LESSON 9:

PROCESS
SELECTION,
DESIGN AND
ANALYSIS

CBME 1
 INTRODUCTION
• Choosing appropriate processes and designing them to work effectively
with each other is vital for an effective and efficient value chain and cannot
be taken lightly.
• Process design is an important operational decision that affects the cost of
operations, customer service, and sustainability. Companies are just
beginning to consider the environmental impact of their processes and
those of their customers.
PROCESS CHOICE DECISIONS
• Firms generally produce either in response to customer orders and
demand or in anticipation of them. This lead to three major types
of goods and services:
1. Custom
2. option-oriented
3. standard
• CUSTOM OR MADE TO ORDER

goods and services are generally produced and delivered as one of a kind or in
small quantities and are designed to meet specific customer’s specifications.
Examples include ships, internet sites, weddings, taxi service, estate plans,
buildings, and surgery. Because custom goods and services are produced on
demand, the customer must wait for them, often for a long time because the good or
service must be designed, created, and delivered.
• OPTION OR ASSEMBLE TO ORDER

goods and services are configurations of standard parts, subassemblies, or

services that can be selected by customers from limited set. Common examples are
Dell computers, subway sandwiches, machines tools, and travel agent services.
Although the customer chooses how the goods and services are configured, any
unique technical specifications or requirements cannot generally be accommodated.
• STANDARD OR MAKE TO STOCK
goods and services are made according to fixed design, and the
customer has no options from which to choose. Appliances, shoes,
sporting goods , credit cards, online web-based courses, and bus service
are some examples. Standard goods are made in anticipation of customer
demand and stocked in inventory, and therefore are usually available,
although in some cases the proper color or size might be out of stock.
F O U R P R I N C I PA L T Y P E S O F P R O C E S S E S A R E
USED TO PRODUCE GOODS AND SERVICES.

1.Projects

2.Job shop processes

3.Flow shop processes

4.Continuous flow processes

 PROJECTS
• are large –scale , customized initiatives that consist of many smaller task and activities
that must be coordinated and completed to finish on time and within the budget. Some
examples of projects are legal defense preparation, construction, and software
development.

• Projects are often used for custom goods and services, and occasionally for
standardized products such as “market homes” that are built from a standard design.
 JOB SHOP PROCESSES
• are organized around particular types of general –purpose equipment that are flexible
and capable of customizing work for individual customers. Job shops produce a wide
variety of goods and services, often in small quantities. Thus, they are often used for
custom or option type products .

• In job shops, customer orders are generally processed in batches, and different orders
may require a different sequence of processing steps and movement to different work
areas.
 FLOW SHOP PROCESSES
• are organized around a fixed sequence of activities and process steps, such as an
assembly line, to produce a limited variety of similar goods and services.

• An assembly line is a common example are produced in flow shop settings. Some
common examples are automobiles, appliances, insurance policies, checking account
statements, and hospital laboratory work.

• Flow shops tend to use highly productive, specialized equipment and computer software.
 CONTINUOUS FLOW PROCESSES
• create highly standardized goods and services, usually around the clock in
very high volumes. The sequence of work tasks is very rigid and the
processes use highly specialized, automated equipment that is often
controlled by computers with minimal human oversight.
 THE TRADITIONAL PRODUCT LIFE
CYCLE(PLC)
• cycle is a characterization of product growth, maturity, and decline over time. It is
important to understand product life cycles because when goods and services change and
mature, so must the processes and value chains that create and deliver them.
• generally consists of four phases-introduction, growth, maturity, and decline and
turnaround. A product’s life cycle has important implications in terms of process design
and choice.
• Two approaches about the relationships between product characteristics for goods and
services and process choice decisions are the product –process matrix and service
positioning matrix.
T H E P R O D U C T – P R O C E S S M AT R I X

• was first proposed by Hayes and Wheelwright. the product-process matrix is a model that describe the
alignment of process choice with the characteristics of the manufactured good.
• The most appropriate match between type of product and type of process occurs along the diagonal in the
product-process matrix. As one moves down the diagonal, the emphasis on both products and process
structure shifts from low volume and high flexibility to higher volumes and more standardization.
• If product and process characteristics are not well matched, the firm will be unable to achieve its
competitive priorities effectively.