Koç University
OPSM 301 Operations Management
Class 3:
Process selection
Zeynep Aksin
zaksin@ku.edu.tr
Process Selection Video
Back to Shouldice wrap-up
from last class
Classification of Processes
by process architecture
 Project
 Job Shop
Job Shop
Process-focused
 Batch
 Line flow
 Continuous Flow
Flow Shop
Product-focused
Matching Process Choice with Strategy:
Product-Process Matrix
Process
Flexibility
High
JOB SHOP
Jumbled Flow.
Process segments
loosely linked.
(Commercial Printer,
Architecture firm)
BATCH
Disconnected Line
Flow/Jumbled Flow
but a dominant flow
exists.
(Heavy Equipment,
Auto Repari)
LINE FLOWS
Connected Line
Flow (assembly line)
Continuous, automated,
rigid line flow.
Process segments tightly
linked.
Low
(Auto Assembly,
Car lubrication shop)
CONTINUOUS
FLOW
(Oil Refinery)
Low
High Standardization
Commodity Products
High volume
High
Few Major Products
Many Products
Low Standardization
One of a kind
Low Volume
Product
Variety
Organization of Production Processes
 Project: the product remains in a fixed location
– Manufacturing equipment is moved to the product
 Job shop (Workcenter): similar equipment or functions are
grouped together
 Assembly line: work processes are arranged according to the
progressive steps by which the product is made
 Continuous process: assembly line, only the flow is continuous
such as with liquids
Project Layout
One of a kind products are produced
The Job Shop Process
 Process Layout
 One of a Kind Build
– (To Customer Order)
 Absence of Rigid Flow Pattern
 Usually High Product Mix
The Job shop
similar equipment or functions are grouped together
• High variety, low volume production
Routing matrix based upon flow of parts
Process Layout
Lathe#1
Drill
Press #1
Drill
Press #2
Lathe#2
Paint Machine
Lathe#3
Packaging Machine #1
Lathe#4
Packaging Machine #2
Product #1735B: Start of Production
Finish
Production
Job-Shop Process Examples
(Also called process focused)
Bank
Hospital
© 1995 Corel Corp.
© 1995
Corel
Corp.
Machine
Shop
© 1995 Corel Corp.
11
Process Focused Strategy Pros & Cons
 Advantages
– Greater product flexibility
– More general purpose equipment
– Lower initial capital investment
 Disadvantages
– High variable costs
– More highly trained personnel
– More difficult production planning & control
– Low equipment utilization (5% to 25%)
The Flow Line Process




Product Layout
Discrete Parts
Rigid Flow Pattern
Product Mix of Standard Products
Product Layout
Product #1735B
Start Production
Lathe
Drill
Press #2
Drill
Press #1
Paint Machine
Packaging Machine #2
Finish
Production
Product-Focused Strategy
Pros & Cons
 Advantages
– Lower variable cost per unit
– Lower but more specialized labor skills
– Easier production planning and control
– Higher equipment utilization (70% to 90%)
 Disadvantages
– Lower product flexibility
– More specialized equipment
– Usually higher capital investment
Positioning Inventory in the Supply
Chain
Raw Material Components
Semifinished Finished
Assemble-to-Order
Make-to-Order
Engineer-to-Order
Forecast
Order
CLIENT
SUPPLIER
Make-to-Stock
Production Processes Terms
 Lead time: the time needed to respond to
a customer order
 Customer order decoupling point:
where inventory is positioned to allow
entities in the supply chain to operate
independently
Types of Firms
 Make-to-stock firms: Firms that serve customers from
finished goods inventory
 Assemble-to-order firms: firms that combine a number of
preassembled modules to meet a customer’s specifications
 Make-to-order firms: that make the customer’s product
from raw materials, parts, and components
 Engineer-to-order firm: firm that will work with the
customer to design and then make the product
Make to Stock
 Examples of products
– Televisions
– Clothing
– Packaged food products
 Essential issue in satisfying customers is to balance
the level of inventory against the level of customer
service
– Easy with unlimited inventory but inventory costs money
– Trade-off between the costs of inventory and level of
customer service must be made
Assemble-to-Order
 A primary task is to define a customer’s order in terms
of alternative components since these are carried in
inventory
– An example is the way Dell Computer makes their desktop
computers
 One capability required is a design that enables as
much flexibility as possible in combining components
 There are significant advantages from moving the
customer order decoupling point from finished goods
to components
Make-to-Order and Engineer-to-Order
 Boeing’s process for making commercial
aircraft is an example
 Customer order decoupling point could be
in either raw materials at the
manufacturing site or the supplier
inventory
 Depending on how similar the products
are it might not even be possible to preorder parts
Assignment 1 from Universal Pulp and
Paper case-individual assignment
 Read the Universal Pulp and Paper (UPP) case
from the course pack (available at the photocopy
center)
 What are the main products of UPP?
 Identify the four product attributes for each
product type. Explain each attribute with facts
from the case
 Which process type is appropriate for each
product type? Support your argument with facts
from the case and process attributes you need
for each product type.