MAN 3504 Chapter Notes - Chapter 7: Mass Customization, Root Mean Square, Variable Cost

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2 Oct 2017
Service Ops Mgmt Notes 3!
process strategy - an organization's approach to transforming resources into goods and
services. !
-Objective is to create a process that can produce oerings that meet customer requirements
within cost and other managerial constraints. !
Every good or service is made by a variation of one of the four process strategies: !
1. Product Focus (High Volume, Low Variety) !
2. Repetitive Focus (Med Volume, Med Variety) !
3. Process Focus (Low Volume, High Variety) !
4. Mass Customization (High Volume, High Variety) !
Process Focus!
-Produce low vol, high variety products in “job shops”. !
-Organized around specific activities or processes. !
-Process focused in terms of equipment, layout and supervision !
-High degree of product flexibility as products move b/w the specialized processes !
-Each process is designed to perform a variety of activities and handle frequent changes
(intermittent processes)!
Repetitive Focus!
-Modules are parts or components previously prepared, in product-focused (continuous)
process !
-repetitive process is the assembly line. !
-More structure and less flexibility than process-focused !
-Fast food firms - another example!
-Firms obtain both the economic advantages of product-focused model and the custom
advantage of the low volume, high variety model. !
Product Focus !
-High volume, low variety !
-Organized around products.!
-Called continuous processes because they have long, continuous production runs. !
-Only with standardization and eective quality control that firms have established product-
focused facilities. !
-Firms have ability to set standards and maintain a given quality, as opposed to producing
unique products !
-Eg., Shouldice Hospital for hernias only vs. general hospital!
-High fixed cost, low variable cost !
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