Departament d’Economia de l’Empresa Department of Business

7 – 1

Departament d’Economia de l’Empresa / Department of Business Economics & Administration

Operations Management

Session 3 – Session 3 – Process and Layout Process and Layout StrategiesStrategies

7 – 2Departament d’Economia de l’Empresa /

Department of Business Economics & Administration

OutlineOutline

Global Company Profile: Dell Global Company Profile: Dell Computer Corp.Computer Corp.

Four Process StrategiesFour Process Strategies

Process FocusProcess Focus

Repetitive FocusRepetitive Focus

Product FocusProduct Focus

Mass Customization FocusMass Customization Focus

Comparison of Process ChoicesComparison of Process Choices



Outline – ContinuedOutline – Continued

Process Analysis and DesignProcess Analysis and Design Flow DiagramsFlow Diagrams

Time-Function MappingTime-Function Mapping

Value-Stream MappingValue-Stream Mapping

Process ChartsProcess Charts

Service BlueprintingService Blueprinting




Service Process DesignService Process Design Customer Interaction and Process Customer Interaction and Process

DesignDesign

More Opportunities to Improve Service More Opportunities to Improve Service ProcessesProcesses

Selection of Equipment and Selection of Equipment and TechnologyTechnology




Production TechnologyProduction Technology Machine TechnologyMachine Technology

Automatic Identification Systems (AISs) Automatic Identification Systems (AISs) and RFIDand RFID

Process ControlProcess Control

Vision SystemsVision Systems

RobotsRobots




Production Technology (cont.)Production Technology (cont.) Automated Storage and Retrieval Automated Storage and Retrieval

Systems (ASRSs)Systems (ASRSs)

Automated Guided Vehicles (AGVs)Automated Guided Vehicles (AGVs)

Flexible Manufacturing Systems (FMSs)Flexible Manufacturing Systems (FMSs)

Computer-Integrated Manufacturing Computer-Integrated Manufacturing (CIM)(CIM)




Technology in ServicesTechnology in Services

Process Redesign Process Redesign

Ethics and Environmentally Ethics and Environmentally Friendly ProcessesFriendly Processes



Learning ObjectivesLearning Objectives

When you complete this chapter you When you complete this chapter you should be able to:should be able to:

1.1. Describe four production processesDescribe four production processes

2.2. Compute crossover points for different Compute crossover points for different processesprocesses

3.3. Use the tools of process analysisUse the tools of process analysis

4.4. Describe customer interaction in Describe customer interaction in process designprocess design

5.5. Identify recent advances in production Identify recent advances in production technologytechnology



Dell Computer CompanyDell Computer CompanyMass customization provides a competitive Mass customization provides a competitive

advantageadvantage

Sell custom-built PCs directly to consumerSell custom-built PCs directly to consumer

Lean production processes and good product Lean production processes and good product design allow responsivenessdesign allow responsiveness

Integrate the Web into every aspect of its Integrate the Web into every aspect of its businessbusiness

Focus research on software designed to make Focus research on software designed to make installation and configuration of its PCs fast installation and configuration of its PCs fast and simpleand simple



Process, Volume, and VarietyProcess, Volume, and Variety

Process Focusprojects, job shops

(machine, print, carpentry)

Standard Register

Repetitive(autos, motorcycles)

Harley-Davidson

Product Focus(commercial

baked goods, steel, glass)Nucor Steel

High VarietyHigh Varietyone or few units one or few units per run, high per run, high varietyvariety(allows (allows customization)customization)

Changes in Changes in ModulesModulesmodest runs, modest runs, standardized standardized modulesmodules

Changes in Changes in Attributes (such Attributes (such as grade, as grade, quality, size, quality, size, thickness, etc.) thickness, etc.) long runs onlylong runs only

Mass Customization(difficult to achieve, but

huge rewards)Dell Computer

Poor Strategy Poor Strategy (Both fixed and (Both fixed and

variable costs are variable costs are high)high)

