
Figure 7.10                     airlines          Víctor Alvarez Celedón, ICI                            52
Service Process Matrix
Mass Service and Professional Service
   Labor involvement is high
   Selection and training highly important
   Focus on human resources
   Personalized services
Service Factory and Service Shop
    Automation of standardized services
    Low labor intensity responds well to
    process technology and scheduling
    Tight control required to maintain
    standards Víctor Alvarez Celedón, ICI    53

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Catedra 5 -_diseño_de_bienes_y_servicios

  • 1. DISEÑO DE BIENES Y SERVICIOS ADMINISTRACION DE LA PRODUCCION Víctor Alvarez Celedón, ICI 1
  • 2. Proceso general ... Víctor Alvarez Celedón, ICI 2
  • 3. Matriz de diseño del producto El lado derecho de la matriz permite; • Definir las características del producto que contribuyen a cumplir con las necesidades. • Asegurar que cada necesidad prioritaria sea satisfecha al menos por una característica del producto. • Asegurar que cada característica contribuye a satisfacer por lo menos a una necesidad importante de los clientes. • Las medidas de las características del producto se pueden derivar de una manera técnica de la medidas de las necesidades. • Ej. El cliente requiere que el asiento de un auto sea cómodo, esto se traduce en parámetros específicos de las dimensiones y estructura. Víctor Alvarez Celedón, ICI 3
  • 4. Matriz de diseño del producto Víctor Alvarez Celedón, ICI 4
  • 5. Proceso general ... Víctor Alvarez Celedón, ICI 5
  • 6. Matriz de diseño del proceso Víctor Alvarez Celedón, ICI 6
  • 7. Matriz de diseño del proceso EJEMPLO: Matriz de diseño del proceso de un servicio de cuidado del césped. Víctor Alvarez Celedón, ICI 7
  • 8. Proceso general ... Víctor Alvarez Celedón, ICI 8
  • 9. controles del proceso • El control se centra en cosas especificas, se denominan <sujetos del control>. Estos son una mezcla de; • Características del producto (ej. diámetro interior alojamiento). Los controles del producto están asociados con la decisión ¿está el producto conforme con las especificaciones o las metas? • Características del proceso (ej. Temperatura del horno de fusión). Los procesos de control están asociados con la decisión ¿deberá el proceso seguir o parar? Víctor Alvarez Celedón, ICI 9
  • 10. controles del proceso Matriz de control Víctor Alvarez Celedón, ICI 10
  • 11. QFD – INDUSTRIA SERVICIOS Víctor Alvarez Celedón, ICI 11
  • 12. QFD – INDUSTRIA SERVICIOS Víctor Alvarez Celedón, ICI 12
  • 13. ANALISIS DE PROCESOS ADMINISTRACION DE LA PRODUCCION Víctor Alvarez Celedón, ICI 13
  • 14. Dell Computer Company “How can we make the process of buying a computer better?” Sell custom-built PCs directly to consumer Build computers rapidly, at low cost, and only when ordered Integrate the Web into every aspect of its business Focus research on software designed to make installation and configuration of its PCs fast and simple Víctor Alvarez Celedón, ICI 14
  • 15. QUE ENTENDEMOS POR PROCESO EFFECTIVENESS OF PROCESS = Ability to achieve desired results Input Interrelated or interacting Output Requirements Specified activities and control Requirements Satisfied (Includes resources) methods (Result of a process) Monitoring and Measuring EFFICIENCY OF PROCESS = Results achieved vs. resources used Procesos: Es cualquier parte de la organización que toma input y los transforma en output Víctor Alvarez Celedón, ICI 15
  • 16. ENFOQUE DE PROCESOS Víctor Alvarez Celedón, ICI 16
  • 17. ENFOQUE DE SISTEMAS Outputs from Outputs from other processes other processes Inputs Outputs Outputs to A from D PROCESS A Inputs to B from B Inputs to D PROCESS B PROCESS D Outputs from A Outputs Inputs to C from C PROCESS C Víctor Alvarez Celedón, ICI 17
  • 18. PROCESOS DE NEGOCIOS • IBM Corporation was among the first American companies to see the benefits of identifying and managing business processes. Víctor Alvarez Celedón, ICI 18
  • 19. IDENTIFICACION DE PROCESOS Víctor Alvarez Celedón, ICI 19
  • 20. DOCUMENTACION DE PROCESOS Víctor Alvarez Celedón, ICI 20
  • 21. MAPEO DE PROCESOS Víctor Alvarez Celedón, ICI 21
  • 22. MAPEO – IDEF0 The IDEFØ Function Modeling method is designed to model the decisions, actions, and activities of an organization or system. IDEFØ is not only the most widely used, but also the most field proven function modeling method for analyzing and communicating the functional perspective of a system. Effective IDEFØ models assist in organizing system analysis and promoting effective communication between the analyst Víctor Alvarez Celedón, ICI 22 and the customer.
