Process Selection and Capacity Planning InPROCESS
Process Selection and Capacity Planning InPROCESS
Process Selection and Capacity Planning InPROCESS
The design of products and services and the design of the processes are clearly
interrelated. It is not wise to focus on detailed design of any product or service
without some consideration of how it is to be produced (process). Small changes in
the design of products can have significant implications for the process through
which they are produced. This interrelation in product and process design is greater
in servicing businesses than in production businesses because many services
involve the customer in being part of the transformation process, the service, as far
as the customer sees it, cannot be separated from the process to which the customer
is subjected..
Process Selection refers to the way an organization chooses to produce its good or services.
It takes into account selection of technology, capacity planning, layout of facilities,
and design of work systems. The relationship among these are demonstrated in the
following figure.
. . . . InPut . . . . . . . . OutPut . . . .
Facilities &
Forecasting Equipment
Capacity
Planning
Product
Service Design
Layout
Process
Technological Selection
Change Work Design
Process selection is a naturally the next step after deciding about the design of new
products and services. An organizations process strategy would include the
following;
1. Make or Buy Decisions. The extent to which an organization will produce goods
or provide services in-house instead of buying them from an outside organization.
2. Capital Intensity. The mix of equipment and labor that will be used by the
organization.
3. Process Flexibility: The degree to which the system can be adjusted to changes in
processing requirements due to such factors as changes in product or service
design, changes in volume processed, and changes in technology
There are 6 reasons which are available to us in order to decide whether to develop
a competence in-house or hire an outside competent organization
ii. Expertise: If a firm lacks the expertise to do a job satisfactorily, buying might be a
reasonable alternative.
iii. Quality considerations: Firms that offer only specialized products and services
can usually offer higher quality than an organization that offer General
Products/Services. Therefore, sometimes it is preferred to buy certain products
from a specialized manufacturer rather than making them in-house.
iv. Nature of Demand: When demand for an item is high and steady, the
organization is often better off doing the work itself. However, wide fluctuations in
demand or small orders are usually better handled by specialists, who are able to
combine orders from multiple sources, which results in higher volume and tend to
offset individual buyer fluctuation.
v. Cost: Any cost savings achieved from buying or making must be weighed
against the preceding factors. Cost savings might come from the item itself or from
transportation cost savings. If there are fixed costs associated with making an item
that cannot be reallocated if the item is purchased, that has to be recognized in cost
analysis.
vi. Risk. Outsourcing or buying the services carries risk; often companies retain
flexibility by carrying out certain critical activities in house and repetitive menial
activities through out sourcing.
TYPES OF PROCESSES:
The degree of standardization and the volume of output of a product or service
influence the way production is organized. Output can range from high volume,
highly standardized, …. to low volume, highly customized. Accordingly, different
types of processes can be arranged as follows.
1. Continuous Processing:
2. Semi-continuous /Repetitive Processing:
3. Intermittent Processing: (Batch Processing, Job Shop)
4. Automation:
1. Continuous Processes:
Continuous processing is employed when a highly uniform product or service is
produced. Products/Services that result from continuous processing are identical. It
is often performed by machines and its examples include, air-conditioning, heating,
CCTV monitoring systems, electricity, water treatment and filtration.
Operations for such processes run round the clock. Products are measured on
continuous bases instead of counting the number of products or service. (Such
industries are sometimes called process industries)
Ready-made shirts of standardized sizes such as Small, Medium, Large and Extra
Large are examples of this kind of processes. Other examples include computers,
automobile etc.
Methods and procedures of above two types are highly standardized. It also
enables the organizations to work with lesser skilled labor.
This type of processes are not continuous, rather production is made at irregular
intervals. Semi-skilled workers are required and production volumes are much
lower than it is in continuous processes. Following are different forms of
Intermittent Processing.
ii). Job Shop: A job shop contains a greater flexibility of job requirements as
compared to batch processing. It refers to A system that renders unit or small lot
production or service with variety of specifications according to customer needs.
Highly skilled labor is required in this kind of processes and production or delivery
of service occurs in very small volumes or on a single unit.
The table below provides a summary of the characteristics of all four types of
operations and their processes.
Disadvantages Very Rigid, Less Low Flexibility, Moderate per unit Slow, High per
Variety, Costly to High cost of cost, Moderate unit cost,
Change, downtime Scheduling Planning and
Downtime Cost is Complexity scheduling is
very high complicated
Project: A project is used for work that is non-routine, with a unique set of
objectives to be accomplished in a limited time frame. Equipment flexibility and
worker skills can range from low to high. Examples range from simple to
complicated, such as; launching a new product or service, publishing a book,
building a dam, and building a bridge.