Low Low VolumeVolume

Repetitive Repetitive ProcessProcess

High High VolumeVolume

VolumeVolumeFigure 7.1Figure 7.1



Process StrategiesProcess Strategies

How to produce a product or provide a How to produce a product or provide a service thatservice that Meets or exceeds customer Meets or exceeds customer

requirementsrequirements

Meets cost and managerial goalsMeets cost and managerial goals

Has long term effects onHas long term effects on Efficiency and production flexibilityEfficiency and production flexibility

Costs and qualityCosts and quality



Process StrategiesProcess Strategies

Four basic strategiesFour basic strategies

Process focusProcess focus

Repetitive focusRepetitive focus

Product focusProduct focus

Mass customizationMass customization

Within these basic strategies there are Within these basic strategies there are many ways they may be implementedmany ways they may be implemented




Facilities are organized around specific Facilities are organized around specific activities or processesactivities or processes

General purpose equipment and skilled General purpose equipment and skilled personnelpersonnel

High degree of product flexibilityHigh degree of product flexibility

Typically high costs and low equipment Typically high costs and low equipment utilizationutilization

Product flows may vary considerably Product flows may vary considerably making planning and scheduling a making planning and scheduling a challengechallenge




Many Many inputsinputs

Many Many variety variety

of of outputsoutputs

Job ShopJob Shop

Ma

ny d

epa

rtm

ent

s a

nd

man

y ro

utin

gs



Accounting

Process Flow DiagramProcess Flow Diagram

Information flowInformation flowMaterial flowMaterial flow

Figure 7.2Figure 7.2

COLLATING DEPT

GLUING, BINDING, STAPLING, LABELING

POLYWRAP DEPT

SHIPPING

Customer

PRINTING DEPT

PREPRESS DEPTVendors

Receiving

Warehouse

Purchasing

Customer

Customer sales representative




Facilities often organized as assembly Facilities often organized as assembly lineslines

Characterized by modules with parts Characterized by modules with parts and assemblies made previouslyand assemblies made previously

Modules may be combined for many Modules may be combined for many output optionsoutput options

Less flexibility than process-focused Less flexibility than process-focused facilities but more efficientfacilities but more efficient




Raw Raw materials materials

and and module module inputsinputs

Modules Modules combined combined for many for many

output output optionsoptions

Few Few modulesmodules

Automobile Assembly LineAutomobile Assembly Line



Process Flow DiagramProcess Flow Diagram

THE ASSEMBLY LINETHE ASSEMBLY LINETESTING28 tests

Oil tank work cell

Shocks and forks

Handlebars

Fender work cell

Air cleaners

Fluids and mufflers

Fuel tank work cell

Wheel work cell

Roller testing

Incoming parts

From Milwaukee From Milwaukee on a JIT arrival on a JIT arrival scheduleschedule

Engines and transmissions

Frame tube bending

Frame-building work cells

Frame machining

Hot-paint frame painting

Crating





Facilities are organized by productFacilities are organized by product

High volume but low variety of High volume but low variety of productsproducts

Long, continuous production runs Long, continuous production runs enable efficient processesenable efficient processes

Typically high fixed cost but low Typically high fixed cost but low variable costvariable cost

Generally less skilled laborGenerally less skilled labor




Few Few inputsinputs

Output Output variations variations

in size, in size, shape, and shape, and packagingpackaging

Continuous Work FlowContinuous Work Flow



Product FocusProduct FocusNucor Steel PlantNucor Steel Plant

Con

tinuo

us

cast

erC

ontin

uou

s ca

ster

Continuous cast steel Continuous cast steel sheared into 24-ton slabssheared into 24-ton slabs

Hot tunnel furnace - 300 ftHot tunnel furnace - 300 ft

Hot mill for finishing, cooling, and coilingHot mill for finishing, cooling, and coiling

