Microsoft PowerPoint - OM_Process_Analysis_2019.pptx1
A process converts inputs into outputs.
Process selection decides on the way production of goods or  services will be organized.
1. How much variety in products or services?
2. What degree of equipment flexibility?
3. What is the volume of output?

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Batch shop
Job shop (work center)
Project oneofakind
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5
Setup/Changeover 

Maintain production quality
No setup  No batching
Batch of 1
Batch of 5
Batch of 10
Batch of 20
Set-up from part B to part A = 50 min
Set-up from part A to part B = 50 min
Produce part B
Produce part A
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1
1
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Assembly
Equipment  general general special special
Labor Skills high moderate low low
Fixed Costs low moderate high very high very high
Cost per unit high moderate low very low very high
Scheduling complex complex routine routine complex
WIP  high high low low very low
vs. vs.
vs.
MaketoStock MaketoOrder Production mode

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McDonald’s customer satisfaction drops for three years in a row. The company reported its first ever quarterly loss in 2003.
FGI Cook Assemble
Deliver
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Process Capacity (≠ throughput rate): 
flow rate, Throughput rate:
Work In Process = 
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Throughput time = days of supply
Days of supply =
average inventory (units or $)
average inventory (units or $) ___________________________
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Kohl’s
Cost of Goods Sold 11359 10679 10332 10459 9890
Inventory 3036 2923 2799 2856 2588
Net Income 1114 991 885 1084 1109
Inventory Turn 3.74 3.65 3.69 3.66 3.82
Walmart
Cost of Goods Sold 307646 297500 299419 280198 258693
Inventory 36318 33160 34511 35180 33685
Net Income 16389 14335 13118 12884 12036
Inventory Turn 8.47 8.97 8.68 7.96 7.68
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Product Layout and Cycle Time
Cycle time is the maximum time allowed at each workstation  to complete its set of tasks on a unit.
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0.1 min 0.7 min 1.0 min 0.5 min 0.2 min
0.1 min 0.7 min 1.0 min 0.5 min 0.2 min
Movie: Lucy and Ethel 
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1-4 3-6 3-4
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Assembly Drilling work center




Place orientation (e.g., "Where am I?")
Function orientation (e.g., "How does this organization work, and what do I do next?").
Formula facilities draw on previous experience
Anxiety and a sense of helplessness can result if spatial  cues are not present.
Place Orientation
Spatial layout and functionality
perimeter pattern, store clustering
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vs. vs.
Layout decisions are often closely related to process  selection decisions.
Manufacturing layout
Service Layout