MAJOR PROCESS DECISIONS

There are Five common process decision considered:

I. Process Choice.

II. Vertical Integration.

III.Resource Flexibility.

IV. Customer Involvement.

V. Capital Intensity.

Process Choice

There are 5 basic process types:

I. Job Shop.

II. Batch.

III. Repetitive or Assembly line.

IV. Continuous.

V. Project.

Job shop process:

Each job requires diff. processing req.

Example: tool and die shop where process is carried to

produce one kind of tools.

They often carry out jobs for other firms.

Used when low vol. of high variety of goods

needed.

Batch process:

Here vol. are high because same or like products are

repeatedly provided.

Example: Soft drinks,boooks,magazine.

Used when moderate vol. of goods or service is req.

Repetitive Process:

It is also known as line process.

As it include production lines and assembly lines.

Resources are org around a product move in flow from

one operation to the next accordingly.

This is suitable to “manufacture-to-stock” strategy.

Continuous process:

Used when a standardized product in high vol.

These process often is capital intensive

Example: steel,sugar,flour,cement.

Project process:Projects tend to be complex,take a long time

and consists of large no.of complex activities.Here the equip. flexibility and labor ranges

from low to high.Examples: building a shopping

centre,dam,bridge.

VERTICAL INTEGRATION

The amount of the production and distribution chain which is brought under the ownership of the firm.

The mgmt considers activities from acquisition of R.M to delivery of finished goods to customer.

In which the firm wants to decide how many production process needed and designed to carry out and how many by outsourcing.

a) Backward integration.b) Forward integration.

Resource Flexibility

Means the flexibility of resources such as employees,

facilities and equip.Flexible work force which will provide reliable customer

service and avoids bottlenecks.Its is better to have permanent workforce with multiple

skills.

CUSTOMER-INVOLVEMENT

The extent to which customers interact with the process.

Firms competes on customization allows customers to

come up with their own product.

Example: Furniture making.

CAPITAL INTENSITY

Means the predominant resources used in manufacturing

consists of machines and equip. rather than human labour.

Here it increases the production quality and productivity.

P.S: huge costs for low level operations.