DD

EE FF

GGHHII

Scrap Scrap steelsteel

Ladle of molten steelLadle of molten steelElectric Electric furnacefurnace

AA

BBCC



Mass CustomizationMass Customization

The rapid, low-cost production of The rapid, low-cost production of goods and service to satisfy goods and service to satisfy increasingly unique customer desiresincreasingly unique customer desires

Combines the Combines the flexibility of a flexibility of a process focus process focus with the efficiency with the efficiency of a product focusof a product focus




Vehicle modelsVehicle models 140140 286286Vehicle typesVehicle types 1818 1,2121,212Bicycle typesBicycle types 88 1919Software titlesSoftware titles 00 400,000400,000Web sitesWeb sites 00 98,116,99398,116,993Movie releasesMovie releases 267267 458458New book titlesNew book titles 40,53040,530 77,44677,446Houston TV channelsHouston TV channels 55 185185Breakfast cerealsBreakfast cereals 160160 340340Items (SKUs) in Items (SKUs) in 14,00014,000 150,000150,000 supermarketssupermarketsLCD TVsLCD TVs 00 102102

Number of ChoicesNumber of Choices

ItemItem 1970s1970s 2121stst Century Century Table 7.1Table 7.1




Mass Customization

Effective Effective scheduling scheduling techniquestechniques

Rapid Rapid throughput throughput techniquestechniques

Repetitive FocusRepetitive FocusFlexible peopleFlexible peopleand equipmentand equipment

Process-FocusedProcess-FocusedHigh variety, low volumeHigh variety, low volume

Low utilization (5% to 25%)Low utilization (5% to 25%)General-purpose equipmentGeneral-purpose equipment

Product-FocusedProduct-FocusedLow variety, high volumeLow variety, high volume

High utilization (70% to 90%)High utilization (70% to 90%)Specialized equipmentSpecialized equipment


Modular techniquesModular techniquesSupportive Supportive

supply supply chainschains



Comparison of ProcessesComparison of Processes


(Low volume, (Low volume, high variety)high variety)

Repetitive Repetitive FocusFocus

(Modular)(Modular)


(High-volume, (High-volume, low-variety)low-variety)

Mass Mass CustomizationCustomization

(High-volume, (High-volume, high-variety)high-variety)

Small quantity, Small quantity, large variety of large variety of productsproducts

Long runs, Long runs, standardized standardized product made product made from modulesfrom modules

Large quantity, Large quantity, small variety of small variety of productsproducts

Large quantity, Large quantity, large variety of large variety of productsproducts

General General purpose purpose equipmentequipment

Special Special equipment aids equipment aids in use of in use of assembly lineassembly line

Special Special purpose purpose equipmentequipment

Rapid Rapid changeover on changeover on flexible flexible equipmentequipment

Table 7.2Table 7.2







(Modular)(Modular)





Operators are Operators are broadly skilledbroadly skilled

Employees are Employees are modestly modestly trainedtrained

Operators are Operators are less broadly less broadly skilledskilled

Flexible Flexible operators are operators are trained for the trained for the necessary necessary customizationcustomization

Many job Many job instructions as instructions as each job each job changeschanges

Repetition Repetition reduces reduces training and training and changes in job changes in job instructionsinstructions

Few work Few work orders and job orders and job instructions instructions because jobs because jobs standardizedstandardized

Custom orders Custom orders require many require many job instructionsjob instructions

Table 7.2Table 7.2







(Modular)(Modular)





Raw material Raw material inventories inventories highhigh

JIT JIT procurement procurement techniques techniques usedused

Raw material Raw material inventories are inventories are lowlow

Raw material Raw material inventories are inventories are lowlow

Work-in-Work-in-process is highprocess is high

JIT inventory JIT inventory techniques techniques usedused

Work-in-Work-in-process process inventory is lowinventory is low

Work-in-Work-in-process process inventory driven inventory driven down by JIT, down by JIT, lean productionlean production

