Fernando Sueno IA 214 Powerpoint Presentation
- 1. College of Education Graduate Program Master of Education Major in Technology and Livelihood Education-Industrial Arts IA 214- GRAPHIC ARTS FERNANDO A. SUEÑO JR. Discussant DR. WARREN S. CELOSO Professor
- 4. DIFFERENCES IN KEY ORGANIZATIONAL DECISIONS FOR DIFFERENT TYPES OF OPERATIONS Decision Intermittent Operation Repetitive Operations Product design Early stage of product life cycle Later stage of product life cycle Competitive Priorities Delivery, flexibility, and quality Cost and quality Facility lay-out Resources group by function Resources arranged in a line Product strategy Make-to-order/Assemble-to- order Make-to-stock Vertical Integration Low High
- 6. Product Design Decision Intermitt ent Operatio ns • still being refined • products are still uncertain • designed to focus on producing lower volumes of products with differing characteristics.
- 7. Product Design Decision Repetitiv e Operatio ns • later stages of the life cycle • both its product features and its demand volume are predictable. • dedicated to producing a large volume of one type of product • efficiency and cost perspectives • capital intensive
- 9. Competitive Priorities Intermitt ent Operatio ns • typically less competitive on cost than repetitive operations. • compete more on flexibility and delivery compared to continuous operations. • offer greater variety of features and workmanship not available with mass production.
- 10. Competitive Priorities Repetitiv e Operatio ns • repetitive operations mass produce a large volume of one product. • provide greater consistency between products. • The first and last products made in the day are almost identical.
- 12. Facility Lay-out Intermitt ent Operatio ns • grouped based on similar processes or functions. • less efficient • have longer production times due to the nature of the layout. • Material handling costs tend to be high • resource scheduling is a challenge.
- 14. Facility Lay-out Repetitiv e Operatio ns • resources arranged in sequence • faster processing rates • lower material handlingcosts • greater efficiency than intermittent operations • Resources are highly specialized
- 15. Facility Lay-out Repetitiv e Operatio ns Inbound Materials Work Station 1 Work Station 2 Work Station 3 Finish Product
- 17. Product and Service Strategy Intermitt ent Operatio ns • Assemble-to-order strategy • produces standard components that can be combined to customer specifications. • Delivery time is longer than in the make-to-stock strategy, but allows for some customization.
- 18. Product and Service Strategy Intermitt ent Operatio ns • Make-to-order • The delivery time is longest and product volumes are low.
- 19. Product and Service Strategy Repetitiv e Operatio ns • Make-to-stock • produces finished products for immediate sale or delivery, in anticipation of demand. • produce a standardized product in larger volumes. • Delivery lead time is the shortest
- 22. Degree of Vertical Integration Intermitt ent Operatio ns • poor strategic choice • typically not a good strategic decision to vertically integrate into specialized processes that provide inputs in small volumes.
- 23. Degree of Vertical Integration Repetitiv e Operatio ns • good strategic option when there are high volumes of a small variety of input materials
- 25. Technology Decisions Advancements in technology have had the greatest impact on process design decisions. Technological advances have enabled companies to produce products faster, with better quality, at a lower cost. Many processes that were not imaginable only a few years ago have been made possible through the use of technology.
- 26. Greatest impacts technology has had on process design. • Information technology • Enterprise resource planning (ERP) • Global positioning systems (GPS) • Radio frequency identification (RFID)
- 27. Automation An important decision in designing processes is deciding whether the firm should automate, to what degree, and the type of automation that should be used. Automation uses machinery that is able to perform work without human operators and can be a single machine or an entire factory. Although there are tremendous advantages to automation, there are also disadvantages. Companies need to consider these carefully before making the final decision.
- 28. Advantage of Automation • produce large volumes of product. • last part made in the day will be exactly like the first one made. • brings consistency, quality tends to be higher and easier to monitor. • production can flow uninterrupted throughout the day
- 29. Disadvantag e of Automation • typically very costly • typically not flexible in accommodating product and process changes.
- 30. Examples of automated machines: • Automated Material Handling • Flexible manufacturing system (FMS) • Robotics
- 31. e-Manufacturing Today’s Web-based environment has created numerous opportunities for business collaboration. This includes collaboration in product and process design, where customers, buyers, and designers can share information and jointly make decisions in real time.