  • 23. MAPEO – IDEF0 Víctor Alvarez Celedón, ICI 23
  • 24. Process, Volume, and Variety Volume Low Repetitive High Volume Process Volume High Variety one or few Process Focus Mass Customization units per run, projects, job shops (difficult to achieve, high variety (machine, print, but huge rewards) (allows carpentry) Dell Computer Co. customization) Standard Register Changes in Modules modest runs, standardized Repetitive modules (autos, motorcycles) Harley Davidson Changes in Attributes Product Focus (such as grade, Poor Strategy (commercial quality, size, (Both fixed baked goods, thickness, etc.) and variable steel, glass) long runs only costs are Alvarez Celedón, ICI Víctor Nucor Steel 24 high)
  • 25. Few High Low Multiple Major Volume, Volume Products, Products, High One of a Low Higher Standard- Kind Volume Volume ization I. Commercial Flexibility (High) Job Printer Unit Cost (High) Shop French Restaurant II. Heavy Batch Equipment Coffee Shop III. Automobile Assembly Assembly Line Burger King IV. Sugar Continuous Refinery Flexibility (Low) Flow Unit Cost (Low) Source: Modified from Robert Hayes and Steven Wheelwright, Restoring Our Competitive Edge: Competing through Manufacturing (New York: John Wiley & Sons, 1984). p. 209. 13
  • 26. Process Strategies Four basic strategies Process focus Repetitive focus Product focus Mass customization Within these basic strategies there are many ways they may be implemented Víctor Alvarez Celedón, ICI 26
  • 27. 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 Víctor Alvarez Celedón, ICI 27
  • 28. Process Focus Print Shop High Many variety inputs of outputs Víctor Alvarez Celedón, ICI 28
  • 29. 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 efficient Víctor Alvarez Celedón, ICI 29
  • 30. Repetitive Focus Automobile Assembly Line Raw Modules materials combined and for many module output inputs options Few modules Víctor Alvarez Celedón, ICI 30
  • 31. Process Flow Diagram Frame tube Frame-building Frame Hot-paint bending work cells machining frame painting THE ASSEMBLY LINE TESTING Engines and Incoming parts 28 tests transmissions From Milwaukee on a JIT arrival Air cleaners Oil tank work cell schedule Fluids and mufflers Shocks and forks Fuel tank work cell Handlebars Wheel work cell Fender work cell Roller testing Crating Figure 7.3 Víctor Alvarez Celedón, ICI 31
  • 32. 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 Víctor Alvarez Celedón, ICI 32
  • 33. Product Focus Bottling Plant Output variation Many in size, inputs shape, and packaging Víctor Alvarez Celedón, ICI 33
  • 34. Product Focus D A Scrap Nucor Steel Plant steel Continuous caster B C Electric Ladle of molten steel furnace Continuous cast steel sheared into 24-ton slabs Hot tunnel furnace - 300 ft E F Hot mill for finishing, cooling, and coiling H G I Víctor Alvarez Celedón, ICI 34
  • 35. Comparison of Processes Process Repetitive Product Focus Mass Focus Focus (High-volume, Customization (Low volume, (Modular) low-variety) (High-volume, high variety) high-variety) Small quantity, Long runs, Large quantity, Large quantity, large variety of standardized small variety of large variety of products product made products products from modules General Special Special Rapid purpose equipment aids purpose changeover on equipment in use of equipment flexible assembly line equipment Víctor Alvarez Celedón, ICI 35
  • 36. Comparison of Processes Process Repetitive Product Focus Mass Focus Focus (High-volume, Customization (Low volume, (Modular) low-variety) (High-volume, high variety) high-variety) Operators are Employees are Operators are Flexible broadly skilled modestly less broadly operators are trained skilled trained for the necessary customization Many job Repetition Few work Custom orders instructions as reduces orders and job require many each job training and instructions job instructions changes changes in job because jobs instructions standardized Víctor Alvarez Celedón, ICI 36
  • 37. Comparison of Processes Process Repetitive Product Focus Mass Focus Focus (High-volume, Customization (Low volume, (Modular) low-variety) (High-volume, high variety) high-variety) Raw material JIT Raw material Raw material inventories procurement inventories are inventories are high techniques low low used Work-in- JIT inventory Work-in- Work-in- process is high techniques process process used inventory is low inventory driven down by JIT, lean production Víctor Alvarez Celedón, ICI Table 7.2 37
  • 38. Comparison of Processes Process Repetitive Product Focus Mass Focus Focus (High-volume, Customization (Low volume, (Modular) low-variety) (High-volume, high variety) high-variety) Units move Movement is Swift Goods move slowly through measured in movement of swiftly through the plant hours and days unit through the the facility facility is typical Finished goods Finished goods Finished goods Finished goods made to order made to made to often made to frequent forecast and order forecast stored Víctor Alvarez Celedón, ICI Table 7.2 38