Table 7.2Table 7.2







(Modular)(Modular)





Units move Units move slowly through slowly through the plantthe plant

Movement is Movement is measured in measured in hours and dayshours and days

Swift Swift movement of movement of unit through the unit through the facility is typicalfacility is typical

Goods move Goods move swiftly through swiftly through the facilitythe facility

Finished goods Finished goods made to ordermade to order

Finished goods Finished goods made to made to frequent frequent forecastforecast

Finished goods Finished goods made to made to forecast and forecast and storedstored

Finished goods Finished goods often build-to-often build-to-order (BTO)order (BTO)

Table 7.2Table 7.2







(Modular)(Modular)





Scheduling is Scheduling is complex, complex, trade-offs trade-offs between between inventory, inventory, availability, availability, customer customer serviceservice

Scheduling Scheduling based on based on building building various models various models from a variety from a variety of modules to of modules to forecastsforecasts

Relatively Relatively simple simple scheduling, scheduling, establishing establishing output rate to output rate to meet forecastsmeet forecasts

Sophisticated Sophisticated scheduling scheduling required to required to accommodate accommodate custom orderscustom orders

Table 7.2Table 7.2







(Modular)(Modular)





Fixed costs Fixed costs low, variable low, variable costs highcosts high

Fixed costs Fixed costs dependent on dependent on flexibility of the flexibility of the facilityfacility

Fixed costs Fixed costs high, variable high, variable costs lowcosts low

Fixed costs Fixed costs high, variable high, variable costs must be costs must be lowlow

Costing Costing estimated estimated before job, before job, known only known only after the jobafter the job

Costs usually Costs usually known due to known due to extensive extensive experienceexperience

High fixed costs High fixed costs mean costs mean costs dependent on dependent on utilization of utilization of capacitycapacity

High fixed costs High fixed costs and dynamic and dynamic variable costs variable costs make costing a make costing a challengechallenge

Table 7.2Table 7.2



Process Analysis ToolsProcess Analysis Tools

Flowcharts provide a view of the big Flowcharts provide a view of the big picturepicture

Time-function mapping adds rigor Time-function mapping adds rigor and a time elementand a time element

Value-stream analysis extends to Value-stream analysis extends to customers and supplierscustomers and suppliers

Process charts show detailProcess charts show detail

Service blueprint focuses on Service blueprint focuses on customer interactioncustomer interaction



Improving Service Improving Service ProductivityProductivity

StrategyStrategy TechniqueTechnique ExampleExample

SeparationSeparation Structure service so Structure service so customers must go customers must go where service is offeredwhere service is offered

Bank customers go to a Bank customers go to a manager to open a new manager to open a new account, to loan officers account, to loan officers for loans, and to tellers for loans, and to tellers for depositsfor deposits

Self-serviceSelf-service Self-service so Self-service so customers examine, customers examine, compare, and evaluate compare, and evaluate at their own paceat their own pace

Supermarkets and Supermarkets and department stores, department stores, Internet orderingInternet ordering

Table 7.3Table 7.3




PostponementPostponement Customizing at deliveryCustomizing at delivery Customizing vans at Customizing vans at delivery rather than at delivery rather than at productionproduction

FocusFocus Restricting the offeringsRestricting the offerings Limited-menu Limited-menu restaurantrestaurant

ModulesModules Modular selection of Modular selection of service, modular service, modular productionproduction

Investment and Investment and insurance selection, insurance selection, prepackaged food prepackaged food modules in restaurantsmodules in restaurants


Table 7.3Table 7.3




AutomationAutomation Separating services that Separating services that may lend themselves to may lend themselves to automationautomation

Automatic teller Automatic teller machinesmachines

SchedulingScheduling Precise personnel Precise personnel schedulingscheduling

Scheduling ticket counter Scheduling ticket counter personnel at 15-minute personnel at 15-minute intervals at airlinesintervals at airlines

