Business
Production Process
The production process refers to the series of steps involved in transforming raw materials or inputs into finished goods or services. It encompasses activities such as sourcing, manufacturing, quality control, and distribution. Efficient management of the production process is crucial for optimizing resource utilization and meeting customer demand.
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7 Key excerpts on "Production Process"
- Simha R. Magal, Jeffrey Word(Authors)
- 2011(Publication Date)
- Wiley(Publisher)
We will conclude by examining the role of enterprise systems in supporting the Production Process. Whereas in the chapters on the procurement and fulfillment process we explained the impact of the processes on the company’s financial position, we will omit this discussion in this chapter. Even a simplified discussion of the financial impact of the Production Processes requires an understanding of accounting concepts related to allocating labor and overhead costs, and this is beyond the scope of this book. 5.1 KEY CONCEPTS AND ASSUMPTIONS The Production Process is more complex than the procurement and fulfillment processes. Therefore, it is essential that we begin this chapter by defining certain key concepts and assumptions. Specifically, we focus on different types of production 99 100 Chapter 5. The Production Process processes and strategies as well as master data regarding bills of material, work centers, and product routings. 5.1.1 Production Processes and Strategies There are many different types of Production Processes, and they can be classified in different ways. For example, production can involve either assembling or man- ufacturing. Assembling involves taking a number of component materials, such as a board, nuts, and bolts, and putting them together to produce the desired finished product, such as a skateboard. In contrast, manufacturing involves taking raw mate- rials, such as plastic pellets, and creating something from them, such as a plate or a cup. Another way to classify production is in terms of discrete manufacturing (e.g., furniture, computers, plates, cups) versus process manufacturing (e.g., oil and gas). A detailed discussion of these concepts is beyond the scope of this book. Skateboard production at SSB is a discrete process that consists of assembling the skateboard from component materials.
eBook - PDFOperations Management
Creating Value Along the Supply Chain
- Roberta S. Russell, Bernard W. Taylor, Tiffany Bayley, Ignacio Castillo(Authors)
- 2019(Publication Date)
- Wiley(Publisher)
A process is a group of related tasks with specific inputs and outputs. Processes exist to cre- ate value for the customer, the shareholder, or society. Process design defines what tasks need to be done and how they are to be coordinated among functions, people, and organizations. The essence of operations management includes planning, analyzing, and improving pro- cesses. A firm plans, analyzes, and redesigns processes as required using changes in strategy and emerging technology. Process strategy is an organization’s overall approach for physically producing goods and providing services. Process decisions should reflect how the firm has chosen to compete in the marketplace, reinforce product decisions, and facilitate the achievement of corporate goals. A firm’s process strategy defines its: • Vertical integration The extent to which the firm will produce the inputs and control the outputs of each stage of the Production Process. • Capital intensity The mix of capital (i.e., equipment, automation) and labour resources used in the Production Process. • Process flexibility The ease with which resources can be adjusted in response to changes in demand, technology, products or services, and resource availability. • Customer involvement The role of the customer in the Production Process. Process planning determines how a firm will produce a product or provide a service. It decides which components will be made in-house and which will be purchased from a sup- plier, selects processes, and develops and documents the specifications for manufacture and delivery. In this section, we discuss outsourcing decisions, process selection, and process plans. Process a group of related tasks with specific inputs and outputs. Process strategy an organization’s overall approach for physically producing goods and services. Process planning the conver- sion of designs into workable instructions for manufacture or delivery.
eBook - PDFAutomotive Quality Systems Handbook
ISO/TS 16949:2002 Edition
- David Hoyle(Author)
- 2005(Publication Date)
- Butterworth-Heinemann(Publisher)
There is a view that design is not a business process because the stakeholders are dif-ferent at each end. On the input end could be marketing and the output end could be production. Under this logic, production would not be a business process because on the input could be sales and the output could be the customer. Therefore, the business process flow is: customer – sales – production – distribution – finance – customer. The sales process takes the order from the customer and routes it to the Production Process. The Production Process supplies product to the distribution process and the dis-tribution process delivers product to the customer, collects the cheque and routes it to the finance process where it is put into the bank and turned into cash. The business process is therefore ‘order to cash’ or Demand Fulfilment. With this convention, there would be only four business processes in most organizations. These are displayed diagrammatically in Figure 1.15 and the purpose of each process explained as follows with Table 1.9 show-ing the stakeholders: • Mission management process : Determines the direction of the business, continually confirms that the business is proceeding in the right direction and makes course corrections to keep the business focused on its mission. The business processes are developed within mission management as the enabling mechanism by which the mission is accomplished. • Resource management process : Specifies, acquires and maintains the resources required by the business to fulfil the mission and disposes of any resources that are no longer required. • Demand creation process : Penetrates new markets and exploits existing markets with a promotional strategy that influences decision-makers and attracts potential customers to the organization. New product development would form part of this process if the business were market driven. Basic concepts 61
eBook - PDF- Richard E. Crandall, William R. Crandall, Charlie C. Chen(Authors)
- 2014(Publication Date)
- CRC Press(Publisher)
As a side area of interest, the dictionary also has defini-tions for 37 other terms beginning with process such as process batch, process capa-bility, and process train. Operations management practitioners are certainly getting their money’s worth from the word process . This observation suggests that a process is organized (planned) and connects individual activities/transactions into an inte-grated system to accomplish an objective. Simply stated, a process connects individual transactions into a sequence of activities that accomplish a desired end result. If you accept this idea, it is easy to see that a process orientation leads nicely into the sup-ply chain concept. Processes tend to be both internally focused toward operations and externally focused toward the customer or supplier. While we want our processes to 237 Production and Service Processes be efficient (doing things right) and of high quality, we want them especially to be cus-tomer focused and effective (doing the right thing) (Drucker 1974). In describing lean management, Womack also describes a process when he states that “All value created in any organization is the end result of a lengthy sequence of steps— a value stream. These steps must be conducted properly in the proper sequence at the proper time. The flow of value toward the customer is horizontal, across the organization” (Womack 2006). In their book about implementing Six Sigma in service operations, Snee and Hoerl insist that a process view is necessary if improvement programs are to be suc-cessful. They believe that all works—whether done in manufacturing, financial services, health care, e-commerce, or anywhere else—occur through a system of interconnected processes (Snee and Hoerl 2005). Consider this simple example—customer order processing.
