OPERATIONS PROCESS

Operation Process
 Understanding any operation systems invariably begins with an
understanding of the processes that are integral to the operation systems.
 A process is the basic building block of operations.
 It consists of set of activities that need to be performed by consuming
some resources and time.
 This eventually determines the operation systems in terms of cost, time,
productivity, profit etc.
 Designing processes is an important and early step in operation
management.
 The design of processes essentially consists of various choices that we
make with respect to the flow of products in a operation system.
 Operation Process
Operation Management:
 Operation management principles are broadly divided into two;

1. those pertaining to design and

2. others pertaining to operational control
 Design issues focus on the configuration aspects of an operating system. This
includes, for e.g.
 Product development
 Choice of technologies & processes for manufacturing
 Overall capacity that needs to be built into the system
 Type and number of resources to have
 Layout of machines
 Overall strategy and policy for quality
 Cost and operational procedures
Operation Process
 On the other hand, operational control issues focus on
how existing operating system could be put to the best
use and how several short-term requirements placed
on the system could be addressed most efficiently.
The tasks performed include
 Forecasting demands
 Production planning & scheduling
 Quality control
 Maintenance management
 Supply chain management.
Process Characteristics in Operations

 Before understanding various processes choices

available, it is important to know the various
characteristics that influence the choice of
alternative processes. There are 3 important aspects
that have significant influence are;
 Volume
 Variety and
 Flow
Volume
 Volume indicates the average quantity of the products produced in a
manufacturing system. In reality, there are examples of firms that differ
on this from one end of the spectrum to the other. Turnkey project
management firms such as L&T will typically have a production volume
just one. At the other extreme, there are several firms catering to the
consumer non-durable and FMCG sector having high volume of
production necessitating continuous production. Many chemical process
industries also belong to this category. In between the two extremes we
have mid-volume manufacturers, who may cater to their customers with
several alternative versions of products. There are numerous examples
of mid-volume manufacturing in consumer durables, white goods and
several industrial products. TATA MOTORS, for instance, manufactures
several types of vehicle that belong to the mid-volume category.
Variety
 Variety refers to the number of alternative products and varieties of each
product that are produced in a manufacturing system.
 Example Titan Industries Ltd.- 40,000 varieties of watches.
 These varieties stem not only from alternative product lines but also
variants in each product line.
 TATA MOTOR’S- Tata Indica- several varieties- petrol & diesel.
 It is easy to visualize that increase in the variety of product offerings is
likely to introduce variety in processes in the system.
 Alternative production resources, materials, skill of workers and increase
in number of stages of production will become inevitable and it may call
for better operations management practices.
 Planning and scheduling can become more complex on account of these
added choices in the operating system.
Flow
 Irrespective of the nature of the activities involved, all manufacturing
systems require certain input material with which the process begin.
The material undergoes a conversion process in order to transformed
into a useful products for customers.
 Flow indicates nature and intensity of this phenomenon and provide an
understanding of how the components and material in an operating
system get transformed from the raw material stage to the finished good
stage.
 Knowledge of flow provides vital clues to the operation manager about
production planning and control issues that need to be addressed.
 It also provides useful information about the complexities of operations
management in an operating system.
Relationship between volume & variety in
operations systems

High Volume Mid-volume High Variety

Low-variety Mid-variety Low-volume

Mass Production
Project organizations
Petrochemicals
Motor manufacturing Power plants
Automobiles
Pharmaceuticals Aircrafts
FMCG
Consumer durables Bridges & large
Consumer non-
constructions
durables
Relationship between volume & variety in
operations systems

