Chapter 1 - Introduction To Process and Technology
Chapter 1 - Introduction To Process and Technology
Chapter 1 - Introduction To Process and Technology
6-1
Lecture Outline
• Process Planning
• Process Analysis
• Process Innovation
• Technology Decisions
• Process
• Group of related tasks with specific inputs & outputs
• Process design
• tasks to be done & how they are coordinated among
functions, people, & organizations
• Process strategy
• an organization’s overall approach to transforming
resources into goods and services
• Process planning
• converts designs into workable instructions for
manufacture or delivery
• Vertical integration
• extent to which firm will produce inputs and control outputs
of each stage of production process
• Capital intensity
• mix of capital (i.e., equipment, automation) and labor
resources used in production process
• Process flexibility
• ease with which resources can be adjusted in response to
changes in demand, technology, products or services,
and resource availability
• Customer involvement
• role of customer in production process
• Cost • Speed
• Capacity • Reliability
• Quality • Expertise
• Projects
• one-of-a-kind production of a product to customer order
• Batch production
• process many different jobs at the same time in groups or
batches
• Mass production
• produce large volumes of a standard product for a mass
market
• Continuous production
• used for very-high volume commodity products
One-at-a- Few
Type of Mass Mass
customer time individual
market market
customers
Product
demand Infrequent Fluctuates Stable Very stable
Demand Low to
Very low High Very high
volume medium
No. of Infinite
different Many, varied Few Very few
products variety
Repetitive, Continuous,
Production Long-term Discrete, job
system assembly process
project shops
lines industries
Mixing,
Primary type Specialized
of work Fabrication Assembly treating,
contracts
refining
Experts, Limited
Worker skills Wide range Equipment
crafts- range of
of skills monitors
persons skills
Capital
Non-repetitive, Costly, slow, Difficult to change,
Dis- investment;
small customer difficult to far-reaching errors,
advantages lack of
base, expensive manage limited variety
responsiveness
Machine shops, Automobiles,
Construction, print shops, televisions, Paint, chemicals,
Examples shipbuilding,
bakeries, computers, foodstuffs
spacecraft
education fast food
cf = fixed cost
V = volume (i.e., number of units produced and sold)
cv = variable cost per unit
p = price per unit
TR = TC
vp = cf + vcv
vp - vcv = cf
v(p - cv) = cf
cf
v= p-c
v
Break-even point is
cf 2000
v= p-c = = 40 units
v 100 - 50
Dollars
$3,000 — Total
cost
line
$2,000 —
$1,000 —
Total
revenue
line
40 Units
Break-even point
• Determine objectives
• Define process boundaries
• Define units of flow
• Choose type of chart
• Observe process and collect data
• Map out process
• Validate chart
Operation
Inspection
Transportation
Delay
Storage
Continuous
improvement refines
the breakthrough
Breakthrough
Improvement
Continuous improvement
activities peak; time to
reengineer process
Product Development
Manufacturing
Purchasing
Accounting
Order Fulfillment
Sales
Supply Chain Management
Customer Service
Function Process
Baseline Data
Customer Goals for Process Benchmark
Requirements Performance
Data
Detailed Model
Process Map Validation Key
Performance
Measures
Pilot Study
of New Design
• Extranet
• Intranets connected to the Internet for shared access with select
suppliers, customers, and trading partners
• Bar Codes
• Series of vertical lines printed on packages that identify item and other
information
• Radio Frequency Identification tags (RFID)
• Integrated circuit embedded in a tag; can send and receive information; a
“twenty-first century bar code” with read/write capabilities
• Electronic data interchange (EDI)
• Computer-to-computer exchange of business documents over a proprietary
network; very expensive and inflexible