Module 2
Factors Influencing Process Choices
1. Volume Not that imp.
Volume refers to the average quantity of products produced in a
manufacturing system.
Low-volume production is often customized, such as turnkey project
management by companies like L&T or BHEL, where processes are
flexible but less automated.
High-volume production is typical in FMCG, automobile, and chemical
processing industries, where economies of scale and automation reduce
costs.
Mid-volume production is common in consumer durables and white
goods, where processes balance efficiency and flexibility.
2. Variety
Variety indicates the number of product alternatives and variants
offered by a manufacturing system.
Higher product variety requires more flexible processes, skilled workers,
and diverse resources to adapt to customer preferences.
For example, consumer electronics firms often offer multiple models and
configurations, demanding adaptable manufacturing systems.
On the other hand, low-variety products allow for standardized
processes and higher efficiency.
3. Flow
Flow represents the nature and intensity of activities that convert raw
materials into finished products.
Smooth and continuous flow, as in chemical processing, ensures
efficiency and high output but requires stable demand.
Intermittent or job-shop flow is more suited to customized, low-volume
production where processes vary by order.
The choice of flow impacts cost, cycle time, and the ability to meet
customer demand effectively.
Continuous process system
1. Uninterrupted Flow of Production
• The process runs continuously, and once raw materials enter the system,
production proceeds until the final stage without stops.
• For example, in paper or petroleum processing, stopping midway would disrupt
the entire process.
2. Standardization of Products
• Goods are uniform in nature, with little or no variation in design.
• This allows for economies of scale and consistent quality across all units
produced.
3. Production Based on Forecasts
• Goods are produced in anticipation of future demand using accurate demand
forecasting.
• For example, food and fuel industries rely heavily on projected global
consumption trends.
4. Quality Standards Maintained
• Since production is large-scale and continuous, strict quality checks are
followed to ensure defect-free outputs.
• Consistency is critical as products are standardized and directly delivered to
markets.
5. Standardized Routing and Scheduling
• Pre-planned routes, schedules, and process sequences are followed to maintain
efficiency.
• For example, in papermaking, each stage (crushing → drying → refining → rolling)
must align perfectly to maintain balance.
6. High Capital Investment Requirement
• Setting up continuous production systems demands huge capital outlay in
machines, plants, and technology.
• Incremental additions later are difficult; hence capacity planning must be
accurate.
7. Capacity Balance is Essential
• Each stage must have balanced capacity, otherwise mismatches lead to
bottlenecks or underutilization.
• This directly impacts productivity and cost efficiency.
8. Productivity Linked to Flow Rate
• Throughput or flow rate determines system efficiency.
• If one stage fails, the entire system may have to shut down, causing delays and
higher costs.
Examples of Continuous Production Systems
Food Industry: Large-scale production of packaged food and
beverages based on demand forecasts.
Fuel Industry: Refining crude oil into petrol, diesel, and
other fuels to meet global energy demand.
Paper Industry: Continuous flow from wood pulp to rolling,
cutting, and packing without stoppages.
Types of Continuous Production Systems
Process Production System
Used for producing products in bulk through chemical or
mechanical processes.
Examples: Petroleum refining, cement, paper, and sugar
industries.
Assembly Line Production System
Involves assembling standardized parts in a fixed
sequence to produce large quantities.
Example: Automobile manufacturing, consumer
electronics, and household appliances.
Intermittent Production System
An intermittent production system refers to a method of production where the process does
not run continuously but starts and stops at irregular intervals, depending on customer orders.
Goods are produced in small quantities and often customized as per customer requirements.
The system is flexible, capable of handling a variety of products of different designs and sizes.
Since production is based on orders, no large stocks are maintained, and the flow of work
depends upon demand.
Common examples include goldsmiths crafting ornaments, tailors stitching clothes, or
workshops producing machinery parts based on client specifications.
Features of Intermittent Production System
[Link] of Production is Not Continuous
Unlike mass production, the flow is irregular because production begins only when an
order is received.
For example, a tailor stitches clothes only when he gets a customer’s order.
2.
[Link] of Products are Produced
The system is designed to handle a wide variety of goods, each of different sizes and
specifications.
This flexibility allows adaptation to frequent design and demand changes.
4.
[Link] of Production is Small
Since production depends on customer orders, the output is limited.
Goods are produced in smaller batches, unlike continuous production where scale is
much larger.
6.
[Link] of General-Purpose Machines
Machines used are not highly specialized but are general-purpose, enabling them to
work on different types of products.
This enhances flexibility but reduces efficiency compared to dedicated machines.
8.
[Link] of Operation Changes with Design
The production sequence is not fixed; it varies depending on product type, customer
specifications, and design.
For instance, a goldsmith uses different processes depending on whether he is making a
necklace, ring, or bracelet.
10.
[Link] Depends on Customer Orders
Production is not carried out in anticipation of demand but is initiated only after
receiving specific orders.
This minimizes inventory costs but may result in longer delivery times.
12.
Jumbled flow system
A jumbled flow system is a production system where the flow of operations is non-
standard, irregular, and highly complex, because every customer order is unique.
Unlike continuous and intermittent systems, there is no scope for batching or
repetitive processes. Each order follows its own process path, depending on design
specifications, customer requirements, and the scale of work involved.
