MBA- I Sem II

204 (GC-UL) Operations and Supply Chain Management Unit II

204 (GC-UL) Operations and Supply Chain Management

Unit No. 2

Operations Processes
Contents of Unit

1. Process Characteristics in Operations – Volume Variety & flow, Types of

Processes – Continuous & Intermittent
2. Process Product Matrix – Job, Batch, Assembly line & continuous flow, Process &
Product layout
3.

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Service System Design matrix – Design of service systems, service blueprinting

Process Definition & Characteristics

Process:
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A series of steps involving activities, constraints, and resources that produce an
intended output of some kind

Volume: Quantity of products produced in a manufacturing system.

e.g. 5,000 bikes per year

10,000 Mega Watt of electricity

20,000 Tonne of steel

Variety: Number of subcategories of products of each product produced in a manufacturing

system.

e.g. Toothpaste (gel, mint, salt,… etc)

Mobile phones (smart, 3g, 4g…etc)
MSRTC (Parivartan, shivshahi, sheetal, shivneri, sleeper, Ac, non-AC,…etc)
Trains (Express, Shatabdi, Janshatabdi, Duranto, passenger...etc)
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204 (GC-UL) Operations and Supply Chain Management Unit II

Air travel (domestic, international, executive class, economy class, chartered)

Flow: Sequence of activities to be performed for converting inputs into outputs.

(raw material procurement, converting raw material into semi finished and then to
finished goods, delivery, supply chain.)

Resources consumption: Resources consumed for converting inputs into outputs.

(Material, men, machine hours, electricity, water, … etc)

Cycle time: time required to convert raw material to delivery to end user (consumer).

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Effectiveness – Cost, quality, time

Types of Processes (Production)

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Intermittent Process (production)

In a Intermittent Process also called as discrete process, the output of the process appears
one-by-one or in discrete quantities. The products are produced in lots based on common raw
materials and production history.
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204 (GC-UL) Operations and Supply Chain Management Unit II

In a discrete process, a specified quantity of products moves as a unit or group of parts

between workstations.

 Intermittent: Something that starts (initiates) and stops (halts) at irregular

(unfixed) intervals
 Intermittent flow of Raw material and product as well.
 Small volume of production
 Large variety of products are produced
 Customized as per customer design and demand

a) Project production,
b) Job production,
c) Batch production
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Types of Intermittent production system are

In project production- single project is assigned. Components, raw material, skill workers,
specific technology is used. In future these components may or may not be used. Project
production requires special purpose machinery. When new project starts then depending on
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nature of project all components may change. Also in project production no. of produced
quantity is only one. Usually production time is very high for project. E.g. Construction of Power
plant, Dam,…

In Job production; product is produced as per customer design and ordered quantity. As
customer changes design and quantity changes. The volume of production is very small. Here
general purpose machineries are used. Sequence of operation changes as per design. Production
time for Job is small or in comparison with Project and batch production. Example- Goldsmith,
Tailor, fabrication.

In Batch production A batch is defined as:

 The material that is produced by a single execution of a batch process, or

 an entity that represents the production of a single material at any point of time
in the process.
 The term ‘batch’ means both the material produced by and during the process,
and also an entity that represents the production of that material.
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204 (GC-UL) Operations and Supply Chain Management Unit II

 The term ‘batch’ can be considered a shortcut for “the production of a batch”.

Economic and technical factors could suggest that batch processes in some cases are
more favorable than continuous processes:

 Simple processing units like mixers and stirrers versus complex production systems.
 Multipurpose units which may be used for several processing phases of the batch
and could support multi-product manufacturing within the facility.
 Batch manufacturing plants are comparatively more robust than a continuous plant.
 Batch process manufacturing facility is easier to scale up depending on market
demand and requirements.
 Better control of process of a confined step.

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Continuous Process:

In a continuous process, as suggested by the name, the flow of material or product is

continuous.

Processing the materials in different equipment produces the products. Each machine
operates in a single steady state and performs a specific processing function. Some
examples of continuous processes are pasta production, tomato sauce and juice
production, ice cream production, Sugar production, etc .
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204 (GC-UL) Operations and Supply Chain Management Unit II

‘Continuous transformation of mass, energy and momentum.’

The target is a product which is uniform in time. The process is stopped only for
maintenance (scheduled or not), cleaning, irregular working.

 Production flow continuous

 Large volume

 Small variety

 Standardized products

 Mass & Process production

 Example:- Cement, Sugar factory


quality.
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Continuous processes have the following advantages over a batch process:

Production of a narrow specification product, i.e., higher and consistent product

Reduced manufacturing cost.

