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please pick a strategy on the Chapter 6 & 7 and apply it to a specific company and answer the questions below. Do this for all four strategies. Note, you don’t have to use the same company. You can use four different companies. What competitive advantage can these companies have with these processes? How does setup effect these process strategies? How can setup time be reduced?Apply one strategy to one company and answer the three questions above. Do this for each of the four process strategies. In Word, format the paper in sections by process strategy and subsections by each question. This paper is to be written in APA format.
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GLOBAL COMPANY PROFILE: Harley-Davidson

Four Process Strategies 282

Selection of Equipment 288

Process Analysis and Design 288

Special Considerations for Service
Process Design 293



Production Technology 294
Technology in Services 298
Process Redesign 298
Alaska Airlines
Alaska Airlines
CHAPTER
OUTLINE
C H A P T E R
7
Process Strategy
10
OM
STRATEGY
DECISIONS





Design of Goods and Services
Managing Quality
Process Strategy
Location Strategies
Layout Strategies





Human Resources
Supply-Chain Management
Inventory Management
Scheduling
Maintenance
279
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C H A P T E R
7
Repetitive Manufacturing Works
at Harley-Davidson
GLOBAL COMPANY PROFILE
Harley-Davidson
S
ince Harley-Davidson’s founding in Milwaukee in 1903, it has competed with hundreds of
manufacturers, foreign and domestic. The competition has been tough. Recent competitive
battles have been with the Japanese, and earlier battles were with the German, English, and
Italian manufacturers. But after over 110 years, Harley is the only major U.S. motorcycle company. The company now has five U.S. facilities and an assembly plant in Brazil. The Sportster
powertrain is manufactured in Wauwatosa, Wisconsin, and the sidecars, saddlebags, windshields, and other specialty items are produced in Tomahawk, Wisconsin. The Touring and Softail
bikes are assembled in York, Pennsylvania, while the Sportster models, Dyna models, and VRSC
models of motorcycles are produced in Kansas City, Missouri.
As a part of management’s lean manufacturing effort, Harley groups production of parts that
require similar processes together. The result is work cells. Using the latest technology, work
cells perform in one location all the operations necessary for production of a specific module.
Raw materials are moved to the work cells for module production. The modules then proceed
Frame tube
bending
Frame-building
work cells
Flowchart Showing the
Production Process at
Harley-Davidson’s York
Assembly Plant
Hot-paint
frame painting
Frame
machining
THE ASSEMBLY LINE
TESTING
28 tests
Engines and
transmissions
Incoming parts
Air cleaners
Oil tank work cell
Fluids and mufflers
Shocks and forks
Fuel tank work cell
Handlebars
Wheel work cell
Fender work cell
Roller testing
Engines arrive on a JIT
schedule from a 10-station
work cell in Milwaukee.
In less than 3 hours,
450 parts and
subassemblies go
into a Harley motorcycle.
Crating
fckncg/Alamy
280
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Rick Friedman/Corbis
Rick Friedman/Corbis
Wheel assembly modules are prepared in a work cell for JIT delivery to the
assembly line.
For manufacturers like Harley
Harley-Davidson,
Davidson which produces a large number
of end products from a relatively small number of options, modular bills of
material provide an effective solution.
to the assembly line. As a double check on quality, Harley
precision sensors play a key role in maintaining tolerances
has also installed “light curtain” technology, which uses an
and producing a quality product. Each day the York facility
infrared sensor to verify the bin from which an operator is
produces up to 600 heavy-duty factory-custom motorcycles.
taking parts. Materials go to the assembly line on a just-in-
Bikes are assembled with different engine displacements,
time basis, or as Harley calls it, using a Materials as Needed
multiple wheel options, colors, and accessories. The result
(MAN) system.
is a huge number of variations in the motorcycles available,
The 12.5-million-square-foot York facility includes manu-
which allows customers to individualize their purchase. (See
www.Harley-Davidson.com for an example of modular
machining, painting, and polishing. Innovative manufacturing
customization.) The Harley-Davidson production system
techniques use robots to load machines and highly auto-
works because high-quality modules are brought together on
mated production to reduce machining time. Automation and
a tightly scheduled repetitive production line.
Engines are assembled in Memomonee Falls, Wisconsin, and placed in their own
protective containers for shipment to the York facility. Upon arrival in York, engines
are placed on an overhead conveyor for movement directly to the assembly line.
It all comes together on the line. Any employee who spots a problem has the
authority to stop the line until the problem in corrected. The multicolored “andon”
light above the line signals the severity of the problem.
Rick Friedman/Corbis
Nuccio DiNuzzo/KRT/Newscom
facturing cells that perform tube bending, frame-building,
281
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L E A RNING
OBJECTIVES
LO 7.1
Describe four process strategies 282
LO 7.2
Compute crossover points for different processes 286
LO 7.3
Use the tools of process analysis 289
LO 7.4
Describe customer interaction in service processes 293
LO 7.5
Identify recent advances in production technology 294
Four Process Strategies
Process strategy
An organization’s approach to
transforming resources into goods
and services.
LO 7.1 Describe
four process strategies
In Chapter 5, we examined the need for the selection, definition, and design of goods and
services. Our purpose was to create environmentally friendly goods and services that could be
delivered in an ethical, sustainable manner. We now turn to their production. A major decision for an operations manager is finding the best way to produce so as not to waste our planet’s resources. Let’s look at ways to help managers design a process for achieving this goal.
A process strategy is an organization’s approach to transforming resources into goods and services. The objective is to create a process that can produce offerings that meet customer requirements
within cost and other managerial constraints. The process selected will have a long-term effect on
efficiency and flexibility of production, as well as on cost and quality of the goods produced.
Virtually every good or service is made by using some variation of one of four process
strategies: (1) process focus, (2) repetitive focus, (3) product focus, and (4) mass customization.
The relationship of these four strategies to volume and variety is shown in Figure 7.1. We examine Arnold Palmer Hospital as an example of a process-focused firm, Harley-Davidson as a
repetitive producer, Frito-Lay as a product-focused operation, and Dell as a mass customizer.
Process Focus
Process focus
A production facility organized
around processes to facilitate lowvolume, high-variety production.
Figure
The vast majority of global production is devoted to making low-volume, high-variety products
in places called “job shops.” Such facilities are organized around specific activities or processes.
In a factory, these processes might be departments devoted to welding, grinding, and painting.
In an office, the processes might be accounts payable, sales, and payroll. In a restaurant, they
might be bar, grill, and bakery. Such facilities are process focused in terms of equipment, layout,
and supervision. They provide a high degree of product flexibility as products move between
the specialized processes. Each process is designed to perform a variety of activities and handle
frequent changes. Consequently, they are also called intermittent processes.
7.1
Volume
Low Volume
Process Selected Must Fit
with Volume and Variety
Variety (flexibility)
High Variety
one or few
units per run
(allows customization)
Process Focus
projects, job shops
(machine, print,
hospitals, restaurants)
Arnold Palmer Hospital
High Volume
Mass Customization
(difficult to achieve
but huge rewards)
Dell Computer
Repetitive
(autos, motorcycles,
home appliances)
Harley-Davidson

