7
C H A P T E R
Process Strategy
DISCUSSION QUESTIONS
2.
Product
Likely Process
facilities
(g) Motorcycles
Modular/Repetitive
3. Service blueprinting is a process analysis technique that
4. Process redesign, or reengineering is the rethinking and
radical design of business processes to bring about dramatic
improvements in performance.
5. Techniques for improving service productivity include sepa-
6. The four quadrants are:
(3) Service factory (low interaction/customization; low
labor intensity)
7. CIM (computer-integrated manufacturing) in its ideal but
seldom realized form, ties together computer-aided design (CAD),
LO 7.5: Identify recent advances in production technology
AACSB: Reflective thinking
9. Manufacturing firms in each of the process models:
◼ Repetitive focus, Harley-Davidson
AACSB: Application of knowledge
10. Competitive advantage of manufacturing firms in each of
local print shop, or the machining competence at Illinois
◼ Mass customization, low cost, rapid response to unique
11. Students may find Figures 7.1, 7.2, and 7.8 and the related
discussions helpful with this question. Service firms in each of the
102 CHAPTER 7 PROCESS ST R AT EG Y
12. Competitive advantage of service firms in each process model:
◼ Process focus for a general-purpose hospital: specialization
of expertise in each hospital discipline, x-ray, physical
◼ Product focus: Shouldice Hospital, Southwest Airlines, and
online stockbrokers may be good examples of low-cost
13. Numerically controlled machinery means the equipment is
computer controlled via programming languages. As an added
14. In an automatic identification system (AIS), bar codes, radio
frequency (RF) signals, and optical signals improve both accuracy
control, vision systems, robots, automated storage and retrieval
(CIM) system. A CIM includes elements of computer-aided design,
computer-aided engineering, computer-aided drafting, production,
AACSB: Application of knowledge
LO 7.5: Identify recent advances in production technology
AACSB: Application of knowledge
18. Additive manufacturing adds material (rather than removing
19. The advantages of 3D printing (additive manufacturing)
include the ability to produce complex products that traditionally
well as final products made in this manner have little or no history
as to strength, durability, and design functionality; therefore,
that this is not a nice way to treat animals.
However, to get things in perspective, you might point out that
Animals reap violence on others in their food chain.
1. Suppose Kleber Enterprises wants to lower the point of indif-
ference between Software A and Software B to 2,000 units. What
CHAPTER 7 PRO CESS STRA T EG Y 103
2. Examine the graph. If the expected volume is 1,500 reports,
2.18x = 15,000
104 CHAPTER 7 PROCESS ST R AT EG Y
7.9 (a) Find break-even points, X.
Fixed cost VC Units
(b) Annual profit using intermittent process:
$[120(24,000) – 2,680,000] = $200,000
The intermittent process will maximize profit.
Annual profit: $200,000
7.10 (a) $85,000 + $1.25x = $44,000 + $1.75x
7.11 (a) $ 75,000 + $16x = $60,000 + $20x
7.13# (a) A fun topic, as students will add a lot of waiting. Flow
is, of course, dependent upon the school but usually in-
cludes the following:
Anticipated Intermittent
production process
volume break-even point
(b) Flow diagram for a car wash:
(c) Flow diagram for a shoe shine (customer perspective, a very
different diagram would be prepared for the operator):
CHAPTER 7 PRO CESS STRA T EG Y 105
7.14
7.15 Time function map of a shoe shine:
7.16# A service blueprint for a shoe shine. (For a discussion of this
particular application, see G.L. Shostack “Designing Services that
Deliver,” Harvard Business Review 62, no. 1, (Jan.–Feb. 1984):
133–139.)
106 CHAPTER 7 PROCESS ST R AT EG Y
1
7.17# Using the value stream map, Figure 7.6, as a starting point,
analyze the opportunity for improvement and develop an improved
process.
Remove inventory, improve throughput by reducing setup,
reduce lot sizes, use pull techniques, and focus on only activities
the customer is willing to pay for. Possible improvements include
(1) driving the lot size down to 500 and trying to lower it even
1. As a production manager for RMC, what do you recommend?
Why?
As production manager, you believe that the inherent
AACSB: Analytical thinking
2. Prepare a case by a conservative plant manager for main–
taining the status quo until the returns are more obvious.
3. Prepare the case for an optimistic sales manager who sug-
gests that you should move ahead with the FMS now.
The optimistic sales manager’s case is that improved deliv-
ery time (i.e., improved throughput) and improved quality
VIDEO CASE STUDIES
PROCESS STRATEGY AT WHEELED COACH
A 7-minute video filmed specifically for this text and case is
available in MyOMLab.
1. The major auto companies are not in the custom design busi-
AACSB: Application of knowledge
3. It is more efficient to prepare work modules and then deliver
them to the assembly line than it would be to produce the
AACSB: Application of knowledge
4. Management sets high expectations for quality and provides
an extensive in-house training program to ensure the proper
talent is available. Because custom products require unique
CHAPTER 7 PRO CESS STRA T EG Y 107
2
3
ALASKA AIRLINES 20-MINUTE BAGGAGE PROCESS—GUARANTEED!
An 8-minute video filmed specifically for this text and case is available in MyOMLab.
1.
2. There are virtually no processes that should not be examined.
This is true not just for the operations area where processes in the
Alaska Airlines for process analysis would include passenger
boarding, cleaning planes between flights, loading food and
the customer. This, of course, adds customer competence and
4. Alaska Airlines uses speed, the 20-minute guarantee, as one
critical measure, as well as the number of lost bags, number of
5. The scanners use the bar code tag on each bag to route and
track the bag. Only via bar code do bags wend their way through
AACSB: Application of knowledge
1. As Diane’s new assistant, you need to flowchart this process.
Explain how the process might be improved once you have
boxes and interconnected lines. (See the Harley-Davidson
on the horizontal axis (Figure 7.4 in text).
The chart on the next page is a version of a traditional flow chart
108 CHAPTER 7 PROCESS ST R AT EG Y
2. If the mother is scheduled for a Caesarean-section birth
(i.e., the baby is removed from the womb surgically), how would
3. If all mothers were electronically (or manually) preregistered,
how would the flowchart change? Redraw the chart to show
4. Describe in detail a process that the hospital could analyze
besides the one mentioned in this case.
Newborn Required Information...” figure below for an example of
how to document information requirements.
Flowchart for Arnold Palmer case study.
CHAPTER 7 PRO CESS STRA T EG Y 109
ADDITIONAL CASE STUDY
(available in MyOMLab)
MATTHEW YACHTS, INC.
This is an excellent case to address the characteristics of process–
oriented vs. repetitive vs. product-oriented production.
1. Matthew Yachts is profitable, thanks to its custom-designed
yachts. Its management experience appears to have yielded a
competitive advantage in custom-designed yachts, hence the
2. Establishing a separate facility with its own labor force, cost-
ing, and procedures may be a good move. Particularly if this