Learning Objectives
LO 4-1: Describe the different types of processes and the types of outputs they create.
Job shop processes are used in departments where similar processing equipment or specialties are housed, offering custom products or services. Output volumes are very low. Batch process is when a limited number of units are created stage by stage over a series of workstations. The output volume is low to medium. Assembly line processes typically have high levels of raw materials inventories and have little production flexibility. Output volume is high. Continuous process has almost no product variety, and the equipment is highly automated and dedicated to one task. The output volume is very high. Mass customization process is a hybrid process employing aspects of job shop and assembly line processes. The result is a high output volume of customized products.
LO 4-2: Create a process flowchart and describe how it is used.
See figures 4.3, 4.4, and 4.5 (pages 86-87) for examples of flowcharts. Process flowcharts are used to design, assess, and improve services. For example, a process flowchart may help identify redundancies or unnecessary steps within a process. In addition, they enable process designers to visually confirm what should happen next in a process, where decision points are required, etc.
LO 4-3: Explain the relationships between capacity, capacity utilization, and process design.
Capacity is the set number of units or customers that can be produced or served over a fixed period of time. Capacity requirements are generally based on demand forecasts. Capacity utilization is the percentage of capacity that is actually used. This is determined by dividing the actual output by the effective capacity. Consequently, required capacity is essential to know prior to process design since part of process design will be to factor in constraints (such as demand fluctuations, equipment downtime, etc.) that determine effective capacity.
LO 4-4: Illustrate how break-even analysis is used to compare potential investments in make-versus-buy decisions.
Break-even analysis enables a company to determine the volume of sales at which the company can make a profit once it has analyzed the costs associated with a make or buy decision. Determining the break-even point, based on demand (production), price, and fixed and variable costs, shows which option (make or buy) is the preferable solution.
LO 4-5: Summarize the benefits of sustainability in process designs.
By including sustainability concepts in process design, companies can reduce energy use, carbon emissions, and waste. Furthermore, incorporating sustainability concepts such as open office environments, modular workstations, etc. has been shown to increase employee productivity and reduce operating costs.
Chapter Outline
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