Changes in Modules
modest runs,
standardized modules
Changes in Attributes
(such as grade, quality,
size, thickness, etc.)
long runs only
Repetitive Process
Poor Strategy
(Both fixed and
variable costs
are high.)
Product Focus
(commercial baked goods,
steel, glass, beer)
Frito-Lay
282
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CH AP TER 7
|
PROCESS STRATEGY
(a)
(b)
(c)
(d)
Process Focus
(low-volume, high-variety,
intermittent process)
Arnold Palmer Hospital
Repetitive Focus
(modular)
Product Focus
(high-volume, low-variety,
continuous process)
Frito-Lay
Mass Customization
(high-volume, high-variety)
Many inputs
Raw material
and module inputs
Few inputs
Many part and
component inputs
(surgeries, sick patients,
baby deliveries, emergencies)
(multiple engines and
wheel modules)
(corn, potatoes, water,
seasoning)
(chips, hard drives,
software, cases)
Harley-Davidson
283
Dell Computer
Few
modules
Many modules
Many departments and
many routings
Figure
Many output versions
(custom PCs and notebooks)
Tund/Shutterstock
300dpi/Shutterstock
Output variations in size,
shape, and packaging
(3-oz, 5-oz, 24-oz packages
labeled for each market)
Archman/Shutterstock
Modules combined
for many outputs
(many combinations of
motorcycles)
Brasiliao/Shutterstock
Many different outputs
(uniquely treated patients)
7.2
Four Process Options with an Example of Each
Referring to Figure 7.2(a), imagine a diverse group of patients entering Arnold Palmer
Hospital, a process-focused facility, to be routed to specialized departments, treated in a distinct way, and then exiting as uniquely cared-for individuals.
Process-focused facilities have high variable costs with extremely low utilization of facilities,
as low as 5%. This is the case for many restaurants, hospitals, and machine shops. However,
facilities that lend themselves to electronic controls can do somewhat better.
Repetitive Focus
Repetitive processes, as we saw in the Global Company Profile on Harley-Davidson, use modules
(see Figure 7.2b). Modules are parts or components previously prepared, often in a productfocused (continuous) process.
The repetitive process is the classic assembly line. Widely used in the assembly of virtually all
automobiles and household appliances, it has more structure and consequently less flexibility
than a process-focused facility.
Fast-food firms are another example of a repetitive process using modules. This type of production allows more customizing than a product-focused facility; modules (for example, meat, cheese,
sauce, tomatoes, onions) are assembled to get a quasi-custom product, a cheeseburger. In this manner, the firm obtains both the economic advantages of the product-focused model (where many of
the modules are prepared) and the custom advantage of the low-volume, high-variety model.
M09_HEIZ0422_12_SE_C07.indd 283
VIDEO 7.1
Process Strategy at Wheeled Coach
Ambulance
Modules
Parts or components of a product
previously prepared, often in a
continuous process.
Repetitive process
A product-oriented production
process that uses modules.
20/11/15 4:35 PM
284 PA RT 2 | DESIGNING OPERATI ONS
Product Focus
Product focus
A facility organized around
products; a product-oriented,
high-volume, low-variety process.
High-volume, low-variety processes are product focused. The facilities are organized around products. They are also called continuous processes because they have very long, continuous production
runs. Products such as glass, paper, tin sheets, lightbulbs, beer, and potato chips are made via a
continuous process. Some products, such as lightbulbs, are discrete; others, such as rolls of paper,
are made in a continuous flow. Still others, such as repaired hernias at Canada’s famous Shouldice
Hospital, are services. It is only with standardization and effective quality control that firms have
established product-focused facilities. An organization producing the same lightbulb or hot dog
bun day after day can organize around a product. Such an organization has an inherent ability
to set standards and maintain a given quality, as opposed to an organization that is producing
unique products every day, such as a print shop or general-purpose hospital. For example, FritoLay’s family of products is also produced in a product-focused facility [see Figure 7.2(c)]. At FritoLay, corn, potatoes, water, and seasoning are the relatively few inputs, but outputs (like Cheetos,