The processes discussed do not always exist in their “pure” forms. It is usual to find
hybrid processes, i.e. processes that have elements of other process types embedded
in them
Another thing that is important to consider is the life cycle stages of each product.
In the first stages, products are produced in small quantities. As it passes through
next stages, sale and number of items produced increases. Therefore, managers
must know when to use a particular processes. A product may start production
through a job shop system, but when it is required to produce in large numbers,
managers may shift to Batch production. Later on, it can go on to Mass production
through continuous processing.
4. AUTOMATION:
Refers to that kind of a process, in which such a machinery is used that has sensors
and controlling devices that enables it to operate automatically.
Simply using machinery to perform the jobs is not automation. Rather, it refers to
Artificial Intelligent Machinery (that has sensors and controlling devices).
If a company decides to automate, the next question is how much. Automation can
range from factories that are completely automated to a single automated
operation.
Generally speaking, there are three kinds of automation: fixed, programmable, and
flexible.
i. Fixed Automation:
A kind of automation that uses high-cost specialized equipment for a fixed sequence of
operations. Low cost and high volume are its primary advantages; minimal
flexibility and the high cost of making major changes are its primary limitations.
Numerically controlled (N/C) machines are the machines that perform operations by
following mathematical processing instructions.
CIM might be as simple as linking two or more FMSs by a host computer. The
overall goal of using CIM is to link various parts of an organization to achieve rapid
response to customer orders and/or product changes
OBJECTIVES OF PROCESS DESIGN
(Quality, Speed, Dependability, Flexibility, Cost)
Quality:
You would want to do things right; that is, you would not want to make mistakes,
and would want to satisfy your customers by providing error-free goods and
services which are ‘fit for their purpose’. This is giving a quality advantage.
Speed:
You would want to do things fast, minimizing the time between a customer asking
for goods or services and the customer receiving them in full, thus increasing the
availability of your goods and services and giving a speed advantage.
Dependability:
You would want to do things on time, so as to keep the delivery promises you have
made. If the operation can do this, it is giving a dependability advantage.
Flexibility:
You would want to be able to change what you do; that is, being able to vary or
adapt the operation’s activities to cope with unexpected circumstances or to give
customers individual treatment. Being able to change far enough and fast enough to
meet customer requirements gives a flexibility advantage.
Cost:
You would want to do things cheaply; that is, produce goods and services at a cost
which enables them to be priced appropriately for the market while still allowing
for a return to the organization; or, in a not-for-profit organization, give good value
to the taxpayers or whoever is funding the operation. When the organization is
managing to do this, it is giving a cost advantage.
PROCESS MAPPING
Process mapping simply involves describing processes in terms of how the
activities within the process relate to each other. There are many techniques which
can be used for process mapping (or process blueprinting, or process analysis, as it
is sometimes called). However, all the techniques identify the different types of
activity that take place during the process and show the flow of materials or people
or information through the process.
However, one of these outlets is different; it is a kiosk that makes more expensive
‘customized’ sandwiches to order. Customers can specify the type of bread they
want and a very wide combination of different fillings. Because queues for this
customized service are becoming excessive, the catering manager is considering
redesigning the process to speed it up. The process will be changed as in the
following diagram.
SOME KEY TERMS
Cycle Time: Rate at which units Emerge from System.
Throughput Time: Time for an input to become an output
Work in Process (WIP): Number of Units in Process
The Utilization: Proportion of time, a resource is performing work
Idle Time: Proportion of time, a resource is Idle, Not performing
Little’s Law:
It is simple but very useful, and it works for any stable process. For example,
suppose it is decided that, when the new process is introduced, the average number
of customers in the process should be limited to around ten and the maximum time
a customer is in the process should be on average four minutes. If the time to
assemble and sell a sandwich (from customer request to the customer leaving the
process) in the new process has reduced to 1.2 minutes, how many staff should be
serving?
Putting this into Little’s law
Given that an individual can be served in 1.2 minutes,
In other words, three servers would serve three customers in 1.2 minutes. Or one
customer in 0.4 minute.
Throughput Efficiency:
This idea that the throughput time of a process is different from the work content of
whatever it is processing has important implications. What it means is that for
significant amounts of time no useful work is being done to the materials,
information or customers that are progressing through the process. In the case of
the simple example of the sandwich process described earlier, customer throughput
time is restricted to 4 minutes, but the work content of the task (serving the
customer) is only 1.2 minutes. So, the item being processed (the customer) is only
being ‘worked on’ for 1.2/4 = 30 per cent of its time. This is called the throughput
efficiency of the process.
In this case the throughput efficiency is very high, relative to most processes,
perhaps because the ‘items’ being processed are customers who react badly to
waiting. In most material and information transforming processes, throughput
efficiency is far lower, usually in single percentage figures.