Operations and Information Management

Operations and Information Management

Introduction

Process design implies the process of determining the workflows, the equipment required and the implementation requirements for the particular process of production of a particular product or process. Process design is derived from two major concepts-process and design. Design implies the process of origination and development of a plan, for the developing of a product or a service. Process, on the other hand, denotes the section within an organization, which utilizes the input resources that are used for the transformation of something into output of services or products. Different products and services adopt different process design, on the basis of their requirement. Depending on the nature of the business, the nature of the product, and the nature of the market place, the chosen process design will obviously be different. In relation to this, the present paper presents a comprehensive analysis of the process design. The analysis will involve an extensive discussion of the major factors which influences the manufacturing or process design, of an example of a product or services from a familiar industry. The paper will then analyse how the lean principles could assist the operations managers in optimising efficiencies while minimising cost and improving customer service levels.

Main factors that influence the manufacturing/service process design

As illustrated by Yang, Kuo, Su and Hou (2015), there are several factors, which influence the process design. This implies that the operational managers have to consider several factors before selecting and selecting on the particular design that would be used in the manufacturing or process of a product or services. These factors include the nature of the demand for the product or service, the degree of vertical integration, the degree and level of contact with the customers among other factors. As explained by Ulrich (2003), these factors could be grouped into various major categories such as the nature of the product, the industry in which the firm is operating, and the nature and features of the product market place.

Before extensively analysing the major factors influencing the manufacturing or the service process design, it is necessary to analyse the various process design types. These are discussed below:

Product focused process design

It is a manufacturing or service process in which is arranged according to the sequence of operations which are required for the production of a product or the provision of services. It is also referred to as the ‘production line’, ‘assembly line’ or the ‘flow line’. As illustrated by Yang, Kuo, Su and Hou (2015), the product focused adopts two general forms, which include the discrete units such as the dishwashers and the automobiles. The other form is the process or continuous which applies to the paper, and petrochemical manufacturing.

Process focused design

It is a manufacturing or process design in which the processes are arranged according to the type of the process being undertaken. It implies that similar processes are grouped together. During a manufacturing process, the products or services move from one department to the other department according to the processing requirements of a particular job. Ulrich (2003) noted that it is also referred to as the ‘job shop’  or the ‘intermittent production’. Examples include the machine shop, the auto body repair, or the custom window shopping.

 

Group technology/Cellular manufacturing

In this manufacturing or service process, each of the part produced receives a multi-digit code, which acts as a description of the physical characteristics of that part. Parts which have similar characteristics are grouped into part families. Additionally, the parts in the parts families are typically made on the same machines, by the application of the similar tooling. This production process applies to the jobs shops possessing two main characteristics. These include the degree of parts standardization and having a moderate batch size.

Toyota Vehicle manufacturing process design

More explicitly, these factors could be analysed by looking at the particular product or services produced in a particular industry. The product chosen in this case is the vehicle manufacturing by the Toyota Company. Toyota operates in the automobile industry. As mentioned by Wang and Wright (2009), several factors influences the selection of the process design the Toyota Company applies in the manufacturing of its vehicles. These include the nature of the market in which the vehicle is going to be sold, the automotive industry in which the company operates, the product, which is in this case, the nature of the vehicle being manufactured among other factors.

Toyota applies the product focused or the line flow process design. This is a process design which lies between the batch process design and the continuous process design. The process applies high volumes and standardized products or services. As a result, the resources used in the manufacturing process are organized around the concerned product or service. In this case, the materials move linearly from one sequence to the other, following the fixed sequence that has been put in place. As explained by Waller (2003) there are little inventories which are held between the processes involved vin manufacturing. From this examples, several factors could be deduced to influence the manufacturing or the service design applied in producing a particular product. These factors, which are inclusive of Toyota Motor Manufacturing design are discussed below:

The nature of the product demand

In the production process, the needs and preferences of the customers play a pivotal role. Therefore, most organizations produce products and services with strict consideration of the needs and preferences of the customers. The customers have varying feature needs. Therefore, the manufacturers have to schedule and design their production and manufacturing design, to meet the current and future demands of the customers. In this case, for instance, Toyota company has to adhere to the economically and environmentally friendly vehicles current preferred by their customers. As a result, they structure their production design in a manner that will meet these needs. As illustrated by Johnson, Christensen and Kagermann (2008), the methods applied in the estimation of the future demands in the market apply factors such as seasonality, the growth trends, and the patterns of the demand that have an influence on the future.

Influence of the demand patterns

According to Zhai Shi and Gregory (2007), the demand for products or services experiences different market fluctuations. In most case, the demand falls and rises over a period. The reason for this is that it is influenced by the seasonal fluctuations which in turn has a significant influence on the process design, which is applied in the production process of a product. For instance, the demand for products such as the air conditioners and refrigerators varies from season to season. In this case, the nature of the air conditioner used in during the hot season is different from the one used during the cold season. As a result, the process design applied in the two seasons are significantly different.