Improved asset utilization.
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 Reduced waste.
MBA- I Sem II
204 (GC-UL) Operations and Supply Chain Management Unit II

Product-Process Matrix
Product structure & Product Life cycle stage

Low volm, Low Multiple Few major High volm - high

standardisation, products, products, standardisation,
Process Structure & Process Life Cycle

one of a kind low volm Higher volm commodities

1. Jumbled Commercial
flow (job shop) Printer
Stage

[Link] Heavy
Line Flow Equipment

3. Connected
Line Flow

4. Continuous
Flow al Automobile
assembly

Sugar Factory
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Intermittent Production Types
Project Production
 Complex sets of activities performed in particular order within given period and
estimated expenditures
 Example – Shipyard, Aircraft building, roads, building, dam etc.
Characteristics of Project Production
 Definite beginning & end
 Non uniform resources requirements.
 Involvement of various agencies.
 Fixed position layout
 High cost overrun
 Problem related to Manpower
 Scheduling & control – PERT, CPM
Benefits:-
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204 (GC-UL) Operations and Supply Chain Management Unit II

 Useful in production of huge, complex products

Demerits:-
 Fixed position layout, hence no flexibility
 Requires high skills and technology

Job Production Method

 Manufacture of one or few numbers of a single product designed & manufactured
strictly to customers specifications, within given period and price fixed before
contract
 Examples:- Special purpose machine tools, Jig & fixture manufacturing, Readymade


Tailoring shops etc.
Characteristics
Small production run
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Discontinuous flow of material
Prolong manufacturing time
General purpose machines and process layout
Highly skilled labour
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 Skilled supervision
 Large WIP
Benefits:-
 Useful in customized products production.
 Useful in small lot production.
Demerits:-
 High skill required
 Long cycle time
 Costly

Batch Production
 Manufacturing of limited number of product (many different) produced at regular
intervals & stocked awaiting sales
 Examples:- Pharma, Paints, Chemicals, Electric Motor,
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204 (GC-UL) Operations and Supply Chain Management Unit II

Characteristics
 Short runs
 Skilled labour in one specific process
 Supervisor with process knowledge
 Little lower control required
 General purpose machines & process layout
 Reduced manual material handling
 Cycle time less than job & more than flow
 Large WIP
 Flexibility of production schedules
Benefits:-


 Seasonal products
Demerits:-

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Single production line for many products
Useful for small companies

Inefficiency due to stop & re use

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Flow/Continuous Production
 Manufacturing several standard products and stocked awaiting sales
 Continuous flow of production
 Special purpose machines & layout
 Low skill required
 Short cycle time
 Easy supervision
 Limited WIP
 Merits :- Continuous production, low product cost
 Demerits:- High investment, no flexibility
 Example – Automobile, televisions, domestic appliances etc
Process Production
 Continuous production of single item awaiting sales
 Example – Sugar, Steel, cement, paper etc
 Special purpose m/c self controlled
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204 (GC-UL) Operations and Supply Chain Management Unit II

 Mechanized material handling

 Low skill & higher supervision
 Almost zero flexibility
Merits –
Huge production, low prizes, onetime expenses

Demerits –
Zero flexibility, more supervision

Assembly Line



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It is used in case of dedicated plant and equipment with zero flexibility.
Assembly line is very useful in fully automatic material handling.
Process follows a predetermined sequence of operations.
Advantages
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 Product and process sequence is standardised.
 Rate of production is high with reduced cycle time.
 Due to line balancing, there is higher capacity utilisation.
Limitations
 Flexibility to accommodate and process number of products does not exist.
 High investment is required for setting the flow lines

Layout
The ‘layout’ of an operation or process means how its transforming resources are
positioned relative to each other and how its various tasks are allocated to these
transforming resources.

“Layout identically involves the allocation of space and the arrangement of equipment
in such a manner that overall costs are minimised”.
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204 (GC-UL) Operations and Supply Chain Management Unit II

Principles of Layout:
 Principle of Integration
 Principle of Minimum Distance
 Principle of Cubic Space Utilisation
 Principle of Flow

Process Layout
Separate departments are established for each specialised operation of production and
machines relating to that function are assembled there.

Advantages



Wide Flexibility

Better Quality Product

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Lower Investment in Machines

Diversity of Tasks and Variety of Jobs

Nature of Operations
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Disadvantages
 Material Handling Cost
 Wastage of Space and Capital
 Long Processing Time
 Inventory Investments
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204 (GC-UL) Operations and Supply Chain Management Unit II

 Cost of Supervision is High

Product Layout

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It is also known as line layout. It implies that various operations on a product are
performed in a sequence and the machines are placed along the product flow line.