 The three characteristics Volume, variety, and Flow are linked to one
another.
 In general, volume and variety will have an inverse relationship. When
the volume of production is very high, the firm is likely to be engage in
the manufacture of fewer varieties of products.
 On the contrary, the firms caters to the wide range of products &
services, then the production volume of each of these variations is likely
to be very low.
 Furthermore, volume and variety influence the flow patterns in
production system. Therefore, process design choices available to an
operation manager could be understood by analyzing alternative flow
patterns.
What is a Production System?
 Production System are those activities of an organization where
 resources flowing within a defined system are combined and
transformed in a controlled manner to add value in accordance to
the policies communicated by the management.
 Characteristics of a Production System: 
 Production is an organized activity,
 so every production system has an objective.
 The system transforms various inputs to useful outputs.
 It does not operate in isolation from other organizational systems.
 There exists a feedback about the activities,
 which is essential to control and improve system performance.
Types of Production Processes
 Production processes or manufacturing operations may broadly be divided
into two categories.
 Made to stock (MTS) production process
 These firms make items that are completed and placed in stock before customer
order is received.
 Made to order (MTO) production process
 These complete the end item only after receiving a customer order .
 This is because manufacturer cannot anticipate what each customer wants.
 There is yet another type of production process.
 The third type of production process is one where, The company produces
standard modules and assembles these modules according to the specifications of
a customer order.
 This type of production process is Assemble-to-Order (ATO) production process.
Types of Processes
 Process selection is based on five considerations
 Type of process; range from intermittent to continuous
 Degree of vertical integration
 Flexibility of resources
 Degree of customer contact
Types of Processes
 The types of production processes / systems are classified on the
basis of Product / Output Variety and Product / Operations / Output
Volume
 Another way to define the type of production process is based on the
extent to which a factory has the flexibility to produce a variety of
products.
 Three types of Flows exists in operating systems
1. Continuous
2. Intermittent
Types of Production/ process System

Production system

Intermittent Flow -production Continuous Flow Production

Job/ shop Mass Production Processes

Project Production
Production Flows Production Flow
Continuum of Process Types
Continuous Flow System
 A continuous flow system is characterized by a streamline flow of
products in the operating system. Typically in such systems, conversion
process begins with input of raw material at one end. It progresses
through the system in an orderly fashion to finally become finished goods
at the final stage.
 The production process is sequential and the required resources are
organized in stages.
 Capable of producing one (or a few) standardized designs in very high
volumes
 For e.g. petrochemicals, pharmaceuticals, cement, glass chemical
synthesis ,Some food manufacturing (chocolate, beer), water
processing , energy generation, information technology etc..
Mass Production Process
 When is it used:
 Standardization of product and process sequence
 Dedicated special purpose machines having high production
capacities and output rates
 Large volume of products
 Shorter cycle time
 Lower in process inventory
 Balanced production lines
 Material and parts flow is continuous without back-tracking
 Production planning and control is easy
 Material handling can be completely automatic
Mass Production Process
 Advantage:
 Higher rate of production with reduced cycle time.
 Higher capacity utilization due to line balancing
 Less skilled operators are required.
 Low process inventory
 Manufacturing cost per unit is low.
 Limitations
 Break-down of one machine may stop entire production line.
 Line layout needs major changes with changes in product
design.
 Higher investment in production facilities.
Intermittent Flow system
 Not all manufacturing firms have the benefit of high volume and low variety that
a mass production system has. As customer preferences increase, the need
for creating more variety also increases and firm respond this requirement by
expanding the product line with wider varieties. When variety increases, the
volume of production for each variation will be less compared to a mass
production system. Therefore dedication of manufacturing resources for each
variation may not be a feasible option. Manufacturing resources will be shared
by a group of products. Since each product may have different processing
requirements and sequence of operations, the flow will become complicated.
 Intermittent flow systems are characterized by mid-volume, mid-variety
product/ services.
 Capable of producing a large variety of product designs in relatively low
volumes
Intermittent Flow system
 Discrete and process industries have alternative ways by which
they can address the flow complexities arising out of a mid-
volume, mid-variety scenario. In the case of process industries,
one way to minimize this flow complexity is to operate the
system in batches. In one batch, one set of variation is
manufactured and in the next batch, another set of variation is
manufactured. In between these two batches, necessary set-up
and changeover of resources are made to facilitate smooth
production and maximum productivity. Such an arrangement
results in facilitation of intermittent flow system.
Intermitted Production Process
 In this type of production process
 The volume of each product is low.
 Generally produces make-to-order,
 custom products in accordance with design supplied by the
customer.
 Each job may be unique and may require a special set of
production steps.
 Further, each job may require a particular routing.
 There are no standard routings.
 Products may follow different paths.
 Needs general-purpose production equipment
Batch Manufacturing
 Many manufacturing operations fall between job shops and repetitive
manufacturing. These are called batch manufacturing. Batch means a
single production run. Batch size means the quantity produced in a single
production run. It may be less than 100 units OR up to a few 1000 units.
 The batch manufacturing company makes a batch of one product, then
may switch over (set up) the equipment and make a batch of another item.
Production equipment should be more flexible than repetitive
manufacturing and it is generally less flexible than job shops.
  Here, products having same or similar processes may be grouped into a
product family .
 Examples are small hand tools (e.g., drill, screw driver), and hand mixers.
Batch Production Process
 When is it used:
 There is a shorter production run
 Plant and machinery are flexible
 Every batch of production requires changes in the plant and
machinery set-up.
 Limitations:
 Material handling is complex
 Production planning & control is complex
 High set-up cost due to frequent changes in set ups.
 WIP inventory is higher than continuous production process.
Batch Production Process
 Advantages:
 Lower manufacturing lead time and cost as compared
to job order production process.
 Better utilization of plant and machinery
 Promotes functional specialization
 Lower investment in plant and machinery
 Flexibility to accommodate and process number of
products
 Job Satisfaction to operators.
Differences between Intermittent and Continuous
Operations

