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Classifications of Operations Systems
Classifications of Operations Systems
Volume / Flexibility Service – Process Matrix
Continuous, Automatedand rigid flow; process segments tightly linked
Product - Process Matrix
Project
Job Shop
Batch Flow
Line Flow
Line Flow
Continuous Flow
Very Jumbled Flow; process segments loosely linked
Jumbled flow, but a dominant flow exists
Line Flow Worker paced
Machine paced
Process Pattern
Challenges toManagement
One of a kind orfew
Low Volumes,many products
High Volumes,Several majorproducts
Very high Volumes,standardproduct
Challenges toManagement
Scheduling; materials Handling;shifting bottlenecks
Worker motivation; balance;maintaining enough flexibility
Capital expenses for big chunk capacity;technological change Materials management;vertical integration
Bidding;delivery;Product design flexibility
PriceQuality (ProductDifferentiation);Flexibility inoutput volumes
Opportunity Costs
Out-of-pocket costs
Product Mix
Volume / Flexibility
Projects- oil rig construction
- development of a computer software package
- overhaul of an airliner
Job shop- Low volume, low standardisation – one of a kind, custom design, general purpose equipment, high margins, jumbled flow, estimating costs, estimating delivery times, order tracing and expediting
- tool room
- tailor
- operation theatre
Volume / Flexibilty (contd.)
Continuous- High volume, specialised equipment, high capital investment, high standardisation, commodity, vertical integration, long runs, economies of scale, timing expansion and technological changes
- nuts and bolts
- cement, sugar, petroleum
- photographic films
Volume / Flexibilty (contd.)
Batch
- Standardised designs, back-up suppliers, finished or intermediate goods inventory, systematising diverse elements, SPC, developing standards, large complex operations
- aero-engines
- mining equipment
- pumps, compressors
- mail collection
Disconnected line flow or Connected line flow
Volume / Flexibilty (contd.)
The Service – Process Matrix (Schmenner)- Two Axes:
- Degree of Labour Intensity; ratio of labour cost to value of plant and equipment
Electric utilities : 14.21Communications : 5.31Amusement parks : 2.49Hospitals : 1.63Banking : 1.20Hotels : 1.01Retail trade : 0.62Business services : 0.42
Volume / Flexibilty (contd.)
The Service – Process Matrix (Schmenner)
- Two Axes:
- Degree of Interaction and Customisation
Interaction : Degree to which the customer can intervene in the process (e.g. restaurant), is not duration of contact (e.g. lectures)
Customisation : Degree to which the service provided is tailored to the needs of the
customers
The Service – Process Matrix
Degree of Interaction & Customisation
Low High
Service FactoryAirlinesHotelsResorts
Service ShopHospitalsAuto Repairs
Mass ServiceRetailingSchoolsCommercial Banking
ProfessionalDoctorsLawyersAccountants
Degree of Labour Intensity
Low
High
The Service – Process Matrix (contd)
Low Labour Intensity- Capital decisions – Capacity, Technology and Timing
- Managing demand to avoid peaks and to promote off peaks
- Scheduling service delivery
The Service – Process Matrix (contd)
High Labour Intensity
- Hiring, training, welfare
- Methods development and control
- Scheduling workforce
The Service – Process Matrix (contd)
Low Interaction & Customisation
- Marketing
- Making service “warm”
- Attention to physical surroundings
- Managing fairly rigid hierarchy
The Service – Process Matrix (contd)
High Interaction & Customisation
- Fighting expenses increases
- Reacting to customer interventions in process
- Gaining employee loyalty
- Managing flat hierarchy- Loose subordinate / superior relationship
- Managing advancement of people
The Service – Process Matrix (contd)
Help companies assess their competitive stance and means by which they provide their services
Possibility to move across (the diagonal)?(e.g. banking and retailing becoming more automated, restaurants with more standardised menus, professional service firms to specialise; pursuit is for controls and reduced costs)
Assignment
Attempt to categorise the operations system of your own organisation, or others with which you are familiar
How would it plan to move across (the diagonal)? What would be the implications vis-à-vis the organisation’s structure, systems and processes?