- 32. Some of the computer systems that can aid e- manufacturing. • Computer-aided design (CAD) • Computer-integrated manufacturing (CIM)
- 33. Designing Services There are issues unique to services that pose special challenges for service design. Most of us think we know what is needed to run a good service organization. After all, we encounter services almost every day, at banks, fast-food restaurants, doctor’s offices, barber shops, grocery stores, and even the university. We have all experienced poor service quality and would gladly offer advice as to how we think it could be run better. However, there are some very important features of services you may have not thought about.
- 35. Intangible Product Service organizations produce an intangible product, which cannot be touched or seen. It cannot be stored in inventory for later use or traded in for another model. The service produced is experienced by the customer.
- 36. Intangible Product: • Cannot be physically touched or seen. • Examples: financial advice, legal services, online courses. • Challenges: Difficulty in evaluating quality before purchase, reliance on trust and reputation.
- 37. High Degree of Customer Contact Service organizations typically have a high degree of customer contact. The customer is often present while the service is being delivered, such as at a theater, restaurant, or bank. Also, the contact between the customer and service provider is often the service itself, such as what you experience at a doctor’s office. For a service to be successful this contact needs to be a positive experience for the customer, and this depends greatly on the service provider
- 38. High customer contact: • Requires significant direct interaction between the customer and service provider. • Examples: Hair salon, personal training session, restaurant dining experience • Importance: Customer experience is heavily influenced by the quality of interaction with the service provider.
- 40. Classification of service operations • quasi manufacturing • pure services • mixed services
- 41. Services with low customer contact are called “quasi manufacturing.” These firms have a high degree of service standardization, have higher sales volumes, and are typically less labor intensive. These firms have almost no face-to-face contact with customers and are in many ways similar to manufacturing operations.
- 42. Services with high customer contact are called “pure services.” These firms have high face-to-face contact and are highly labor intensive. There is low product standardization as each customer has unique requirements, and sales volumes tend to be low. Pure service firms have an environment of lowest system efficiency compared to other service firms. The reason is that the service is typically customized. As each customer has unique requirements, there is less predictability in managing the operating environment. Examples include hospitals, restaurants, barber shops, and beauty salons.
- 43. Services that combine elements of both of these extremes are called “mixed services.” Some parts of their operation have face-to-face customer contact, though others do not. They include offices, banks, and insurance firms.
- 45. The Service Package A grouping of physical, sensual, and psychological benefits that are purchased together as part of the service. There are three elements of the service package: the physical goods, the sensual benefits, and the psychological benefits.
- 47. Differing Service Designs There is no one model of successful service design. The design selected should support the company’s service concept and provide the features of the service package that the target customers want. Different service designs have proved successful in different environments.
- 48. Differing Service Designs 1. Substitute Technology for People(Theodore Levitt) 2. Get the Customer Involved(C. H. Lovelock and R. F. Young) 3. High Customer Attention Approach
Editor's Notes
- #3: Decisions of product design and process selection are directly linked and cannot be made independently of one another. The type of product a company produces defines the type of operation needed. The type of operation needed, in turn, defines many other aspects of the organization. This includes how a company competes in the marketplace (competitive priorities), the type or equipment and its arrangement in the facility, the type of organizational structure, and future types of products that can be produced by the facility.
- #7: The Babcock & Wilcox Company - B & W was very successful at producing fossil fuel boilers, a standardized product made via repetitive operation. The company decided to pursue production of nuclear pressure vessels, a new product in the early stages of its life cycle that required an intermittent operation. B & W saw the nuclear pressure vessels as a wave of the future. Because they were successful at producing boilers, they believed they could apply those same skills to production of the new product. They began managing the production of nuclear pressure vessels—an intermittent operation—as if it were a repetitive operation. They focused primarily on cost rather than delivery, did not give enough time for product refinement, and did not invest in labor skills necessary for a new product. Consequently, the venture failed and the company almost went out of business. It was saved by its success in the production of boilers to which it was able to return Segway - Designed to be a revolutionary means of transportation, the Segway was a personal motorized scooter invented and brought to the market in 2001. Even though the product was revolutionary, they failed to see the difference between practicality and blue sky thinking. City infrastructure and safety were not addressed before going to market, so many critics asked why anyone would invest in something that expensive that you were not allowed to use? Tie Rack - This British tie retailer, founded in 1981, failed to do its research on men's shopping behavior. Their stores only sold scarves, ties, and cufflinks, but men mainly bought ties when they bought shirts. Even though Tie Rack offered quality ties, it wasn't enough to wow its target. Blackberry Motion - BlackBerry, a line of smartphones and tablets, was successful in 1998. They changed the game in the mobile industry by offering a device with an arched keyboard. A few years later, the mobile industry started focusing on more extensive touchscreen displays, while BlackBerry was more concerned about protecting what it already had. Failing to adapt to changes, in 2017, CEO John Chen announced that BlackBerry was officially out of the smartphone manufacturing business.