Decision Intermittent Continuous

Product Variety Large Small
Degree of Standardization Low High
Path through Facility Varied pattern Line Flow
Critical Resource Labor Equipment
Importance of Work Skills High Low
Type of Equipment General Purpose Specialized
Degree of Automation Low High
Throughput Time Longer Shorter
Work-in-Process Inventory More Less
Project organizations
 A project is a highly flexible and low volume type operation.
 Usually the item to be produced stays in a fixed place and all the
resources come to it.
 At the end of production, resources leave the place.
 Examples are ship construction, bridge construction, buildings and
large machines.
 Some types of service operations may also be called as Projects.
 These involve a team of people over a period of time and then the
people leave the project.
 Example: Developing a software package may be a project type of
service operation.
Job Shop Production Process
 Job shop production process are used in woodworking shops, metal
fabrication shops, etc. May require an inventory of a few type of the raw
materials. BUT, here the largest percentage of the inventory is Work in
Process (WIP). Work in Process is the inventory that accumulates in
between process stages.
 When is it used:
 High variety of products with low volume
 Use of general purpose machines and facilities
 Highly Skilled Operators who take up each job as a challenge
 Large inventory of materials, tools and parts
 Detailed planning is essential for sequencing of each product
 Capacities for each work centers and order priority
Job Shop Production Process
 Advantages:
 A large variety of products can be produced with the general
purpose machines
 Operators become more skilled and competent with each job
 Full potential of operators can be utilized
 Opportunity exists for creative methods and innovative ideas.
 Limitations:
 Production planning is complicated Larger space
requirement.
Product-Process Matrix
 So far we have discussed the various aspects of
alternative processes choices that an operation
manager has and the relationship between
processes choices and flow pattern in
manufacturing system.
 The culmination (conclusion) of all these ideas is
process-product matrix.
 Compact form of product- process matrix is shown
in Fig.-A
 Fig.-A Product-Process Matrix
VERY LOW VOLUMES PRODUCT STRUCTURE VERY HIGH VOLUMES

PROCESS LOW STANDARDIZATION LOW VOLUMES HIGH VOLUMES HIGH STANDARDIZATION

STRUCTURE One-of-a-kind Products Many Products Few Products Commodity Products

JUMBLED FLOW
(Job Shop)

DISCONNECTED LINE FLOW

(Batch Flow)

CONNECTED LINE FLOW

(Machine or Worker paced)

