PROCESS STRATEGY

Operations Management
Chapter 7

Al-Hassan Aladdin Mortada

Elham Adeeb
Rochester Manufacturing ’s
Process Decision
•Rochester Manufacturing Corporation (RMC) is considering moving
some of its production from traditional numerically controlled
machines to a flexible manufacturing system (FMS).

•Machine utilization, as near as it can determine, is hovering

around 10%

•They believe that a $3 million expenditure on machinery and the

transfer machines will handle about 30% of RMC’s work

Process Strategy 2
Rochester Manufacturing ’s
Process Decision
The firm has not yet entered all its parts into a comprehensive group technology
system, but believes that the 30% is a good estimate of products suitable for the
FMS. This 30% should fit very nicely into a “family.”
•Reductions:
▪ Machines: from 15 to 4
▪ Personnel: from 15 to 3
▪ Space: from 20,000 ft to 6000ft
▪ Throughput: from 7-10 days to 1-2 days.
•Financial Figures:
▪ One time savings $750,000
▪ Annual labor savings $300,000

Process Strategy 3
Rochester Manufacturing ’s
Process Decision
•Analysis of the project’s return on investment showed it to be
between 10% and 15% per year. The company has traditionally
had an expectation that projects should yield well over 15% and
have payback periods of substantially less than 5 years

Process Strategy 4
Rochester Manufacturing ’s
Process Decision
1.As a production manager for RMC, what do you recommend?
Why?
As a production manager, I would recommend the transformation from
traditional CNC to FM as it will improve the manufacturing process by
reducing number of machines, labor and space Also, it will decrease the
throughput time from 7-10 days to 1-2 days which will increase the capacity
and the flexibility.

Process Strategy 5
Rochester Manufacturing ’s
Process Decision
2.Prepare a case by a conservative plant manager for
maintaining the status quo until the returns are more obvious.
The decision would be based on several assumptions that may vary, in
addition the company standard is the ROI of the project should be 15% and
the payback should be in 5 years, the estimated ROI is 10-15% so 15% is not
guaranteed and by calculations the payback would be after 7.5 years not 5
years. So, the project is not meeting the company’s standard, and could
wait until we have better returns

Process Strategy 6
Rochester Manufacturing ’s
Process Decision
3. Prepare the case for an optimistic sales manager that you
should move ahead with the FMS now.
Increasing capacity and utilization would allow the company to process
more customer orders, so sales volume could be increased with a good
marketing plan, hence the company could generate more revenues and
the cost per unit would be decreased, that would be an extra saving that
might be added to the project savings to increase the ROI and reduce the
payback period to meet the company standard.

Process Strategy 7
Rochester Manufacturing ’s
Process Decision
3. Prepare the case for an optimistic sales manager that you
should move ahead with the FMS now.
If order throughput time is currently 8 days on average , company
could produce about 15 order per month assuming 22 working
days.
If the throughput time decreased to 1.5 on average ,company
could produce about 22 order so revenue would increase by 46%
assuming same price for all orders.

Process Strategy 8
Process Strategy at Wheeled Coach
• Wheeled Coach, based in Winter Park, Florida, is the world’s largest
manufacturer of ambulances.
• Within the focused factory, Wheeled Coach established work cells for
every major module feeding an assembly line, including aluminum bodies,
electrical wiring harnesses, interior cabinets, windows, painting, and
upholstery.

• During the first day, electrical wiring is installed; on the second day, the
unit moves forward to the station at which cabinetry is delivered and
installed, then to a window and lighting station, on to upholstery, to fit and
finish, to further customizing and finally to inspection and road testing

Process Strategy 9
Process Strategy at Wheeled Coach

1. Why do you think major auto manufacturers do not build

ambulances?
Major auto manufacturing depends on repetitive process strategy which is
medium variety medium volume model while ambulance manufacturing
needs customized manufacturing because almost every vehicle is unique
that’s why wheeled Coach support its assembly line with work cells and their
rate still 20 vehicle per week which would not be cost effective for major
auto manufacturers who might produce a number hire than that per day.

Process Strategy 10
Process Strategy at Wheeled Coach

2. What is an alternative process strategy to the assembly line

that Wheeled Coach currently uses?
Wheeled coach may use mass customization strategy by standardizing the
modules and produce it then build the vehicles to order.

