OM

• Process Selection refers to deciding on the way production of goods or services will be organized
• Process Selection has major implications for:

  • Capacity planning
  • Layout of facilities
  • Equipment
  • Design of work systems
• Key Aspects of Process Strategy:

  • Capital Intensity: mix of equipment and labor used by the organization
  • Process flexibility: degree to which the system can be adjusted to changes in processing requirements
  • Technology: application of scientific discoveries to development and improvement of products, services, and operations processes
• Technology Innovation involves the discovery and development of new or improved products, services, or processes for producing or providing them
• Types of Technology:

  1. Product and service technology: discovery and development of new products and services

  2. Process technology: methods, procedures, and equipment used to produce goods and provide services

  3. Information technology: science and use of computers and other electronic equipment to store, process, and send information
• Technology for Competitive Advantage:

  • Technological advances can lead to competitive advantage
  • Product technology can increase market share and profits
  • Processing technology can improve quality, lower costs, increase productivity, and expand processing capabilities
• Facilities Layout:

  • Layout is the configuration of departments, work centers, and equipment with emphasis on movement of work through the system
  • Layout decisions arise when designing new facilities or re-designing existing facilities
• Basic Layout Types:

  • Product layouts
  • Process layouts
  • Fixed-Position layouts
  • Combination layouts
• Product Layout Advantages:

  • High rate of output
  • Low unit cost
  • Labor specialization
  • High utilization of labor and equipment
  • Established routing and scheduling
• Process Layout Advantages:

  • Can handle a variety of processing requirements
  • Not particularly vulnerable to equipment failures
  • General-purpose equipment is often less costly than specialized equipment used in product layouts
• Fixed Position Layouts:

  • Product or project remains stationary, and workers, materials, and equipment are moved as needed
• Flexible Manufacturing System (FMS):

  • Group of machines designed to handle intermittent processing requirements and produce a variety of similar products
  • Includes supervisory computer control, automatic material handling, and robots or other automated processing equipment
• Computer Integrated Manufacturing (CIM):

  • System for linking a broad range of manufacturing activities through an integrated computer system
  • Activities include engineering design, FMS, purchasing, order processing, production planning, and control
• Line Balancing:

  • Process of assigning tasks to workstations in a way that workstations have approximately equal time requirements
  • Cycle Time: maximum time allowed at each workstation to complete its set of tasks on a unit
• Precedence Diagram:

  • Diagram showing elemental tasks and their precedence requirements
• Designing Process Layouts:

  • Main issue concerns the relative placement of departments
  • Measuring effectiveness involves minimizing transportation cost, distance, or time
• Information Requirements for designing process layouts:

  • List of departments to be arranged and their dimensions
  • Projection of future workflows between work centers
  • Distance between locations and cost per unit to move loads
  • Amount of money to be invested in the layout
  • Special considerations, location of utilities, access and exit points
• Quality of Work Life affects workers' overall sense of well-being and contentment, as well as their productivity
• Important aspects of Quality of Work Life:

  • How a worker gets along with co-workers
  • Quality of management
  • Working conditions
  • Compensation
• Compensation approaches:

  • Time-based systems
  • Output-based systems
  • Incentive systems
  • Knowledge-based systems
• Compensation System:

  • Time-based system: compensation based on the time an employee has worked during the pay period
  • Output-based (incentive) system: compensation based on the amount of output an employee produced during the pay period
• Incentive Plan Success:

  • To obtain maximum benefit from an incentive plan, it should be:

  1. Accurate

  2. Easy to apply

  3. Consistent

  4. Easy to understand

  5. Fair
• Individual and Group Incentive Plans:

  • Individual incentive plans:
  • Straight piecework
  • Base rate + bonus
  • Group incentive plans tend to stress sharing of productivity gains with employees
• Knowledge-Based Pay Systems:

  • A pay system used by organizations to reward workers who undergo training that increases their skills
  • Three dimensions:

  1. Horizontal skills: reflect the variety of tasks the worker is capable of performing

  2. Vertical skills: reflect the managerial skills the worker is capable of

  3. Depth skills: reflect quality and productivity results
• Management Compensation:

  • Many organizations used to reward managers based on output
  • New emphasis is being placed on other factors of performance such as customer service and quality
  • Executive pay is increasingly being tied to the company or division for which the executive is responsible
• Job Design:

  • Specifies the contents and methods of jobs
  • Objectives include productivity, safety, and quality of work life
• Designing Work Systems:

  • Efficiency vs. Behavioral approaches to job design
  • Includes:
  • Specialization
  • Motivation
  • Teams
  • Ergonomics
  • Methods analysis
  • Motion studies
  • Working conditions
• Efficiency vs. Behavioral Job Design:

  • Efficiency School emphasizes a systematic, logical approach to job design
  • Behavioral School emphasizes satisfaction of needs and wants of employees
• Ergonomics:

  • Concerned with the understanding of interactions among human and other elements of a system
  • Three domains of ergonomics: Physical, Cognitive, Organizational
• Methods Analysis:

  • Analyzing how a job gets done
  • Includes:
  • Workplace arrangement
  • Movement of workers and/or materials
• Flow process chart:

  • Used to examine the overall sequence of an operation by focusing on movements of the operator or flow of materials
• Worker Machine chart:

  • Used to determine portions of a work cycle during which an operator and equipment are busy or idle
• Motion Study:

  • Systematic study of the human motions used to perform an operation
  • Techniques include:
  • Motion study principles
  • Analysis of therbligs
  • Micromotion study
  • Charts
• Work Measurement:

  • Concerned with how long it should take to complete a job
  • Commonly used techniques:
  • Stopwatch time study
  • Historical times
  • Predetermined data
  • Work sampling
• Standard Time:

  • The amount of time it should take a qualified worker to complete a specified task, working at a sustainable rate, using given methods, tools and equipment, raw material inputs, and workplace arrangement
• Stopwatch Time Study:

  • Used to develop a time standard based on observations of one worker taken over a number of cycles
• Historical Times:

  • Standard Elemental Times derived from a firm's own historical time study data
• Predetermined Time Standards:

  • Involve the use of published data on standard elemental times
• Work Sampling:

  • Technique for estimating the proportion of time that a worker or machine spends on various activities and idle time