CONTINUOUS FLOW
 Product-Process Matrix
Few High These
Low Multiple Major Volume, Theseare
are
the
themajor
major
Volume, Products, Products, High
stages
stagesof
of
One of a Low Higher Standard- product
productand
and
Kind Volume Volume ization process life
process life
I. cycles
cycles
Job Commercial
Printer
Shop
French Restaurant
Flexibility (High)
II. Unit Cost (High)
Batch Heavy
Equipment
III.
Assembly Automobile
Line Assembly
Burger King
IV. Flexibility (Low)
Sugar
Continuous Unit Cost (Low)
Refinery
Flow
Product-Process Matrix
 One dimension of matrix shows the product characteristics
and the other the process characteristics.
 Product characteristics essentially indicates the level of
customization and volume of production.
 On the other hand, process characteristics indicates the
complexity and divergence in the process.
 When organization have a high volume of production, the flow
can not be jumbled. Instead, it will be streamlined.
 Similarly, when the variety is high, the flow can not be
continuous.
Process and Product Layout
 Layout planning in manufacturing and service
organization deals with the physical arrangement of
various resources that are available in the system with an
objective to improve the performance of the operating
system, thereby providing better customer service.
 Layout planning provides a set of tools and techniques
that helps an operation manager to decide where to
locate the resources and also assess the impact of the
alternative choices that he/she have for locating the
resources.
Process and Product Layout
 A good layout design will ensure that a vast majority jobs in a manufacturing
system may have to travel shorter distance before completing their processing
requirements.
 Similarly, in the case of service organizations, customers may have to walk shorter
distance and spend less time in the system to complete their service requirements.
 This ensures that the costs and the lead time of the processes come down.
 The most significant and visible effect is the time taken to complete the process.
 Addressing the layout planning problem begins with a good understanding of the
key factors that influence layout designs.
 The nature of issues to be tackled and the manner in which these issues could be
addressed vary from one type of organization to the other.
 The relationship between volume-variety-flow provides crucial inputs to the layout
problem.
 Volume-variety-Flow implications for layout
planning

Variety
Very low-variety Medium High Variety One-off
Variety Execution
Flow attributes Streamline Flow Multiple flow Disorganized Jumbled Flow
paths flow
Volume High Volume Mid-volume Low Volume One Piece
attributes
Examples of Process industries Batch Job Shops, Project shops
Operating Mass products/ manufacturing Customized
System service provider firms product/ service
provider
Types of Line Layout, Group Process Layout Fixed position
Layout used Product Layout technology layout
layout
Process Layout
 A process layout is an arrangement of resources on the
basis of the process characteristics of the resources
available.
 Grouping together of machines and/or workers doing
similar tasks.
 Applicable to both manufacturing and non manufacturing
operations.
 It is also called as functional layout.
Process Layout
Process Layout
 Advantages:
 Flexibility: equipment and personnel can be used where they are needed.
 Smaller investment in equipment: duplication is not necessary unless volume is large.
 Expertise: supervisors for each department become highly. knowledgeable about their functions
 Diversity of tasks: changing work assignments make work more satisfying for people who prefer
variety.
 Disadvantages:
 Lack of process efficiency: backtracking and long movements may occur in the handling of
materials.
 Lack of efficiency in timing: workers must wait between tasks.
 Complication of production planning and control.
 Cost: workers must have broad skills and must be paid higher wages than assembly line
workers.
 Lowered productivity: because each job is different it requires different setups and operator
training.
Product Layout
 In a product layout, the resources are placed to
follow exactly the visitation sequence dictated by a
product.
 Applicable to both manufacturing and non
manufacturing operations.
 Arrange machines and/or workers in accordance

with the sequence of operations for a given product

or service.
 It is also called as Line-layout.
 Product layout
Raw matl. Fabrication
Rec- storage line-part B
eiving Fabrication Planer
line-part A
Finished Drill Lathe Small number of
goods storage Mill high volume
Mill
products
Drill
Grinder
Mill

