• The success of any organization depends on its ability to provide them with products (goods and
services) that satisfy their needs, wants and expectations.
• Process managers, therefore, need to understand the product attributes that customers’ value.
• Product Delivery-Response time – Availability – Accessibility
• Product Variety – Custom made (one-of-a-kind) – Mass production
• Product Quality – Features (iPhone) – Performance (Rolls Royce) – Reliability (Toyota)
Firms compete on product attributes, but production requires a good process.
-Process Flow Time
-Process Flexibility – Flexible Resources
3.Classification of Processes by Process Architecture
- Project (house construction) you only do it once
- Job Shop (parts for aerospace) you do it more than once, specialist
- Batch (cookies, refrigerators)
- Line Flow (auto assembly, meat packing)
- Continuous Flow (oil wells) you can’t stop it, never shut down.
1) Canada auto workers are an example of _d_?
2) Contingency approach to leadership suggests that the leader should: shift his/her style based on
3) Pay, praise, promotion, suspensions, firing are examples of:
f. all of the above.
What defines a Good Process?
Related to economical and outside environment of the process
• Financial, Marketing, Customer Satisfaction
Related to the process attributes
• Operational expenses
• Capacity utilization
• Inventory levels
• Flow time
• Throughput (Flow Rate) is the average number of flow units produced by the process per unit
•Theoretical Process Capacity is the maximal number of units that can be processed. It is an
upper bound on throughput.
•Utilization rate = Throughput / Theoretical Process Capacity
•Capacity analysis is the assessment of theoretical process capacity.
• Resource Unit: a single “resource” (machine or worker) that can perform a particular activity.
• Resource Pool: a collection of interchangeable resource units that can perform the same set of
Capacity Adjustments: Downtime
-Most real-life resource units suffer occasional breakdowns that affect capacity (eg. sick days)
-Therefore a resource unit may not be available all the time during its scheduled availability
-An adjustment can be calculated based on averages of downtime.
•Bottleneck is the resource with the lowest effective capacity
-Bottleneck resources control process capacity
–An increase in capacity at a bottleneck can lead to an increase in process capacity
– An increase in capacity of a non-bottleneck has no effect on the capacity of the
- A popular approach to production scheduling and control (“theory of constraints”) is
centered on controlling the process so as to ensure that bottleneck resources operate as
efficiently as possible
- Resources may not be utilized even when available (congestion)
- StarvationInsufficient necessary inputs
Lack of synchronization between various flows
- Blockage here is no place to store additional flow units
buffer size, slack capacity
- Process capacity is the maximum capacity taking into account that resources may not be
available and may be idle when available
- External factors may affect throughput – Supply- Demand
- Throughput = min (supply, process capacity, demand)
Throughput process capacity process effective capacity process theoretical capacity
• Categories of Productivity
- Labour productivity (of nations)
- Manufacturing vs. service
- Industry productivity (mining vs. banking)
- Company productivity
- One of the ways to differentiate
- Quick way to low cost
- Southwest airlines (Strategy of short haul, small fields; decreases time on ground
No reserved seating • No boarding passes • No baggage transfer)
Total Quality Management
- Begins with design principles centred on what the customer wants
- Org design around continuous improvement of both product/services and processes
- Recognize what is important to customers
- Empower employees to take whatever steps are necessary to ensure quality
i.e.Anyone can stop the line at Toyota
- Must collect data in order to measure improvements in quality (SPC etc.)
- Benchmarking within a company or across an industry is an example ()
- ISO9000 and ISO14000
Business process re-engineering (is the fundamental rethinking and radical redesign of
business processes to achieve dramatic improvements so that services and goods are produced at
the lowest possible cost and at the highest value for the customer.)