OM (Chapter 7)

Configurations of standard parts, subassemblies, or services that can be selected by customers from a limited set.

Ex: Computer, Sandwich

Made according to a fixed design, and the customer has no options from which to choose.

Ex: Shoes, credit cards

L-scale, customized initiatives that consist of many smaller tasks and activities that must be coordinated and completed to finish on time and within budget.

Characteristics: One of a kind, large scale, complex

Ex: Construction, consulting, software development

Organized around particular types of general-purpose equipment that are flexible and capable of customizing work for individual customers.

Characteristics: Significant setup and/or changeover time, batching, low to moderate volume, many routes, many different products, high work-force skills, customized to customer’s specs.

Examples: hospital, legal service, some restaurants

Organized around a fixed sequence of activities and process steps, such as an assembly line, to produce a limited variety of similar goods or services.

Characteristics: Little / no setup time, dedicated to small range of goods or services that are similar, similar sequence of process steps, moderate to high volume.

Examples: Assembly of automobiles etc., production of insurance policies

Tt creates highly standardized goods or services, usually around the clock in very high volumes.

Characteristics: Very high volumes in a fixed processing sequence, high investment in system, 24-hour/7-day continuous operation, automated, dedicated to a small range of goods or services.

Examples: Chemical, gasoline, paint, toy, steel factories; electronic funds transfer

Characterization of product growth, maturity, and decline over time.

(Important implications in terms of process design & choice)

(y) - process choice decision

(x) - product characteristics

1. Task (specific unit of work required to create output)
2. activity - a group of tasks (sometimes called a workstation) needed to create and deliver an intermediate or final output.
3. process - a group of activities
4. value chain - a network of processes

Describes the sequence of all process activities and tasks necessary to create and deliver a desired output or outcome.

Refers to all value-added activities involved in designing, producing, and delivering goods and services to customers.

A VSM shows the process flows in a manner similar to an ordinary process map; however, the difference lies in that value stream maps highlight value-added versus non-value-added activities and include costs associated with work activities for both value- and non-value-added activities.

1. Are the steps in the process arranged in logical sequence?
2. Do all steps add value?
3. Are capacities of each step in balance; that is, are there any bottlenecks for which customers would have to wait for a long time?
4. What skills, equipment and tools are required at each step of the process? Should some steps be automated?

The average number of entities completed per unit of time (the output rate from a process)

The work activity that effectively limits throughput of the entire process.

Avarage time it takes to complete one cycle of a process.

work-In-Process = throughput * flowTime

WIP=R*T