Assembly line Automatic

Product Layout
 Advantages of Product/ flow-line layout
 Reduces materials handling.
 Accommodates small amounts of work in process.
 Reduces transit times.
 Simplifies production planning and control systems.
 Simplifies tasks, enabling unskilled workers to learn task quickly.
 Disadvantages of flow-line layout
 Lack of process flexibility.
 Lack of flexibility in timing: the product can not flow through the line faster than the slowest
task can be accomplished unless that task is performed at several stations.
 Large investments: special-purpose equipment and duplication is required to offset lack of
flexibility in timing.
 Dependence of the whole on each part: a breakdown of one machine or absence of
enough operators to staff all work stations may stop the entire line.
 Worker fatigue: workers may become bored by the endless repetition of simple tasks
Fixed Position Layout
 There are several situations in which the product
manufactured is very bulky, difficult to move and often
made in quantities of one. In such situations, the layout
design ought to be very different.
 Building very large machine tools & equipments, ship,
aircrafts and preventive & breakdown maintenance
such large systems.
 Fixed position layouts are typically employed in large
project type organizations.
 E.g. BHEL, HAL, ISRO
Design of Service System
 Designing operations system typically involves making choices with respect to
the;
 Location
 Technology
 Capacity
 Layout of the system
 These decisions directly influence other aspects of the operations, such as
people and skills to be deployed and planning methodology to be put in place.
 However designing a service system is vastly different from designing of the
manufacturing system.
 In manufacturing system, the customer is seldom part of the process but incase
of service system customer participation in the conversion process inevitable.
Customer Contact
 Degree of customer Contact
 Low degree of customer contact-quassi manufacturing
 Medium degree of customer contact- Mixed services
 High Degree of customer contact- Pure services
Service System Design Matrix
 The Service-System Design Matrix is a useful tool for understanding
the different elements of a service system. 
 The matrix establishes the relationship between three key factors
of service and how these factors relate to service production and
delivery.
 The first factor is the degree of contact between the consumer and the
service provider;
 the second factor is the opportunity for sales (the greater the amount of
contact; the greater the sales opportunity);
 the third factor of the system is production efficiency (services that require
a large amount of customization and customer input have lower
efficiency).
Service System Design Matrix
 The service system design matrix defines the
relationship between sales opportunity (factor two) and
production efficiency (factor three) measured against the
amount of human interactivity (factor one).
 It categorizes six main types of service delivery systems from
simple mail contact through to face-to-face total customization. 
 The matrix is useful as it reveals many of the variables and
constraints of a particular service system. It can be used to
pinpoint the particular focus on an operation or it can assist in
the assessment of the needs of workers within the system.
Service System Design Matrix
 In reality service design managers can use many theoretical and
methodological approaches and the service system design matrix
is just one of a multitude of theoretical systems used to
accurately design systems in order for them to remain competitive
and to continue to attract customers.
 They go through these rigorous processes so that their business
can gain competitive advantages and conquer new markets.
 Companies that can identify the interests of their customers are
able to open up new and hopefully profitable prospects as long as
they cultivate service offerings that create better and more
pleasant experiences for the customer. 
Service-Process Matrix
Service Blueprinting
 The service blueprint is a technique used for
service innovation.
 The technique was first described by Lynn

Shostack, a bank executive, in the Harvard

Business Review in 1984.
 The blueprint shows processes within the company, divided
into different components.
 Service Blue-printing is a method by which the service
delivery process is broken down into individual elements
through a step-by-step mapping of the process.
Service Blueprinting
 Service-Blueprinting is a service planning help tool. It can be used for
developing new innovative services as well as for improving existing services.
The method is also appropriate for ensuring the quality of service processes. It
can also be used for new employee training or for showing clients a service
cycle overview.
 The Service-Blueprinting output consists of a graphically-presented overview of
the service process and its activities.
 Service-Blueprinting allows for visualization of the service development process
in its early stages. In each process step, contact points between client and firm
(and physical element, if a tangible service) become visible.
 It is possible to identify failure points and discover areas for innovation as well.
This technique eases the identification of cost saving potentials and offers an
excellent base for further Service-process management