Such systems are typical in large-scale projects or customized manufacturing,
where high levels of customization, multiple stakeholders, and long lead times make
the production flow more complicated to plan and control.
Features / Characteristics of Jumbled Flow Systems
1. Non-Standard Flow
No fixed sequence of operations; the process changes completely for each
new project.
For example, one project may begin with design approval, another may start
with land clearance.
2. High Customization
Every output is designed specifically for a client or order.
This eliminates standardization and increases process complexity.
3.
4. One-off Production
Items are often produced only once (unique buildings, power plants,
bridges).
There is no repetitive production to benefit from economies of scale.
5.
6. Complexity in Management
Multiple activities run in parallel (design, construction, installation, testing).
Coordinating across teams, resources, and timelines requires advanced
project management tools.
7.
8. Multiple Stakeholders
Involves architects, engineers, contractors, government agencies, regulators,
suppliers, and customers.
Decision-making becomes slower and requires coordination at every stage.
9.
10. Long Lead Times
Projects often take months or years to complete due to their size and
complexity.
Delays in one stage affect the entire project.
11.
Factors Influencing Choice of Design Elements in Service Systems
1. Degree of Customer Contact
Meaning
Customer contact refers to the extent to which customers are involved in the preparation, delivery, and consumption of services, and the
level of interaction between customers and service personnel.
Explanation
When customer contact is low, the service can be highly automated, standardized, and efficiency-oriented.
When customer contact is high, the service becomes customized, personal, and flexible, but efficiency goals are harder to achieve.
Types of Service Designs Based on Customer Contact
1. Low Degree of Contact (Quasi-Manufacturing Services):
Services resemble manufacturing systems.
Example: ATM services, online booking systems.
2.
3. Medium Degree of Contact (Mixed Services):
Some interaction is required but processes can still be standardized.
Example: Retail banking, diagnostic labs.
4.
5. High Degree of Contact (Pure Services):
Intense interaction, high customization.
Example: Healthcare, consulting, education.
2. Degree of Complexity
Meaning
Complexity refers to the number of steps and sequences involved in delivering the service to customers.
Explanation
Services with many steps and activities are more complex.
Complexity increases planning, coordination, and resource requirements.
The level of complexity can be measured by the number and intricacy of activities required for service delivery.
Examples
High Complexity Service: A hospital or airline with multiple activities like registration, diagnosis, treatment, pharmacy, billing, etc.
Low Complexity Service: A fast-food outlet where activities are simple and limited (order → prepare → deliver).
3. Degree of Divergence
Meaning
Divergence refers to the extent of variation or flexibility in service offerings to suit individual customer requirements.
Explanation
Low Divergence: Standardized services with limited choices, cost-efficient, easy to manage.
High Divergence: Highly customized services, offering many options, but harder to control efficiency.
Illustration (Airlines Example)
Low-Cost Airline (Low Divergence):
Economy class only, limited snacks, basic booking, no extra services.
Example: SpiceJet, AirAsia.
Full-Fare Airline (High Divergence):
Multiple fare classes, meal options, airport lounge, insurance, cab booking.
Example: Emirates, Singapore Airlines.
1. Service Positioning
Service positioning is the **strategic choice** a firm makes about the degree of customer contact,
divergence, and complexity in its service system
1. **Degree of Customer Contact**
* Low-contact services (like ATMs, vending machines) are standardized and efficient.
* High-contact services (like restaurants or paan shops) require personalization.
2. **Degree of Complexity and Divergence**
* Simple services limit customer choices (standard tea/coffee).
* Complex services allow wide variety and customization (Café Coffee Day menu).
3. **Customization vs. Standardization**
* Standardization ensures uniform quality and lower costs.
* Customization provides differentiation and customer satisfaction.
4. **Strategic Alternatives in Service Delivery**
* Self-service, assisted service, or full-service models.
* Firms must balance cost efficiency with service quality.
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# **2. Service Blueprinting**
Service blueprinting is a **diagrammatic representation** of the service delivery system that shows
customer interactions, visible activities, and back-office processes.
### **Main Points with Explanations**
1. **Mapping the Process**
* Identifies each step of service delivery, including customer interactions.
* Separates activities into front-stage (visible) and back-stage (invisible).
2. **Line of Visibility**
* Divides activities that the customer can see from those that are hidden.
* Helps in managing customer perception of service quality.
3. **Identification of Bottlenecks**
* Blueprinting highlights inefficiencies and service failures.
* Provides scope for redesign to improve service flow.
4. **Tool for Service Improvement**
* Used for training, standardization, and innovation in services.
* Enables organizations to continuously monitor and improve service delivery.
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# **3. Product Development Process – Stages**
The product development process is a **structured set of activities** that
organizations follow to create new products.
### **Stages with Explanations**
1. **Concept Generation**
* Idea generation from customers, employees, or R&D.
* Feasibility study to evaluate practicality and profitability.
2. **Design**
* Preliminary design is created based on feasibility.
* Process planning and cost analysis ensure affordability and scalability.
3. **Development**
* Prototype is developed and tested for performance.
* Iterations are made until design requirements are met.
4. **Production**
* Final specifications are documented.
* Commercial production starts for market distribution.
5. **Feedback and Iteration (Additional Point)**
* Continuous improvement based on customer feedback.
* Ensures product remains competitive and updated.