TrainingTraining Clarifying the service Clarifying the service options, explaining how options, explaining how to avoid problemsto avoid problems

Investment counselor, Investment counselor, funeral directors, after-funeral directors, after-sale maintenance sale maintenance personnelpersonnel


Table 7.3Table 7.3



Improving Service Improving Service ProcessesProcesses

LayoutLayout Product exposure, customer Product exposure, customer

education, product enhancementeducation, product enhancement

Human ResourcesHuman Resources Recruiting and trainingRecruiting and training

Impact of flexibilityImpact of flexibility



Production TechnologyProduction Technology

Machine technologyMachine technology

Automatic identification Automatic identification systems (AISs)systems (AISs)

Process controlProcess control

Vision systemVision system

RobotRobot

Automated storage and retrieval systems (ASRSs)Automated storage and retrieval systems (ASRSs)

Automated guided vehicles (AGVs)Automated guided vehicles (AGVs)

Flexible manufacturing systems (FMSs)Flexible manufacturing systems (FMSs)

Computer-integrated manufacturing (CIM)Computer-integrated manufacturing (CIM)




Service IndustryService Industry ExampleExample

Financial ServicesFinancial Services Debit cards, electronic funds transfer, ATMs, Debit cards, electronic funds transfer, ATMs, Internet stock tradingInternet stock trading

EducationEducation Electronic bulletin boards, on-line journals, Electronic bulletin boards, on-line journals, WebCT and BlackboardWebCT and Blackboard

Utilities and Utilities and governmentgovernment

Automated one-man garbage trucks, optical Automated one-man garbage trucks, optical mail and bomb scanners, flood warning mail and bomb scanners, flood warning systemssystems

Restaurants and Restaurants and foodsfoods

Wireless orders from waiters to kitchen, robot Wireless orders from waiters to kitchen, robot butchering, transponders on cars that track butchering, transponders on cars that track sales at drive-throughssales at drive-throughs

CommunicationsCommunications Electronic publishing, interactive TVElectronic publishing, interactive TV

Table 7.4Table 7.4




Service IndustryService Industry ExampleExample

HotelsHotels Electronic check-in/check-out, electronic Electronic check-in/check-out, electronic key/lock systemkey/lock system

Wholesale/retail Wholesale/retail tradetrade

ATM-like kiosks, point-of-sale (POS) terminals, ATM-like kiosks, point-of-sale (POS) terminals, e-commerce, electronic communication e-commerce, electronic communication between store and supplier, bar coded databetween store and supplier, bar coded data

TransportationTransportation Automatic toll booths, satellite-directed Automatic toll booths, satellite-directed navigation systemsnavigation systems

Health careHealth care Online patient-monitoring, online medical Online patient-monitoring, online medical information systems, robotic surgeryinformation systems, robotic surgery

AirlinesAirlines Ticketless travel, scheduling, Internet Ticketless travel, scheduling, Internet purchasespurchases

Table 7.4Table 7.4



Process RedesignProcess Redesign

The fundamental rethinking of business The fundamental rethinking of business processes to bring about dramatic processes to bring about dramatic improvements in performanceimprovements in performance

Relies on reevaluating the purpose of the Relies on reevaluating the purpose of the process and questioning both the purpose process and questioning both the purpose and the underlying assumptionsand the underlying assumptions

Requires reexamination of the basic process Requires reexamination of the basic process and its objectivesand its objectives

Focuses on activities that cross functional Focuses on activities that cross functional lineslines

Any process is a candidate for redesignAny process is a candidate for redesign



Ethics and Environmentally Ethics and Environmentally Friendly ProcessesFriendly Processes

Encourage recyclingEncourage recycling

Efficient use of resourcesEfficient use of resources

Reduction of waste by-productsReduction of waste by-products

Use less harmful ingredientsUse less harmful ingredients

Use less energyUse less energy

Reduce the negative impact on the Reduce the negative impact on the environmentenvironment