  • 39. Comparison of Processes Process Repetitive Product Focus Mass Focus Focus (High-volume, Customization (Low volume, (Modular) low-variety) (High-volume, high variety) high-variety) Scheduling is Scheduling Relatively Sophisticated complex, based on simple scheduling trade-offs building scheduling, required to between various models establishing accommodate inventory, from modules output rate to custom orders availability, to forecasts meet forecasts customer service Víctor Alvarez Celedón, ICI Table 7.2 39
  • 40. Comparison of Processes Process Repetitive Product Focus Mass Focus Focus (High-volume, Customization (Low volume, (Modular) low-variety) (High-volume, high variety) high-variety) Fixed costs Fixed costs Fixed costs Fixed costs low, variable dependent on high, variable high, variable costs high flexibility of the costs low costs must be facility low Costing Costs usually High fixed costs High fixed costs estimated known due to mean costs and dynamic before job, not extensive dependent on variable costs known until experience utilization of make costing a after job is capacity challenge complete Víctor Alvarez Celedón, ICI Table 7.2 40
  • 41. 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 Víctor Alvarez Celedón, ICI 41
  • 42. Mass Customization Table 7.1 Number of Choices Early 21st Item Early 1970s Century Vehicle models 140 260 Vehicle types 18 1,212 Bicycle types 8 19 Software titles 0 300,000 Web sites 0 46,412,165 Movie releases 267 458 New book titles 40,530 77,446 Houston TV channels 5 185 Breakfast cereals 160 340 Items (SKUs) in 14,000 150,000 supermarkets Víctor Alvarez Celedón, ICI 42
  • 43. Mass Customization Repetitive Focus Modular design Flexible equipment Modular techniques Mass Customization Effective Rapid scheduling throughput techniques techniques Process-Focused Product-Focused High variety, low volume Low variety, high volume Low utilization (5% to 25%) High utilization (70% to 90%) General-purpose equipment Specialized equipment Víctor Alvarez Celedón, ICI 43
  • 44. Crossover Charts Variable costs Variable Variable $ costs $ costs $ Fixed costs Fixed costs Fixed costs Low volume, high variety Repetitive High volume, low variety Process A Process B Process C st $ t co os t t al cos lc To T otal ta To 400,000 300,000 200,000 Fixed cost Fixed cost Fixed cost Process A Process B Process C Figure 7.6 (2,857) V1 V2 (6,666) Víctor Alvarez Celedón, ICI 44 Volume
  • 45. Changing Processes Difficult and expensive May mean starting over Process strategy determines transformation strategy for an extended period Important to get it right Víctor Alvarez Celedón, ICI 45
  • 46. Process Analysis and Design Flow Diagrams - Shows the movement of materials Time-Function Mapping - Shows flows and time frame Value Stream Mapping - Shows flows and time and value added beyond the immediate organization Process Charts - Uses symbols to show key activities Service Blueprinting - focuses on customer/provider interaction Víctor Alvarez Celedón, ICI 46
  • 47. Time-Function Mapping Order Receive Customer product product Process Sales order Production Wait control Plant A Print Warehouse Wait Wait Wait Plant B Extrude Transport Move Move 12 days 13 days 1 day 4 days 1 day 10 days 1 day 0 day 1 day Figure 7.7 Víctor Alvarez Celedón, ICI 47 52 days
  • 48. Process Chart Víctor Alvarez Celedón, ICI 48 Figure 7.8
  • 49. Service Blueprint Focuses on the customer and provider interaction Defines three levels of interaction Each level has different management issues Identifies potential failure points Víctor Alvarez Celedón, ICI 49
  • 50. Service Blueprint Personal Greeting Service Diagnosis Perform Service Friendly Close Level Customer arrives #1 for service Customer departs Customer pays bill Determine Notify Warm greeting specifics customer and obtain No and recommend service request an alternative Standard provider request Can Level service be #2 done and does No Direct customer customer to waiting room approve? Notify customer the car is ready Yes Yes Perform Level required work #3 Potential failure point Prepare invoice Figure 7.9 Víctor Alvarez Celedón, ICI 50
  • 51. Process Analysis Tools Flowcharts provide a view of the big picture Time-function mapping adds rigor and a time element Value stream analysis extends to customers and suppliers Process charts show detail Service blueprint focuses on customer interaction Víctor Alvarez Celedón, ICI 51
  • 52. Service Process Matrix Degree of Customization Low High Mass Service Professional Service Private banking Commercial banking High General- Full-service purpose law firms Degree of Labor stockbroker Boutiques Retailing Service Factory Law clinics Service Shop Limited-service Specialized stockbroker hospitals Warehouse and Fast food Fine-dining catalog stores restaurants Hospitals Low restaurants Airlines No frills Figure 7.10 airlines Víctor Alvarez Celedón, ICI 52
  • 53. Service Process Matrix Mass Service and Professional Service Labor involvement is high Selection and training highly important Focus on human resources Personalized services Service Factory and Service Shop Automation of standardized services Low labor intensity responds well to process technology and scheduling Tight control required to maintain standards Víctor Alvarez Celedón, ICI 53