Ruffles, Tostitos, and Fritos) vary in seasoning and packaging within the product family.
A product-focused facility produces high volume and low variety. The specialized nature
of the facility requires high fixed cost, but low variable costs reward high facility utilization.
Mass Customization Focus
Mass customization
Rapid, low-cost production that
caters to constantly changing
unique customer desires.
Our increasingly wealthy and sophisticated world demands individualized goods and services.
A peek at the rich variety of goods and services that operations managers are called on to supply is shown in Table 7.1. The explosion of variety has taken place in automobiles, movies,
breakfast cereals, and thousands of other areas. Despite this proliferation of products, operations managers have improved product quality while reducing costs. Consequently, the variety
of products continues to grow. Operations managers use mass customization to produce this
vast array of goods and services. Mass customization is the rapid, low-cost production of goods
and services that fulfill increasingly unique customer desires. But mass customization (see the
upper-right section of Figure 7.1) is not just about variety; it is about making precisely what
the customer wants when the customer wants it economically.
Mass customization brings us the variety of products traditionally provided by low-volume
manufacture (a process focus) at the cost of standardized high-volume (product-focused)
production. However, achieving mass customization is a challenge that requires sophisticated
operational capabilities. Building agile processes that rapidly and inexpensively produce custom
products requires a limited product line and modular design. The link between sales, design,
production, supply chain, and logistics must be tight.
Dell Computer [see Figure 7.2(d)] has demonstrated that the payoff for mass customization
can be substantial. More traditional manufacturers include Toyota, which recently announced
TABLE 7.1
Mass Customization Provides More Choices Than Ever
NUMBER OF CHOICESa
ITEM
1970s
21ST CENTURY
Vehicle styles
18
1,212
Bicycle types
8
211,000c
iPhone mobile game apps
0
1,200,000g
Web sites
0
634,000,000d
267
1,551e
40,530
300,0001
Movie releases per year
New book titles
Houston TV channels
Breakfast cereals
Items (SKUs) in supermarkets
High-definition TVs
5
185
160
340
14,000b
150,000f
0
102
Source: Various; however, many of the data are from the Federal Reserve Bank of Dallas.
aVariety available in America; worldwide the variety increases even more. b1989.
cPossible combinations for one manufacturer. dRoyal Pingdom Estimate (2015).
ewww.the-numbers.com/movies/year/2014. fSKUs managed by H. E. Butts grocery chain.
gBusiness Week, April 26, 2015.
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CH AP TER 7
|
PROCESS STRATEGY
285
delivery of custom-ordered cars in 5 days. Similarly, electronic controls allow designers in the
textile industry to rapidly revamp their lines and respond to changes.
The service industry is also moving toward mass customization. For instance, not very
many years ago, most people had the same telephone service. Now, not only is the phone service full of options, from caller ID to voice mail, but contemporary phones are hardly phones.
They may also be part camera, computer, game player, GPS, and Web browser. Insurance
companies are adding and tailoring new products with shortened development times to meet
the unique needs of their customers. And firms like iTunes, Spotify, Rhapsody, Amazon, and
eMusic maintain a music inventory on the Internet that allows customers to select a dozen
songs of their choosing and have them made into a custom playlist. Similarly, the number of
new books and movies increases each year. Mass customization places new demands on operations managers who must create and align the processes that provide this expanding variety of
goods and services.
Making Mass Customization Work Mass customization suggests a high-volume
system in which products are built-to-order. Build-to-order (BTO) means producing to customer
orders, not forecasts. But high-volume build-to-order is difficult. Some major challenges are:





