MAN3506 Process Selection Strategy


Operations Management

Midterm Exam Notes


Process Selection Strategy

Capital Intensity: the mix of equipment & labor that will be used by organizations.

Banking, Airline very capital intensity

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 of volume processed, and changes in technology.

Process Selection

Process selection- refers to deciding on the way production of goods or services will be organized. DEMAND DRIVEN

3 primary questions:

How much variety in products or services will the system need to handle?

What degree of equipment flexibility will be needed

What is the expected volume of output?

Process Types:

Job Shop-

Operates on a relatively small scale

Used when a low volume of high variety goods or services will be needed

Processing is intermittent; work includes small jobs, each with somewhat different processing requirements

High Flexibility using general-purpose equipment and Skilled workers

A manufacturing job shop would be a tool and die shop that is able to produce one-of-a-kind tools.

A service job shop would be a veteran’s office, which is able to process a variety of animals and a variety of injuries and diseases. Or a hospital performing a cardiac cath.


Moderate volume of goods or services is desired and can handle a moderate variety in products or services.

Process still intermittent; but equipment need not be as flexible as a job shop.

Skill level is not as high as job shop bc there is less variety in the jobs.

Bakeries which make bread, cookies, or cakes in batches, Movie theater which shows movies to a group/batch of people, or Airlines which planeloads of people.

Paint, icecream, soft drinks, beer, books, plays concerts, radio..


Higher volume of more standardized goods or services

Standardized output only slight flexibility of equipment

Skill of workers is low

Mass customization is an option

Production lines and assembly lines, or service system: automatic carwash

Motorcycles on an assembly line with parts added in a sequential order.


High volume of nondiscrete highly standardized output

Almost no variety in output hense no need for equipment flexibility.

Worker skill range for low-high

An oil refinery performs a continuous process, mixing and separating crude oil into gas, fuel oil chemicals, and many other products. Protrelum products, sugar, flour, FL power, the internet


Ex. Putting on a play, consulting, making a motion picture, launching a new product or service, publishing a book.

Equipment flexibility and skill level ranges from high to low

Remember: Projects are nonrepetitive set of activities directed towards a unique goal within a limited time frame.

Process Types impact on Supply chain

Repetitive & Continuous both need inputs of high volume goods or services. Delivery reliability in terms of quality and timing is essential

Job shop & Batch demand varying order quantities and timing

Product and Service Profiling

Product or service profiling- Linking key product/service requirements to process capabilities. can be used to avoid an inconsistencies by identifying key product or service dimensions and then selecting appropriate processes. Key dimensions often relate to the range of products/services that will e processed, expected order sizes, pricing strategies, expected frequency of schedule changes, and order winning requirements.

Sustainable Production of Goods and services

Sustainable production is the creating of goods/ services using processes and systems that are: non-polluting, conserving of energy and natural resources; and social and creatively rewarding for all working people. Lowell center advocates designing and operating processes in ways that:

“wastes and ecologically incompatible byproducts are reduced, eliminated, or recycled on site

Chemical substances or physical agents and conditions that present hazards to human health or the environment are eliminated

Energy and materials are conserved and the forms of energy and materials used are most appropriate for the desired ends

Work spaces are designed to minimize or eliminate chemical, ergonomic and physical hazard.

Lean Process Design

Waste production that relates to sustainability objectives. Lean design also focuses on variance reduction in workload over the entire process to achieve level production and thereby improve process flow.

Results in: reduced inventory & floor space, quicker response times, shorter lead time, reduced defects, rework, and scrap, and increased productivity


Technological innovation- the discovery and development of new or improved products services, or processes for producing or providing them

Technology- The application of scientific discoveries to the development and improvement of products and services and operations processes

Very Low Variety: Make only 1 Item, Highly Standardized Product

High Variety-Customized Product

Repetitive- Assembly line

Technology in Production Processes

Automation (robots, CNC machines.. computer/customized numerical control). Automation is the machinery that has sensing and control device that enable it to operate automatically. (ATMS) email online banking, package sorting

Frequently a strategy for competitiveness although it is expensive

3 kinds of automation:

Fixed automation

Is the least flexible, uses high-cost, specialized equipment, & fixed sequence of operations.