Additionally, the demand for the products experiences fluctuations, which in turn affects its price. Therefore, the choice of the process design must meet the adequate capacity of the volume of products needed by the customers. In most case, the process design should offer room for expansion or contraction capacity to keep in line with the demand patterns.

Influence of the price levels

In the production process, the price of a product is considered as an exogenous factor, which is determined by the market. Since the manufacturers do not have control over price, they adopt their product design to suit the price determined by the market. Ulrich (2003) argues that the product-volume or the demand curve has a great influence on the process design. Since the customers are high price sensitive, they have a significant tendency to buy more products at a lower price and fewer products at higher prices.

The degree of vertical integration

As illustrated by Iravani, Van Oyen and Sims (2005), the degree of vertical integration implies the extent in to which the production and the distribution chain are owned and controlled by the same organization. The degree of vertical integration has a direct influence on the manner in which the products and its associated components are produced internally. Lan, Ding, Hong, Huang and Lu (2004) argues that one of the major reason as to why Toyota Company had adopted the line production process design is that it has high vertical integration. This implies that the company carries all the manufacturing and distribution process on its own. Therefore, it has a great control of all the operations of motor vehicle manufacturing.

Wang (2002) advises that there are two types of vertical integration. These are the forward and backward integration. The forward integration implies the expansion of the production ownership to the distribution chain towards the market. Backward integration, on the other hand, implies the expansion towards the sources of supplies. Concerning Toyota Company, its ability to incorporate vertical integration has facilitated flexibility in the manufacturing, which has, in turn, resulted in the increased profits, due to pooling of R&D, centralized overheads and economies of scale. However, Ulrich (2003) warned that vertical integration may not always be an effective determining factor when considering producing components instead of buying them. This is because it may leave the company outdated technologically. Therefore, it is significant for the operations managers to consider the pros and cons associated with vertical integration before its implementation.

Within this context, strategic outsourcing may also be significant. It is also referred to as the lower degree of integration, which encompasses the outsourcing process so as the other manufacturing activities could be able to react quicker to the changes in the customer needs technology as well as the competitor actions.

Flexibility

It is another aspect of the market which has a significant influence on the process design adopted in manufacturing. A flexible firm exercises as a fast response to the changes in the needs and preferences of the customer or the market conditions. For the firms to increase their market share, they ought to be flexible. There are several categories of flexibility. These include product/service flexibility, which implies the ability of the product system to shift from producing one product to another. This is particularly important for the firms, which specializes in the production of more custom-designed products or services, in small lots, by the use of multi-skilled employees or general-purpose equipment. The other category is volume flexibility, which implies the ability of the firm to increase or decrease the production volumes rapidly, in response to the changes in the external environment. It is particularly important for organizations, which produce products whose demand fluctuates significantly, and which is uneconomical to hold a high level of inventory. Therefore, the flexibility needed by the company concerned affects the process design it has adopted. The Toyota manufacturing process design is in line with the product/service design.

Degree of automation

In the past, as illustrated by Hill, Collier, Froehle, Goodale, Metters and Verma (2002), the operations manager has significantly avoided the automation process. The reason for this was the high cost involved in the automation process and the associated difficulties in integrating the automated process to other production process. However, automation is currently considered as a strategic technique for achieving the competitive advantage. Though is considered to be expensive, automation is an effective tool for reducing the labor and other associated coat.

In this case, the level of automation required or effected within the manufacturing process determined the process design be adopted. For instance, a highly automated manufacturing organization adopts the process focused design, line process or the continuous process. Toyota Company manufacturing process falls among these categories since it is highly automated. As illustrated by McCarthy and Anagnostou (2004), the operations managers are mandated with deciding the degree of automation required for their production process. This is also associated with the quality level and the degree of contact with the customers. The quality level of a product or services has a significant influence on its market competitiveness and has a significant influence on the process design within all the stages of production. The required quality level, on the other hand, has a significant influence on the degree of automation and the extent of the customer interactions required within the production process.

How implementation of Lean Principles may assist the Operations Manager/Manageress in optimising efficiencies while minimising cost and improving customer service levels

The lean manufacturing principles also referred to as the lean production principles imply the systematic techniques of eliminating wastes within the manufacturing systems. The principle is centred at the core aspect of maximizing the customers’ value while at the same time minimizing the waste. It simply implies creating more values for the customers with fewer resources. Therefore, an organization applying lean principles should focus on understanding the values of the customers and focus the key principles in increasing it. According to the illustrations presented by Dean and Bowen (2004), the ultimate goal of application of the lean principles is the provision of the perfect value to the customers, through the process of value creation which has a zero waste.