Process Strategy 11
Process Strategy at Wheeled Coach

3. Why is it more efficient for the work cells to prepare “modules” and
deliver them to the assembly line than it would be to produce the
component (e.g., interior upholstery) on the line?
work cells give them the flexibility in manufacturing to be able to produce
customized products for their customers through a highly skilled people
working in the work cells and lesser skilled people working in the
assembly line process. It speeds up the length of time needed to produce
the vehicle because, on the assembly line the standard production
processes is done and all the customization is limited to the work cells
then moved to the assembly line.

Process Strategy 12
Process Strategy at Wheeled Coach

4. How does Wheeled Coach manage the tasks to be performed

at each work station?
• Labor standards drive the schedule so that every work cell feeds
the assembly line on schedule, just-in-time for installations.

• The chassis, usually that of a Ford truck, moves to a station at which

the aluminum body is mounted.

• Then the vehicle is moved to painting. Following a custom paint job, it

moves to the assembly line, where it will spend 7 days.
Process Strategy 13
Process Strategy at Wheeled Coach

4. How does Wheeled Coach manage the tasks to be performed

at each work station?
• During each of these 7 workdays, each work cell delivers its respective
module to the appropriate position on the assembly line.

• During the first day, electrical wiring is installed; on the second day, the
unit moves forward to the station at which cabinetry is delivered and
installed, then to a window and lighting station, on to upholstery, to fit
and finish, to further customizing, and finally to inspection and road
testing
Process Strategy 14
Process Analysis at Arnold Palmer
Hospital
Arnold palmer hospital is one of the largest hospital for the medical
treatment of women and children in the U.S, with 431 beds , with 2000
employees, Arnold palmer hospital has diverse group of patients that has to
be process focused and must be enrooted to its specialized department
where patient can be treated according to their needs.

Process Strategy 15
Process Analysis at Arnold Palmer
Hospital
Question 1: As Diane’s new assistant, you need to flowchart this process.
Explain how the process might be improved once you have completed the
chart. ?

Process Strategy 16
 Enter APH
Labor & birth
Delivery
Check-in Desk
Yes With
L&D complications mother/ baby
Yes baby
Birth is Registered No
imminent at bedside
sent
To
No mother
mother
baby NICU
Mother care unit

Pre-registered
Take to Yes Operation
No l&D room
triage
for /ICU unit Nursery
assessme
nt

Registration discharge
Send home or
office Active No walks till
labor ? ready
Process Analysis at Arnold Palmer
Hospital
Question 2: If a mother is scheduled for a Caesarean-section birth (i.e., the
baby is removed from the womb surgically), how would this flowchart
change?

Process Strategy 18
 APH
L&D birth
Check-in Desk
Yes With
L&D complications mother/ baby
Yes baby
Birth is Registered No
imminen
t
at bedside
Yes sent
To
No mother mother
baby NICU
care unit
Mother Scheduled
For caesarian
Pre-registered section

Take to Yes Operation

No l&D No room
triage
for /ICU unit Nursery
assessme
nt

Registration discharge
Send home or
office Active No walks till
labor ? ready
Process Analysis at Arnold Palmer
Hospital
Question 3: If all mothers were electronically (or manually) preregistered,
how would the flowchart change? Redraw the chart to show your changes.
?

Process Strategy 20
 APH
L&D birth
Check-in Desk
Yes With
mother/ baby
Yes complicatio baby
Birth is ns
imminen admitted
t bedside No

No sent
To
mother
mother NICU
Mother baby
care unit
Pre-registered
Operation
Yes Scheduled
Take to For caesarian section room
l&D
triage /ICU unit Nursery
for
assessme
nt

Send home or
discharge
Active No
walks till
labor ? ready
Process Analysis at Arnold Palmer
Hospital
Question 4: Describe in detail a process that the hospital could analyze,
besides the ones mentioned in this case.

a) Arnold Palmer Hospital is categorized under process focus strategy

such facilities are process focused in term of equipment, layout and
supervision.

b) Facilities such as APH requires variety of activities and faces constant

changes because of the nature of its operations.

Process Strategy 22
THANK YOU

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