Bussines Management
B207A Big ideas in organizations
Shaping Business Opportunities I
Block 1
Session 12: Process design
Block 1- Reading 15
The design of processes
Process design- what and why?
Process design is for the set of activities associated with organising the resources needed to effectively produce the product or service. The challenge is not only to design a process that is physically capable of making the product or providing the service, but to design it in a way that takes all aspects of operations performance (cost, speed, quality, etc.) into account. (Walley P. OU Material, B207A)
Reading 15: The design of processes
A step-based approach to process design
Process design is often explained as a series of logical steps, each of which addresses a specific question about the organisation and configuration of a process’s resources:
Reading 15: The design of processes
Source: (Walley P. OU Material, B207A)
Step 1: Understanding the design factors
Process design is influenced by two sets of factors.
(1) The design is influenced by the operations' performance objectives such as quality, speed and cost.
(2) The main drivers are volume of work that needs to go through the process and the variety of outputs from the process.
Reading 15: The design of processes
Step 1: Understanding the design factors
Slack et al. (2010) identify four ‘V’s that influence operations' design:
Volume
Variety
Variation (in demand)
Visibility
Reading 15: The design of processes
Volume
There are key differences in how processes are designed based on the scale. For example, in a fast-food outlet, the process is designed to produce large volumes of almost identical meals.
This is achieved by using automated equipment and dedicating staff to specific roles within the overall process.
This helps achieve the repeatability and standardisation needed for the volume of work.
By contrast, in a boutique restaurant, the volume of the work may be lower, and there will generally be much less systematisation. Staff might be expected to perform more than one type of role. In fact, this type of operation often relies on the skill and flexibility of staff in a way not seen in the fast-food outlet, as staff may be expected to adapt the service they offer dependent on the customer’s individual requests.
Reading 15: The design of processes
Variety
Variety or customisation adds complexity, adds cost and requires more skill. High variety often limits the extent to which a process can be automated and can introduce delays while the process is reconfigured.
For example, a holiday cruise has a low-variety as there are very limited choices of what a customer can choose. On the other hand, a custom-made holiday has more variety and will be more expensive. The holiday agent should have a much greater knowledge of many parts of the world.
Reading 15: The design of processes
Variation (in demand)
Many operations are designed to produce approximately the same quantity of output per day.
For example, for a process for assembling televisions, the work would normally flow through at a fixed rate, with each step in the process taking around the same amount of time. The same number of people come to work each day, performing the same tasks, creating a stable process.
Contrast this with operations that experience significant swings in demand over time. The operation has to build in volume flexibility by storing its output in anticipation of demand.
Managing in a high-variation process is usually more complex.
Reading 15: The design of processes
Visibility
Most of the time when you order a product, you do not see that item being made in the factory. There is a large degree of separation between the customer and the process itself.
This has a number of advantages in terms of the efficiency and smooth running of the process.
By contrast, some operations have high degrees of contact with the customer and this has to be factored into the design.
In healthcare, for example, the service possibly cannot happen unless the patient is present. The operation has to be much more flexible in terms of dealing with the patient when they arrive and the inherent variability of the patients themselves.
These different degrees of visibility in a process mean that sometimes the customer is fully involved (high visibility) and sometimes they might only observe or witness at a distance what the operation is doing (medium visibility).
Reading 15: The design of processes
Example: 4 Vs of banking operations
Reading 15: The design of processes
Step 2: Process choice
Process choice is based on the idea that volume and variety drive the configuration of any operation. Eight process choice types are commonly identified across:
Project processes
Jobbing processes
Batch processes
Mass processes
Continuous processes
For service operations there are:
Professional services
Service shops
Mass services
Reading 15: The design of processes
Project processes
Projects are activities that produce one-off or unique outputs such as in software development, construction, shipbuilding or even producing a film or a book.
Projects are usually characterised by their complexity, long timescale, large scale and the involvement of multi-disciplinary teams.
Project managers work with considerable degrees of autonomy when compared with managers working in other operations environments.
Reading 15: The design of processes
Jobbing processes
Jobbing processes have some elements in common with project processes. These are usually dealing with relatively low volumes of output and the output is tailored to meet the exact needs of the customer.
The main difference between project and jobbing processes is that projects tend to have more dedicated resources applied to them over a period of time, whereas jobbing processes have general-purpose equipment and skilled people switching from one output to another quite quickly.
Reading 15: The design of processes
Batch processes
A very high proportion of manufacturing, possibly as much as 60%, is performed as batch production.
The term ‘batch’ refers to the quantity of items produced, as a group, at the same time.
In a batch facility the equipment will be set up to produce one batch of product and once that batch is complete, the equipment will be reset so that a batch of a different item can be produced using the same resources.
A typical example would be a clothing factory that is producing a hundred or so garments of a particular design in one colour and one size. The factory will then switch to producing other batches in other sizes and/or other colours and other designs. Hence a batch process is best for producing medium levels of volume and medium levels of variety
Reading 15: The design of processes
Mass processes
Almost all high-volume consumer goods are produced in mass processes.
These facilities usually produce very large numbers of items in a relatively small range of varieties using plant and equipment that is dedicated to this one product type.
Where there is variety, it will be very carefully controlled and restricted to minor changes in style, size or colour from a pre-determined set of allowable variations.
Mass processes normally involve the use of larger amounts of automation and technology, with many of the jobs within the process having been simplified to some extent.
Reading 15: The design of processes
Continuous processes
At high-volume facilities such as oil refineries, paper mills and soap powder factories, there is usually a highly automated process that operates 24 hours a day with very little downtime.
The products from these facilities are not seen as many units of discrete items but as one continuous stream of output that emerges from the facility at a steady rate. It is rare to see more than one variety in such a facility.
Once the facility is properly set up, it can operate often for many months without stopping.
The challenge is to maintain supply of raw materials at the input end of the process and deal with the logistics of the output leaving the process and getting to the customer or put into storage.
Reading 15: The design of processes
For services
Professional services – The work of architects, auditors or most lawyers, for example, is dealing with relatively low volumes of output that is highly customised to meet the client’s need. This type of service can only be delivered through a high proportion of time being spent with the client looking at their needs and requirements.
Service shops – Some services have to deal with some inherent variability in what the customer wants from their service experience. For example, if you go to a supermarket, your actual shopping basket will be a slightly customised selection of items the supermarket sells. Hence this type of service has to offer higher levels of volume and less variety than a professional service.
Mass services – Some services have to operate at high volumes and allow work, or customers, to progress steadily through the system with as little delay as possible. For example the security check stage at an airport. There are large numbers of people having exactly the same type of security check with very little variation in the process.
Volume-variety diagram
Reading 15: The design of processes
Figure 3 shows the area on a volume-variety diagram where each manufacturing process choice provides the best degree of fit with volume and variety. Walley (2017) also shows a similar diagram for service operations.
Exercise 2
What are the implications if demand starts with very low volumes and increases over time? Will your process choice need to change?
In most cases the answer is ‘yes’. Market growth (or decline) often presents a big challenge for the design of operations. You cannot normally expand low-volume facilities just by keeping the same configuration but making it bigger. Instead the whole system needs to change. The move from batch production to mass production is also a major step involving process-wide change and changes to skill sets, the use of technology and job design.
Similarly as a product enters the decline phase of its life cycle, mass processes may become inefficient for the volumes needed.
Reading 15: The design of processes
Now go to session 12: Process design and go through the course material and activities in sessions 12.1, 12.2 and 12.3
Session 12: Process design