Toyota Lean Principles Implementation

Form the above example of the Toyota Company manufacturing process design, it is possible to apply the lean principles. The application of these principles would help the Operations Manager/Manageress in optimising efficiencies while minimising cost and improving customer service levels. However, to achieve this, the operations management should focus on the optimization of different assets, technologies, and the vertical departments and focus more on the optimization of the flow of the manufactured vehicles. This would be emphasized through the entire value streams, which flows horizontally across various technologies, assets and departments to the customers.

Additionally, Toyota Company manufacturing process should also focus on eliminating the waste along the entire value stream rather than the isolated points. The reasons for this is that this would lead to the creation of processes which requires the application of less human effort, less capital, less space, and minimal time for manufacturing. Further, eliminating the waste through the entire value streams fewer costs with many limited defects as compared to the traditional business systems. In this case, Toyota Company would be able to respond effectively to the changing needs and desires of the customers accompanied with high quality, low cost, and through throughout times. More importantly, the information management throughout the system would become quite simple and accurate. For the Toyota Company to operations management to optimise efficiencies while minimising cost and improving customer service levels, it is necessary to adopt and implement the five lean manufacturing principles. The adoption and implementation of these principles are discussed below.

Five lean principles

Identification of the customers and specifying the value

This is the starting point, which incorporates the recognition that the only a small proportion of the total time and efforts in any particular firm accounts or adds significant value to the end users. In this case, Toyota company should specify and define the value of its products and services, which are in this case the manufactured vehicles, from the perspectives of the customers. In this case, the company would manage to effectively target and remove all the non-value activities or the wastes. As illustrated by Eastman (2012), the company needs to evaluate the customers’ expenditure, by analysing whether they value to the low-cost to adhere to a tight budget, or to satisfy other additional needs. In this case, Toyota operations manager could rely on the customers’ interviews, feedback as well as others sources to determine what matters to them.

Identifying and Mapping the value stream

As illustrated by De Sa and Zachmann (2009), the value stream implies the entire set of activities across all parts of the organisation involved in jointly delivering the product or service. In the case of Toyota Company, this would represent the comprehensive end-to-end process, which is incorporated in delivering the services to the customers. After the company understands and specifies what is the preferences of their customers, regarding the quality of the vehicles, economy and other aspects, the next aspect involves considering how these services are delivered to the same customers (Picchi and Granja, 2004).

Creating Flow by eliminating the waste

Da Silveira, Borenstein and Fogliatto (2001) asserts that typically, the first mapping of the value stream confirms that approximately five percent of the activities undertaken by a particular organization adds value to the end customers. However, various qualitative researches conducted in the field of management confirms that the value level could rise to the 45 percent in the service industry or environment. Aurich, Fuchs and Wagenknecht (2006) indicated that elimination of this waste could ensure that the products and services produced within the organization portrays a significant ‘flow’ to the customers without any level of interruption, waiting or detour. This would be the most significant section of Toyota Company manufacturing operations as it would concentrate on eliminating the waste, which would, in turn, result to increase the value of the customers.

 

Responding to the customer pull

In this case, the Toyota Company should concentrate on the process of understanding the demands of the customers to its products and services. The company would then effectively responding by designing the manufacturing process and delivery of the services in a manner that effectively satisfies or meets the needs of these customers (Bhasin, 2013). More specifically, the operations management in the Toyota Company should ensure that he or she produces a vehicle that is needed by the customers, and when the customers need it.

Pursuing Perfection

This represents the last lean principle in which the Toyota Company would create the flow and pull starts through radical reorganizations of the individual process systems. In this case, the gains from the adoption and implementation of the lean manufacturing principles would become significantly great since all the steps would be effectively be interlinked. In the process, additional layers would progressively become visible, and the theory would effectively progress to the point of the theoretical end point of perfection. Additionally, every asset of the company and every action would significantly add value to the end users.

It is evident that from the adoption and implementation of the above lean manufacturing principles, it would significantly assist the operations manager/manageress in optimising efficiencies while minimising cost and improving customer service levels. In this case, Toyota company would have implemented the philosophy regarded as the “just the way things are done.”

Conclusion

From the above analysis, it is evident that process design implies the process of determining the workflows, the equipment required and the implementation requirements for the particular process of production of a particular product or process. Process design is derived from two major concepts-process and design. Design implies the process of origination and development of a plan, for the developing of a product or a service. The process, on the other hand, denotes the section within an organization, which utilizes the input resources that are used for the transformation of something into the output of services or products. There are several factors, which influence the process design. Under consideration to Toyota Company as an example, these factors include The nature of the product demand, the influence of the demand market, The degree of vertical integration, flexibility as well as the degree of automation. The implementation of Lean principles may assist the operations manager/manageress in optimising efficiencies while minimising cost and improving customer service levels. These would be achieved through This would be emphasized through the entire value streams, which flows horizontally across various technologies, assets and departments to the customers. The principles that would be implemented include identification of the customers and specifying the value, responding to the customer pull, and pursuing Perfection. It would also include identifying and mapping the value stream and creating flow by eliminating the waste.

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