- #9: The decision of how a company will compete in the marketplace—its competitive priorities—is largely affected by the type of operation it has in place. Intermittent operations are typically less competitive on cost than repetitive operations. The reason is that repetitive operations mass produce a large volume of one product. The cost of the product is spread over a large volume, allowing the company to offer that product at a comparatively lower price. Intermittent operations have their own advantages. Having a custom-made suit allows you to choose precisely what you want in style, color, texture, and fit. Also, if you were not satisfied you could easily return it for adjustments and alterations. Intermittent operations compete more on flexibility and delivery compared to continuous operations.
- #10: Today all organizations understand the importance of quality. However, the elements of quality that a company focuses on may be different depending on the type of operation used. Repetitive operations provide greater consistency between products. The first and last products made in the day are almost identical. Intermittent operations, on the other hand, offer greater variety of features and workmanship not available with mass production.
- #12: Facility layout, is concerned with the arrangement of resources of a facility to enhance the production process. If resources are not arranged properly, a company will have inefficiency and waste. The type of process a company uses directly affects the facility layout of the organization and the inherent problems encountered. Resources of intermittent operations are grouped based on similar processes or functions. Products are then moved from resource to resource, based on their processing needs. The challenge with intermittent operations is to arrange the location of resources to maximize efficiency and minimize waste of movement. If the intermittent operation has not been designed properly, many products will be moved long distances. Intermittent operations are less efficient and have longer production times due to the nature of the layout. Material handling costs tend to be high and resource scheduling is a challenge. Intermittent operations are common in practice.
- #14: Repetitive operations have resources arranged in sequence to allow for efficient production of a standardized product. Since only one product or a few highly similar products are being produced, all resources are arranged to efficiently meet production needs. Though repetitive operations have faster processing rates, lower material handlingcosts, and greater efficiency than intermittent operations, they also have their shortcomings. Resources are highly specialized and the operation is inflexible relative to the market. This type of operation cannot respond rapidly to changes in market needs for the products wanted or to changes in demand volume. The challenge is to arrange workstations in sequence and designate the jobs that will be performed by each to produce the product in the most efficient way possible.
- #16: The type of operation a company has in place is directly related to its product and service strategy. product and service strategies can be classified as make-to-stock, assemble-to-order, and make-to-order. These strategies differ by the length of their delivery lead time, which is the amount of time from when the order is received to when the product is delivered. These strategies also differ by the degree of product customization.
- #17: Assemble-to-order strategy, also known as build-to-order, produces standard components that can be combined to customer specifications. Delivery time is longer than in the make-to-stock strategy, but allows for some customization. Examples include computer systems, pre-fabricated furniture with choices of fabric colors, or vacation packages with standard options.
- #18: Make-to-order is a strategy used to produce products to customer specifications after an order has been received. The delivery time is longest and product volumes are low. Examples are custom-made clothing, custom-built homes, and customized professional services. Ordering a hamburger to your liking in a sit-down restaurant is another example of this strategy. This strategy is best for an intermittent operation.
- #19: Make-to-stock is a strategy that produces finished products for immediate sale or delivery, in anticipation of demand. Companies using this strategy produce a standardized product in larger volumes. Typically this strategy is seen in repetitive operations. Delivery lead time is the shortest, but the customer has no involvement in product design. Examples include off-the-shelf retail apparel, soft drinks, standard automotive parts, or airline flights. A hamburger patty at a fast-food restaurant such as McDonald’s, Burger King, or Wendy’s is made-to-stock as is a taco at Taco Bell. As a customer you gain speed of delivery, but lose the ability to customize the product.