Advantages: low cost/high volume

Limitations: minimal variety and high cost of making major changes

Programmable automation

Involves high-cost general purpose equipment controlled by a computer program. capability of economically producing a fairly wide variety of low volume products in small batches.

Computer aided manufacturing- CAM the use of computers in process control ranging from robots to automated quality control (computer based process control, automation in production and testing

Numerically controlled N/C machines- machines that perform operations by following mathematical processing instructions. Used where parts are processed frequently and small batches where geometry is complex. Limitations are the higher skill levels that are needed to program the machines and their inability to detect tool wear and material viariation

Flexible automation

Flexible automation- Evolved from programmable automation. Requires significantly less change over time. Permits continuous operation of equip and product variety w/o the need to produce in batched. Has several Different formats:

Flexible manufacturing system- a group of machines to handle intermittent processing requirements and produce a variety of similar products. (automation + CAM + automatic material handling… producing variety of similar products with intermittent processing.

Computer integrated manufacturing – a system for linking a broad range of manufacturing activities through an integrating computer system ( 2 or more FMS linked, design through production to planning and control


Flexibility: flexibility systems and equipment is expensive and not as effective as standardized processing equipment. Unnecessary because products are in mature stages with few design changes and steady volume of output.

Reasons for Flexibility:

Demand variety

Demand uncertainty- however this can be overcame through improved forecasting


Layout- refers to the configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system.

Layout Decision Importance:

They require substantial investments of money and effort

They involve long term commitments, which makes mistakes difficult to overcome

They have a significant impact on the cost of efficiency of operations

Impacts the behavior (in the space)

Objective of Layout Design

Facilitate smooth flow of work, materials, people, and information through the system

Facilitate product and service quality

Use workers and space efficiency

Avoid bottlenecks

Minimize material handling costs

Eliminate unnecessary movements of workers and materials

Minimize production or service time

Design for Safety

Repetitive Processing: Product Layouts

Product Layout- Layout that uses standardized processing operations to achieve smooth, ,,,,,,,rapid, high-volume flow

Production Line- Standardized layout arranged according to a fixed sequence of production tasks.

Assembly line- Standardized layout arranged according to a fixed sequence of assembly tasks.

Advantages- high output rate, low unit cost, high utilization, low material handling cost, labor specification, fairly routine

Disadvantages- division of labor resulting in repetitive work inflexible system, susceptible to breakdowns, preventative maintenance necessary, incentive plans cause imbalance.

Nonrepetitive Processing Process Layouts

Product layouts-layouts than can handle varied processing requirements, discontinuous work flow, intermittent or non repetitive processing

Departments or functional groupings in which similar activities are performed.

General purpose equipment provides flexibility for varied processing

Material handling needed to move between departments

Advantages: handle variety of process requirements not particularly vulnerable to equipment failure, less costly general purpose equipment can use individual incentive system without disturbing overall system

Disadvantages- in process inventory many be high, routing and scheduling challenges, equipment utilization rates are low, material handling slow and inefficient, job complexity increases supervision cosy, lower volume increases per unit costs, support (inventory, purchasing etc) more involved.

Types of Layouts:

Product or Project remains stationary and workers, materials & equipment are moved as needed

Fixed position layouts:

Product or project remains stationary and workers materials and equipment are moved as needed.

Cellular Production – layout in which workstations are grouped into a cell that can process items that have similar processing requirements

Single minute exchange of die

Right sized equipment

Group technology

Service Layouts:

Warehouse and storage layouts

Retail layouts see pg 528 on supermarket layout

Office layout

Others: special layouts like hospital universities, etc

Designing Product Layout

Line balancing: workstations have approx.. qual time requirements

Cycle time: max time allowed at each workstation to complete its set of tasks on a unit (product)

Cycle time establishes the output rate of a line—cycle time determines capacity

Min cycle time=longest task time

Max cycle time=sum of all tasks times in a line

Management Quality



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