Advantages of Product Layout:

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 Automatic Material Handling
 Smooth and Continuous Flow of Work
 Reduced Transportation Time and Cost
 Less Work-in-Process Inventory
 Less Space Occupied
Disadvantages of Product Layout
 Breakdown of Machines
 No Flexibility in Layout
 High Labour Cost
 Lack of Flexibility in Facility Modification
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204 (GC-UL) Operations and Supply Chain Management Unit II

Fixed-Position Layout
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It is also known as ‘Stationary Layout’, ‘Project Layout’ or ‘Static Product Layout’.
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Advantages of Fixed Position Layout
 Provides Flexibility in particular project
 Saving in Time
 Job Satisfaction and Skill Improvement
 Lower Labour Cost
Disadvantages of Fixed Position Layout :
 Higher Capital Investment
 Large Space Requirements
 Unsuitability

Cellular Layout
Cellular layout is also known as ‘Group Technology’ layout. A group technology
(cellular) layout groups dissimilar machines into work centres (or cells) to work on
products that have similar shapes and processing requirements.
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204 (GC-UL) Operations and Supply Chain Management Unit II

Advantages of Cellular Layout :

 Reduced Material Handling and Transit Time
 Reduced Setup Time
 Reduced Work-in-Process Inventory
 Better Use of Human Resources
Disadvantages of Cellular Layout :
 Inadequate Part Families
 Poorly Balanced Cells
 Expanded Training and Scheduling of Workers
 Increased Capital Investment

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Cellular Layout (Group Technology)

Service Design
 The design process is the transformation of an idea, needs, or wants by consumers or
the marketplace, into a product that satisfies these needs
 Service design involves
 The physical resources needed
 The goods that are purchased or consumed by the customer
 Explicit services
 Implicit services
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204 (GC-UL) Operations and Supply Chain Management Unit II

Performance Priorities in Service Design

 Treatment of the customer
 Speed and convenience of service delivery
 Price
 Variety
 Quality of the tangible goods
 Unique skills that constitute the service offering
Phases in Service Design
 Conceptualize
 Identify service package components
 Determine performance specifications
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Translate performance specifications into design specifications
Translate design specifications into delivery specifications
The Service Design Process
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Three Contrasting Service Designs

 The production line approach (ex. McDonald’s)
 The self-service approach (ex. automatic teller machines)
 The personal attention approach (ex. Ritz-Carlton Hotel Company)
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204 (GC-UL) Operations and Supply Chain Management Unit II

Service Systems
 Service systems range from those with little or no customer contact to very high
degree of customer contact such as:
 Insulated technical core (software development)
 Production line (automatic car wash)
 Personalized service (hair cut, medical service)
 Consumer participation (diet program)
 Self service (supermarket)

Service-System Design Matrix

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Factors of Service System Design Matrix
1. Degree of Contact/ Service Delivery Options
2. Opportunity for Sales
3. Production Efficiency
Service Blueprinting
 A method used in service design to describe and analyze a proposed service
 A useful tool for conceptualizing a service delivery system
Major Steps in Service Blueprinting
1. Establish boundaries
2. Identify sequence of customer interaction
3. Prepare a flowchart
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204 (GC-UL) Operations and Supply Chain Management Unit II

4. Develop time estimates

5. Identify potential failure points
6. Determine which factors can influence profitability
Service Blueprint for a Hotel Room Stay

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Important Questions
 Explain the service system design matrix in detail.
 What are operations processes? Explain the process characteristics of operations in
detail.
 Explain the process product matrix.
 What is mean by process flow structure? Explain the types and selection of process
structure.
MBA- I Sem II
204 (GC-UL) Operations and Supply Chain Management Unit II

Short Notes –
 Volume, Variety & Flow
 Assembly line
Application based questions
 Compare and contrast Continuous and Intermittent processes.
 A canteen owner wants to expand his business & establish a restaurant. As a service
blueprint expert, design a blueprint of restaurant for him.
 What are various process types? Which type of manufacturing process will you use
for following products – Bridge, Medicines, Fan, Package drinking water, Few tools,
Four wheeler, Dam construction, Sugar manufacturing, Glass mfg., Holiday tour
 “As the variety of products increases, the volume decreases.” Do you agree? Taking

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Product-Process matrix as a tool proves it.
Do you think that service design process is different than product process design? If
yes, How?
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