CHAPTER 5

PROCESS
SELECTION,
DESIGN, AND
ANALYSIS
PRESENTED BY: GROUP 3
LEARNING OBJECTIVES
LO1. Describe the four types of processes used to produce goods and

services.

LO2. Explain the logic and use of the product-process matrix.

LO3. Explain the logic and use of the service-positioning matrix.

LO4. Describe how to apply process and value stream mapping for process

design.

LO5. Explain how to improve process designs and analyze process maps.

LO6. Describe how to compute resource utilization and apply Little's Law.
 TYPES OF GOODS AND SERVICES
Custom or make-to-order
Produced and delivered as one of a kind or in small quantities
Designed to meet specific customers’ specifications

Option or assemble-to-order
Configurations of standard parts, subassemblies, or services that
can be selected by customers from a limited set
Standard or make-to-stock
Made according to a fixed design that leaves the customers with no
options to choose from
TYPES OF GOODS AND SERVICES PRODUCING
PROCESSES

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

Job shop processes

Organized around particular types of general-purpose
equipment that are flexible and capable of customizing work
for individual customers
TYPES OF GOODS AND SERVICES PRODUCING
PROCESSES

Flow shop processes

Organized around a fixed sequence of activities and process
steps to produce a limited a variety of similar good or services
Observed in assembly lines

Continuous flow processes

Create highly standardized goods or services continuously in
very high volumes
 PRODUCT LIFE CYCLE
Characterization of product growth,
maturity, and decline over time

Depends on process design and choice

Phases
Introduction
Growth
Maturity
Decline and turnaround
PRODUCT-PROCESS MATRIX

Model that describes the alignment of process choice

with characteristics of the manufactured good

Appropriate match between the type of product and

process is achieved along the diagonal in the
product-process matrix
EXAMPLE: PRODUCT-PROCESS MATRIX
 POSITIONING STRATEGY

Consciously positioning a business off the diagonal of the

product-process matrix

Helps a company stand out from its competitors

Advanced manufacturing technologies enables

companies to produce lower volumes of products in
greater varieties at lower costs
 POSITIONING STRATEGY

Allows for mass-customization strategies and

capabilities

Helps companies achieve success even when they are

positioned off the diagonal
 PATHWAY
A unique route through a service system.
Can be customer driven or Provider Driven.

Customer-routed services
Offer customers the freedom to select pathways that are best suited
for their immediate needs and wants
Provider-routed services
Constrain customers to follow a very small number of possible and
predefined pathways through the service system
THE SERVICE-POSITIONING MATRIX

-Roughly analogous to the product-process matrix for

manufacturing

-Helps management design a service system that best meets

the technical and behavioral needs of customers

◦Superior performance results by staying along the

diagonal of the matrix
 PROCESS DESIGN
-Helps create the right combination of equipment, labor,software, work
methods, and environment to:

◦ Produce and deliver goods and services that satisfy internal and
external customer requirements

Impacts:
◦ Cost
◦ Flexibility
◦ Quality of the output
 LEVELS OF PROCESS
DESIGN
Task Activity Process Value Chain
Specific unit of Group of task Sequence of Network of
work required to created to create activities processes
create an output and deliver
intermediate or
final output
 PROCESS MAP
(FLOWCHART)

Describes the sequence of all process activities and tasks

necessary to create and deliver a desired output or outcome
 PROCESS MAP(FLOWCHART)
Process boundary:
-Beginning or end of a process that helps:
◦ Obtain management support
◦ Assign process ownership Process Map (Flowchart)
◦ Identify where performance measures should be taken
◦ Identify key interfaces with customers

Service blueprints or service maps

◦ Highlight the points of contact with the customer
◦ Depict a line of customer visibility between the back office and the front
office
 VALUE STREAM
-refers to all value-added activities involved in designing, producing, and
delivering goods and services to customers.

-A value stream map (VSM) shows the process flows in a manner

similar to an ordinary process map; the difference lies in that value
stream map highlight value-added versus non-value-added activities and
include costs associated with work activities for both value- and non-
value-added activities.
 PROCESS ANALYSIS AND IMPROVEMENT

Strategies to improve process designs focus on:

◦ Increasing revenue, agility, and product and/or service quality
◦ Decreasing costs, process flow time, and carbon footprint

Reengineering: Fundamental rethinking and radical redesign of

business processes
◦ Helps achieve improvements in critical and contemporary
measures of performance such as cost, quality, service, and
speed
 UTILIZATION

Fraction of time a workstation or individual is busy over the long run

Resources used
Utilization (U) = Resources Available

Demand rate
Utilization (U) = Service rate x Number of servers

Achieving a 100 percent utilization for a process design is difficult

 THROUGHPUT

Average number of entities completed per unit time (or output

rate) from a process
◦ Measured as parts per day, transactions per minute, or
customers per hour
 BOTTLENECK

Work activity that effectively limits the throughput of an entire

process
◦ Identifying and breaking process bottlenecks is an important
part of process design and improvement
◦ Increases the speed of a process
◦ Reduces waiting and work-in-process inventory
◦ Uses resources more efficiently
 LITTLE'S LAW

-is a simple formula that explains the relationship among flow

time (T), throughput (R), and work-in-process (WIP):

Work-in-process = Throughput X Flow time

or
WIP - R X T
THANK YOU