- #22: It is typically not a good strategic decision to vertically integrate into specialized processes that provide inputs in small volumes. This would be the case for intermittent operations. For example, let’s consider a bakery that makes a variety of different types of cakes and pies. Maybe the bakery purchases different fillings from different sources, such as apple pie filling from one company, chocolate filling from another, and cream filling from a third. If the company were to purchase production of the apple filling, it would not gain much strategically because it still relies on other suppliers. In this case outsourcing may be a better choice. However, if the bakery shifted its production to only making apple pies, then the vertical integration might be a good choice.
- #23: The larger the number of processes performed by a company in the chain from raw materials to product delivery, the higher the vertical integration. Vertical integration is a strategic decision that should support the future growth direction of the company. Vertical integration is a good strategic option when there are high volumes of a small variety of input materials, as is the case with repetitive operations. The reason is that the high volume and narrow variety of input material allows task specialization and cost justification. An example is Dole Food Company, which owns and controls most of its canned pineapple production from pineapple farms to the processing plant. The company has chosen to be vertically integrated so as to have greater control of costs and product quality. In summary, vertical integration is typically a better strategic decision for repetitive operations. For intermittent operations it is generally a poor strategic choice.
- #26: Information technology - Technology that enables storage, processing, and communication of information within and between firms. Enterprise resource planning (ERP) - Large software programs used for planning and coordinating all resources throughout the entire enterprise. Global positioning systems (GPS) - A type of wireless technology that uses satellite transmission to communicate exact locations. GPS has even found its use in advertising. For example, Nielsen Media Research, the firm known for rating television viewers, is using GPS to test billboard advertising. The company has recruited a sample of adults with known demographic characteristics, and is using GPS to monitor their minute-by-minute movements. This information will then be used to determine the best placement for particular billboard advertisements targeted to the particular demographic group. Radio frequency identification (RFID) - A wireless technology that uses memory chips equipped with radio antennas attached to objects used to transmit streams of data.
- #30: Automated Material Handling – a handheld scanner reading a barcode. Flexible manufacturing system (FMS) - A type of automated system that provides the flexibility of intermittent operations with the efficiency of continuous operations. Robotics - a robot in manufacturing is usually nothing more than a mechanical arm with a power supply and a computer-control mechanism that controls the movements of the arm. The arm can be used for many tasks, such as painting, welding, assembly, loading, and unloading of machines. Robots are excellent for physically dangerous jobs such as working with radioactive or toxic materials. Also, robots can work 24 hours a day to produce a highly consistent product. Numerically controlled (NC) machine A machine controlled by a computer that can perform a variety of tasks
- #32: Computer-aided design (CAD) - A system that uses computer graphics to design new products Computer-integrated manufacturing (CIM) - A term used to describe the integration of product design, process planning, and manufacturing using an integrated computer system.
- #45: The physical goods of the service are the tangible aspects of the service that we receive, or are in contact with, during service delivery. The sensual benefits are the sights, smell, and sounds of the experience all the items we experience through our senses. The psychological benefits include the status, comfort, and well-being of the experience. It is highly important that the design of the service specifically identify every aspect of the service package. When designing the service we should not focus only on the tangible aspects; it is often the sensual and psychological benefits that are the deciding factors in the success of the service. The service package needs to be designed to precisely meet the expectations of the target customer group
- #48: Substitute Technology for People - Substituting technology for people is an approach to service design that was advocated some years ago by Theodore Levitt. Levitt argued that one way to reduce the uncertainty of service delivery is to use technology to develop a production-line approach to services. One of the most successful companies to use this approach is McDonald’s. Technology has been substituted wherever possible to provide product consistency and take the guesswork away from employees. Get the Customer Involved - A different approach to service design was proposed by C. H. Lovelock and R. F. Young. Their idea was to take advantage of the customer’s presence during the delivery of the service and have him or her become an active participant. This is different from traditional service designs where the customer passively waits for service employees to deliver the service. Lovelock and Young proposed that since the customers are already there, “get them involved.” High Customer Attention Approach - A third approach to service design is providing a high level of customer attention. The third approach is different from the first two in that it does not standardize the service and does not get the customer involved. Rather, it is based on customizing the service needs unique to each customer and having the customer be the passive and pampered recipient of the service. This approach relies on developing a personal relationship with each customer and giving the customer precisely what he or she wants