Product design must be imaginative. Successful build-to-order designs include a limited
product line and modules. Ping Inc., a premier golf club manufacturer, uses different combinations of club heads, grips, shafts, and angles to make 20,000 variations of its golf clubs.
Process design must be flexible and able to accommodate changes in both design and technology. For instance, postponement allows for customization late in the production process.
Toyota installs unique interior modules very late in production for its popular Scion, a
process also typical with customized vans. Postponement is further discussed in Chapter 11.
Inventory management requires tight control. To be successful with build-to-order, a firm
must avoid being stuck with unpopular or obsolete components. With virtually no raw
material, Dell puts custom computers together in less than a day.
Tight schedules that track orders and material from design through delivery are another
requirement of mass customization. Align Technology, a well-known name in orthodontics,
figured out how to achieve competitive advantage by delivering custom-made clear plastic
aligners within 3 weeks of the first visit to the dentist’s office (see the OM in Action box
“Mass Customization for Straight Teeth”).
Responsive partners in the supply chain can yield effective collaboration. Forecasting, inventory management, and ordering for JCPenney shirts are all handled for the retailer by its
supplier in Hong Kong.
Build-to-order (BTO)
Produce to customer order rather
than to a forecast.
Postponement
The delay of any modifications
or customization to a product as
long as possible in the production
process.
Mass customization/build-to-order is the new imperative for operations. There are advantages to mass customization and building to order: first, by meeting the demands of the
marketplace, firms win orders and stay in business; in addition, they trim costs (from personnel
to inventory to facilities) that exist because of inaccurate sales forecasting.
Mass Customization for Straight Teeth
Align Technology of Santa Clara, California, wants to straighten your teeth
with a clear plastic removable aligner. The company is a mass customizer for
orthodontic treatments. Each patient is very custom, requiring a truly unique
product; no two patients are alike. Based on dental impressions, X-rays, and
photos taken at the dentist’s office and sent to Align headquarters, the firm
builds a precise 3-D computer model and file of the patient’s mouth. This
digitized file is then sent to Costa Rica, where technicians develop a comprehensive treatment plan, which is then returned to the dentist for approval. After
approval, data from the virtual models and treatment plan are used to program
3-D printers to form molds. The molds are then shipped to Juarez, Mexico,
where a series of customized teeth aligners—usually about 19 pairs—are
made. The time required for this process: about 3 weeks from start to finish.
M09_HEIZ0422_12_SE_C07.indd 285
The clear aligners take the
place of the traditional “wire
and brackets.” Align calls the
product “complex to make,
easy to use.” With good OM,
mass customization works,
even for a very complex, very
individualized product, such as
teeth aligners.
Hugh Grannum/KRT/Newscom
OM in Action
Sources: BusinessWeek (A …
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