eBook - PDF- Roberta S. Russell, Bernard W. Taylor(Authors)
- 2019(Publication Date)
- Wiley(Publisher)
mass production The high-volume produc- tion of a standard product for a mass market. process A group of related tasks with specific inputs and outputs. process flowchart A document that uses standardized symbols to chart the productive and nonproductive flow of activities involved in a process; it may be used to document current pro- cesses or as a vehicle for process improvement. process innovation The total redesign of a process. process planning The conversion of designs into workable instructions for manufacture, along with associated decisions on component pur- chase or fabrication, and process and equipment selection. process plans A set of documents that detail manufacturing or service delivery specifications. process strategy An organization’s overall approach for physically producing goods and services. project The one-of-a-kind production of a product to customer order that requires a long time to complete and a large investment of funds and resources. vertical integration The degree to which a firm produces the parts that go into its products. *Table 6.4 contains additional definitions of digital technologies Solved Problems Texloy Manufacturing Company must select a process for its new product, TX2, from among three different alternatives. The following cost data have been gathered: Process A Process B Process C Fixed cost $10,000 $40,000 $70,000 Variable cost $5/unit $2/unit $1/unit For what volume of demand would each process be desirable? Solution If v represents the number of TX2s demanded (and, we assume, produced), then Total cost for process A = $10,000 + $5v Total cost for process B = $40,000 + $2v Total cost for process C = $70,000 + $1v Next, we calculate the points of indifference between each pair of pro- cesses by equating their total costs and solving for demand volume, v. Always begin with the process that has the lowest fixed cost and com- pare it to the process with the next-lowest fixed cost, and so on.
- Simha R. Magal, Jeffrey Word(Authors)
- 2011(Publication Date)
- Wiley(Publisher)
The request is then authorized for production by the production supervi- sor. The next step is to release the order for production so that the materials needed to produce the bikes are issued from storage. Very often, production involves the use of external systems, such as plant data collection (PDC) sys- tems, that utilize data from the ERP system to execute production on the shop floor. In such cases, data about the order are transmitted to the external system. After the finished goods have been produced, the actual production is confirmed in the system, signaling that the steps required to manufacture the materials have been completed. The materials are then moved to stor- age, and the system reports that they are now available for consumption by other processes (e.g., fulfillment). In addition, several activities are performed Process 197 Figure 6-16: The Production Process periodically during the process, including overhead allocation, work in process determination, and order settlement. Now that we have a general understand- ing of the various process steps involved with production, we examine these steps in terms of triggers, data, tasks, and outcomes. Our discussion will use the following make-to-stock GBI scenario. The inventory for the men’s off-road bike (ORMN1000) has fallen below its mini- mum level. Consequently, GBI must produce more of this model. Going further, the company has determined that the optimum quantity for a single production run is 25 bikes. We will assume that the raw materials needed to make these bikes and the needed capacity in the various work centers are both available. REQUEST PRODUCTION Figure 6-17 illustrates the elements of the request production step. A request for production is triggered by a need to produce materials. Typically, this trigger is a result of activity in another process. Consider the two production strategies 198 CHAPTER 6 The Production Process discussed earlier in this chapter.
eBook - PDF- Jr., Alex N. Beavers(Authors)
- 2001(Publication Date)
- Auerbach Publications(Publisher)
55 Chapter 4 The Role of Process in the e-Factory Purpose of This Chapter Every business enterprise is a combination of activities that results in the creation of value in the form of a finished good or provided service. All the activities can be grouped into one or more major business processes. Each business process operates as an integrated system of people, capital, and technology. It is the structure of the business process and how people, capital, and technology are organized that makes the difference in the performance of the enterprise. Technology depends on process and amplifies process. The purpose of this chapter is to describe the role of the business processes that are critical to the operation and evolution of the e-factory. Why Process Is Important Process is important in the e-factory. In fact, the e-factory is all about process and how technology is changing it, supporting it, and accelerating it. All of the big changes that are taking place in the manufacturing environment are happening to processes. The good news is that most of what has been learned about best process practices and applied over the last decade continues to be useful. In fact, much of the technology that is now available for the e-factory would be wasted without applying the process design concepts and best practices that have been developed by a variety of companies and institutions. The long evolution of best practices in business process design and operation is converging on a set of principles that is creating a consensus approach to business process configuration. This common set of principles represents a merger of the thinking and practice that has evolved from under 56 Roadmap to the e-Factory the banner of several names that include Total Quality Management, Concur-rent Engineering, Continuous Flow Manufacturing, Business Process Reengi-neering, and Lean Manufacturing.
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