7 – 41

Departament d’Economia de l’Empresa / Department of Business Economics & Administration

Operations Management

Layout StrategiesLayout Strategies



OutlineOutline

Global Company Profile: Global Company Profile: McDonald’sMcDonald’s

The Strategic Importance of The Strategic Importance of Layout DecisionsLayout Decisions

Types of LayoutTypes of Layout

Office LayoutOffice Layout




Retail LayoutRetail Layout ServicescapesServicescapes

Warehousing and Storage LayoutsWarehousing and Storage Layouts Cross-DockingCross-Docking

Random DockingRandom Docking

CustomizingCustomizing

Fixed-Position LayoutFixed-Position Layout




Process-Oriented LayoutProcess-Oriented Layout Computer Software for Process-Computer Software for Process-

Oriented LayoutsOriented Layouts

Work CellsWork Cells

Requirements of Work CellsRequirements of Work Cells

Staffing and Balancing Work CellsStaffing and Balancing Work Cells

The Focused Work Center and the The Focused Work Center and the Focused FactoryFocused Factory




Repetitive and Product-Oriented Repetitive and Product-Oriented LayoutLayout Assembly-Line BalancingAssembly-Line Balancing



Learning ObjectivesLearning Objectives

When you complete this chapter you When you complete this chapter you should be able to:should be able to:

1.1. Identify the different types of layout and its Identify the different types of layout and its usesuses

2.2. Understand layout relevance for strategyUnderstand layout relevance for strategy



Innovations at McDonald’sInnovations at McDonald’s

Indoor seating (1950s)Indoor seating (1950s)

Drive-through window (1970s)Drive-through window (1970s)

Adding breakfast to the menu (1980s)Adding breakfast to the menu (1980s)

Adding play areas (late 1980s)Adding play areas (late 1980s)

Redesign of the kitchens (1990s)Redesign of the kitchens (1990s)

Self-service kiosk (2004)Self-service kiosk (2004)

Now three separate dining sectionsNow three separate dining sections



Innovations at McDonald’sInnovations at McDonald’s

Indoor seating (1950s)Indoor seating (1950s)

Drive-through window (1970s)Drive-through window (1970s)

Adding breakfast to the menu (1980s)Adding breakfast to the menu (1980s)

Adding play areas (late 1980s)Adding play areas (late 1980s)

Redesign of the kitchens (1990s)Redesign of the kitchens (1990s)

Self-service kiosk (2004)Self-service kiosk (2004)

Now three separate dining sectionsNow three separate dining sections

Six out of the Six out of the seven are layout seven are layout

decisions!decisions!



McDonald’s New LayoutMcDonald’s New Layout

Seventh major innovation Seventh major innovation Redesigning all 30,000 outlets around Redesigning all 30,000 outlets around

the worldthe world Three separate dining areasThree separate dining areas

Linger zone with comfortable chairs and Linger zone with comfortable chairs and Wi-Fi connectionsWi-Fi connections

Grab and go zone with tall countersGrab and go zone with tall counters Flexible zone for kids and familiesFlexible zone for kids and families

Facility layout is a source of Facility layout is a source of competitive advantagecompetitive advantage



Strategic Importance of Strategic Importance of Layout DecisionsLayout Decisions

The objective of layout strategy is to The objective of layout strategy is to develop a cost-effective layout that develop a cost-effective layout that will meet a firm’s competitive needswill meet a firm’s competitive needs



Layout Design Layout Design ConsiderationsConsiderations

Higher utilization of space, equipment, and Higher utilization of space, equipment, and peoplepeople

Improved flow of information, materials, or Improved flow of information, materials, or peoplepeople

Improved employee morale and safer Improved employee morale and safer working conditionsworking conditions

