COMMERCE 2OC3 Lecture Notes - Lecture 7: Frito-Lay, Westjet, Flowchart

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CHAPTER 7: PROCESS STRATEGY AND SUSTAINABILITY
HARLEY DAVISON
REPETITIVE MANUFACTURING WORKS
The leading U.S. motorcycle company
Emphasizes quality and lean manufacturing
Groups together production of parts that require similar processes (work cells)
Work cells perform in one location -all the operations necessary for production of a specific module
Raw materials move to the work cells and the modules proceed to the assembly line
Materials go to assembly line on a Just-in-time system
Materials as Needed (MAN) system (a just in time system)
Many variations possible
Tightly scheduled repetitive production line
Highly automated
PROCESS FLOW DIAGRAM
PROCESS STRATGIES
Process strategy is an Organization’s approach to transforming resources into goods and services
The objective of a process strategy is to build a production process that meets customer requirements
and product specifications within cost and other managerial constraints
*PROCESS, VOLUME & VARIETY (KNOW DIAGRAM AXIS)
READ FROM THE TEXTBOOK 1-6, 12, 18 - Suggested Questions: 7.3 and 7.4
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Virtually every good or service is made by using some variation of one of the four process strategies
The relationship of these four strategies to volume and variety is important to study
Arnold Palmer is process focused
Harley Davidson is using repetitive process techniques
Frito Lay is using product focused and
Dell is using mass customization technique
PROCESS STRATEGIES
How to produce a product or provide a service that
Meets or exceeds customer requirements
Meets cost and managerial goals and constraints
Has long-term effects on
Efficiency and production flexibility
Costs and quality
The limitations of a firm’s operation strategy are determined at the time of the process decision
FOUR BASIC PROCESS STRATGIES
1. Process focus
2. Repetitive focus
3. Product focus
4. Mass customization
Within these basic strategies there are many ways they may be implemented
PROCESS FOCUS
Facilities are organized around specific activities or processes
General purpose equipment and skilled personnel
High degree of product flexibility
Typically high costs and low equipment utilization (as low as 5%)
Product flows may vary considerably making planning and scheduling a challenge
In an office, the processes might be payable, sales, and payroll
In a manufacturing facility, processes could be welding, grinding, and painting
In a restaurant, processes could be bar, grill, and bakery
Think about a hospital
A diverse group of patients entering the hospital
It is a process focused facility
Patients need to be directed to specialized departments, treated in a distinct way.
REPETITIVE FOCUS
Facilities often organized as assembly lines
Sometimes we this type of process- classic assembly line
READ FROM THE TEXTBOOK 1-6, 12, 18 - Suggested Questions: 7.3 and 7.4
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Characterized by modules with parts and assemblies made previously
Modules may be combined for many output options
Less flexibility than process-focused facilities but more efficient
It is widely used in all automobiles and household appliances
Fast food companies are using this type of processes
With repetitive process, firms obtain both the economic advantages of the continuous model (where
many of the modules are prepared) and the custom advantage of the low-volume, high variety
PRODUCT FOCUS
Facilities are organized by product
High volume but low variety of products
Long, continuous production runs enable efficient processes
Typically high fixed cost but low variable cost
Generally less skilled labour
Products such as glass, paper, tin sheets, lightbulb, beer, and potato chips are made with this type
An organization producing the same light bulb or hot dog bun day after day can organize around a
product
This type of organization has an inherent ability to set standards and maintain a given quality
MASS CUSTOMIZATION
The rapid, low-cost production of goods and service to satisfy increasingly unique customer desires
Combines the flexibility of a process focus with the efficiency of a product focus
READ FROM THE TEXTBOOK 1-6, 12, 18 - Suggested Questions: 7.3 and 7.4
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Document Summary

Groups together production of parts that require similar processes (work cells) Work cells perform in one location -all the operations necessary for production of a specific module. Raw materials move to the work cells and the modules proceed to the assembly line. Materials go to assembly line on a just-in-time system. Materials as needed (man) system (a just in time system) Process strategy is an organization"s approach to transforming resources into goods and services. The objective of a process strategy is to build a production process that meets customer requirements and product specifications within cost and other managerial constraints. Virtually every good or service is made by using some variation of one of the four process strategies. The relationship of these four strategies to volume and variety is important to study. Arnold palmer is process focused: harley davidson is using repetitive process techniques, dell is using mass customization technique. How to produce a product or provide a service that.

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