8.1
Chapter 8
Process technology
Corbis
8.1
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.2
Layout and flow
Operations
strategy
Supply network design
Design
Layout
and flow
Process
technology
Improvement
Planning and
control
People, jobs
and
organization
Product/service
design
8.2
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.3
Key operations questions
In Chapter 8 – Process technology – Slack et al. identify the
following key questions:
• What is process technology?
• How does one gain an understanding of process
technologies?
• How are process technologies evaluated?
• How are process technologies implemented?
8.3
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.4
Pilotless technology for aircraft
• What are the operations-related advantages and
disadvantages of pilotless technology?
• What are the market-related advantages and
disadvantages of pilotless technology?
• How would you overcome the disadvantages of
pilotless technology?
8.4
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.5
Material, information or customer process technologies
Manual
machine tools
Mail
processing
system
Automated
scheduling
system
Information processing
technology
8.5
Electronic
point of sale
systems
Global positioning
system
Material processing
technology
Baggage
handling
systems
Milking
machines (cows
are customers
too!)
Customer processing
technology
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.6
Robots are used in this example because of the hazardous
environment in which the tasks take place
What other examples can you think of where the safety of operators is the
major motivation for investment in robot technology?
8.6
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.7
Examples of materials-processing technology
• CNC machine tool
• Industrial robot
• Automatic guided vehicle (AGV).
• Flexible manufacturing system (FMS)
• Computer integrated manufacturing (CIM)
8.7
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.8
Technology helps recovery from Hurricane Katrina
How did IBM’s use of
communications technology
improve the recovery
operation after Hurricane
Katrina?
8.8
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.9
Technology and processing costs
100%
100%
80%
Cost per banking transaction
60%
50%
40%
25%
20%
12%
Branch
8.9
Telephone
Cash
machine
Internet
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.10
Radio Frequency Identification (RFID)
Smart Tag, microchip
with antenna that
transmits ePC code
Network translates ePC code
into useful information that can
be used for monitoring and
process control
Internet or
other network
Control system
Reader senses item
and transmits ePC
code to network
F132.C225.DF2B12CV
ePC Code, a unique
number 96 bits long
Operations process
8.10
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.11
Some applications of e-business to operations
Organizational
E-business applications and/or
tasks
contributions
Customer feedback, research on customer
Design
Purchasing
Supplier
development
Human
resource
management
Production
Marketing/
sales and
customer
service
Warehousing
8.11
requirements, product design, quality
function deployment, data mining and
warehousing
Ordering, fund transfer, supplier selection
Partnership, supplier development
E-recruiting, benefit selection and
management, training and education using
WWW
Production planning and control, scheduling,
inventory management, quality control
Product promotion, new sales channels,
direct savings, reduced cycle time, customer
services, Internet sales, selection of
distribution channels, transportation,
scheduling, third-party logistics
Inventory management, forecasting,
scheduling of work force
E-business tools and systems
WWW-integrated CAD, Hyperlinks, 3D
navigation, Internet for data and information
exchange
EDI, Internet-purchasing, EFT
WWW-assisted supplier selection,
communication using Internet (e-mails),
research on suppliers and products with WWW
and intelligent agents
E-mails, interactive web sites, WWW-based
multimedia applications
B2B e-business, MRP, ERP, SAP, BAAN,
Peoplesoft, IBM e-business (web-integrated)
B2B e-business, Internet ordering, Website for
the company Electronic funds transfer, On-line
TPS, Bar-coding system, ERP, WWW
integrated inventory management, Internet
delivery of products and services
EDI, EFT, WWW-integrated inventory
management
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.12
Types of customer processing technology
Type of interaction between the
Examples
customer and the technology
Active interaction with the
technology
Passive interaction with the
technology
Hidden interaction with the
technology
Interaction with the technology
through an intermediary
8.12
Mobile phone services
Internet-based ordering
E-mail
Cash machines
Transport systems
Theme park rides
Automatic car wash
Security cameras
Retail scanners
Credit card tracking
Call centre technology
Travel shop’s booking system
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.13
Using RFID in healthcare
This shows the use
of RFID technology
in a hospital to refer
patient’s records.
How might it affect
the hospital’s
process
performance?
8.13
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.14
Customer-processing technology – Active interaction
with technology
Technology
Customer
Examples
Personal communications
Internet-based ordering
Cash machines
8.14
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.15
Customer-processing technology – Passive interaction
with technology
Technology
Customer
Examples
Transport systems
Theme park rides
Car wash
8.15
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.16
Customer-processing technology – Hidden interaction
with technology
Technology
Customer
Examples
Security cameras
Retail scanners
Credit card tracking
8.16
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.17
Customer-processing technology – Use of technology
through an intermediary
Technology
Customer
Intermediary
Examples
Call centre technology
Travel agent booking system
Hotel reservation system
8.17
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.18
Customer-processing technologies
Customers
Back office
Back-office
technology
8.18
Front office
Front-office
technology with
links to the
Back office
Front-office
technology
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.19
Cows are also customers
• What advantages do you think the technology described above gives?
• Do you think the cows mind?
• Why do you think the farmer still goes to watch the process?
8.19
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.20
QB House speeds up the cut
‘Why not create a no-frills
barber’s shop where the
customer could get a haircut in
ten minutes at a cost of 1,000
Yen?’
• How does QB House compete
compared with conventional
hairdressers?
• In what way does technology help
QB House to keep its costs down?
8.20
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.21
Categorizing process technologies
Process technologies can be categorized
using three dimensions:
the extent to which they vary in their degree of automation;
the extent to which they vary in their scale;
the extent to which they vary in their degree of integration.
8.21
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.22
Different process technologies are appropriate for different
volume–variety combinations
Automation
Low
High
8.22
Scale/
scalability
Coupling/
connectivity
Low
Broad/
unconstrained
High
Narrow/
constrained
High
Variety
Low
Low
Volume
High
Manual, generalpurpose, smallscale, flexible
technology
Automated,
dedicated, largescale, relatively
inflexible
technology
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
8.23
Learning potential depends on both technological resource
and process ‘distance’
Potential for
learning is limited –
too many things
change
Process distance
Process
pioneer
Process
development
Process
extension
Process
modification
Potential for
learning is
relatively high
Resource distance
Technological Technological Technological Technological
pioneer
development
extension
modification
8.23
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
Reduced performance during with implementation of new
processes reflects ‘adjustments costs’
Operations performance (Quality
levels)
8.24
Start of
implementation
Planned
performance
New technology planned
to be on-stream
Forecast
performance
Actual
performance
Planned
implementation period
Time
8.24
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010