Improved customer/client interactionImproved customer/client interaction

FlexibilityFlexibility




1.1. Office layout Office layout

2.2. Retail layout Retail layout

3.3. Warehouse layoutWarehouse layout

4.4. Fixed-position layoutFixed-position layout

5.5. Process-oriented layoutProcess-oriented layout

6.6. Work-cell layout Work-cell layout

7.7. Product-oriented layoutProduct-oriented layout




1.1. Office layout: Positions workers, their Office layout: Positions workers, their equipment, and spaces/offices to equipment, and spaces/offices to provide for movement of informationprovide for movement of information

2.2. Retail layout: Allocates shelf space Retail layout: Allocates shelf space and responds to customer behavior and responds to customer behavior

3.3. Warehouse layout: Addresses trade-Warehouse layout: Addresses trade-offs between space and material offs between space and material handlinghandling




1.1. Fixed-position layout: Addresses the Fixed-position layout: Addresses the layout requirements of large, bulky layout requirements of large, bulky projects such as ships and buildingsprojects such as ships and buildings

2.2. Process-oriented layout: Deals with Process-oriented layout: Deals with low-volume, high-variety production low-volume, high-variety production (also called job shop or intermittent (also called job shop or intermittent production)production)




1.1. Work cell layout: Arranges machinery Work cell layout: Arranges machinery and equipment to focus on production and equipment to focus on production of a single product or group of related of a single product or group of related productsproducts

2.2. Product-oriented layout: Seeks the Product-oriented layout: Seeks the best personnel and machine best personnel and machine utilizations in repetitive or continuous utilizations in repetitive or continuous productionproduction



Good Layouts ConsiderGood Layouts Consider

1.1. Material handling equipmentMaterial handling equipment

2.2. Capacity and space requirementsCapacity and space requirements

3.3. Environment and aestheticsEnvironment and aesthetics

4.4. Flows of informationFlows of information

5.5. Cost of moving between various Cost of moving between various work areaswork areas




Table 9.1Table 9.1

OfficeOffice RetailRetailWarehouse Warehouse

(storage)(storage)

ExamplesExamples

Allstate InsuranceAllstate Insurance

Microsoft Corp.Microsoft Corp.

Kroger’sKroger’s Supermarket Supermarket

Walgreen’sWalgreen’s

Bloomingdale’sBloomingdale’s

Federal-Mogul’sFederal-Mogul’s warehouse warehouse

The Gap’sThe Gap’s distribution center distribution center

Problems/IssuesProblems/Issues

Locate workers Locate workers requiring frequent requiring frequent contact close to one contact close to one anotheranother

Expose customer to Expose customer to high-margin itemshigh-margin items

Balance low-cost Balance low-cost storage with low-cost storage with low-cost material handlingmaterial handling




Table 9.1Table 9.1

Project Project (fixed position)(fixed position)

Job Shop Job Shop (process oriented)(process oriented)

ExamplesExamples

Ingall Ship BuildingIngall Ship Building Corp. Corp.

Trump PlazaTrump Plaza

Pittsburgh AirportPittsburgh Airport

Arnold Palmer HospitalArnold Palmer Hospital

Hard Rock CaféHard Rock Café

Olive GardenOlive Garden


Move material to the Move material to the limited storage areas limited storage areas around the sitearound the site

Manage varied material Manage varied material flow for each productflow for each product




Table 9.1Table 9.1

Work Cells Work Cells (product families)(product families)

Repetitive/ Continuous Repetitive/ Continuous (product oriented)(product oriented)

ExamplesExamples

Hallmark CardsHallmark Cards

Wheeled CoachWheeled Coach

Standard AeroStandard Aero

Sony’s TV assemblySony’s TV assembly line line

Toyota ScionToyota Scion


Identify a product family, Identify a product family, build teams, cross train build teams, cross train team membersteam members

Equalize the task time at Equalize the task time at each workstationeach workstation

Documents

Departament d’Economia de l’Empresa Department of Business