Manufacturing and Service Processes

Manufacturing and Service Processes

In this lesson, you’re expected to learn about:
– the transformation process model
– the difference between manufacturing and service processes
– the product-process matrix
What is the Transformation Process Model?

A transformation process is a group of activities that produce products and services by transforming inputs into outputs.

The general transformation process model is depicted below.

Enlarged version: http://bit.ly/2pcCjJc

• All operations produce products and services by changing inputs into outputs; however, we know that this transformation process differs from company to company.

• Input resources can be classified into transformed resources, i.e. those that are treated, transformed and converted in the process, and transforming resources, i.e. those that act upon the transformed resources.

[Optional] Operations Processes: Inputs, Transformations, Outputs
Watch this short 2-minute video about operations processes:
https://www.youtube.com/watch?v=-TvMAf5Zdao
The position of a manufacturing process on the volume-variety continuum shapes its overall design and the general approach to manage its activities.
Enlarged version: http://bit.ly/2ombWBe
The general approaches to designing and managing processes are called process types. In manufacturing operations we have the following major types:

1)
 Project processes: processes that deal with discrete, usually highly customized products. Each project is unique.

2) Jobbing (job shop) processes: deal with high variety and low volumes, although there may be some repetition of flow and activities. Products are usually smaller in comparison to projects.

3) Batch processes: treat batches of products together, on which each batch has its own process route.

4) Mass processes: produce goods in high volume and relatively low variety.

5) Continuous process: produce goods in high volume and low variety, usually in an endless flow. Examples: petrochemicals and electricity.

[Optional] Methods of Production
Watch this 8-minute video about methods of production:
https://www.youtube.com/watch?v=ZQ0m2dmLLcM
Service Processes are also shaped by the volume-variety continuum.
Enlarged version: http://bit.ly/2oXM2lT
In service operations, we observe the following major process types:

• Professional services: are devoted to producing knowledge-based or advice-based service, usually involving high customer contact and high customization. Examples: management consultants, lawyers, architects etc.

• Service shops: positioned between professional services and mass services, usually with medium levels of volume and customization.

• Mass services: services that have a high number of transactions, often involving limited customization. Examples: mass transportation services, call centers etc.

Product (or service) and processes must be matched in order to be able to achieve efficient operations.
Deviating from the natural fit region has consequences for cost and flexibility.

Enlarged version: http://bit.ly/2omxWvZ

Analyzing the Product-Process Matrix
• Operations that are on the right of the ‘natural fit’ region have processes which would normally be associated with lower volumes and higher variety. They are not taking advantage of their ability to standardize their processes. Because of this, their costs are likely to be higher than they would be with a process that was closer to the diagonal.
Analyzing the Product-Process Matrix
• Conversely, operations that are on the left of the diagonal are ‘over standardized’ and probably too inflexible, which can also lead to high costs because the process will not be able to change from one activity to another as efficiently as a more flexible process.
[Optional] The Product-Process Matrix 
Jim Rohn