There are different ways to categorize a process. They can be categorized on the basis of orientation, e.g. market orientation or manufacturing process; they may also be categorized on the basis of the production methodology or customer involvement. The various typeset processes are given below:
Processes by Market Orientation: There are four types of processes based on market orientation.
• Make to stock-The goods usually are standard, mature products. As a general rule make to stock products compete primarily on the basis of cost and availability. Example of such products includes most retail goods.
• Assemble to order-products are standard items that are assembled from in stock subassemblies. This allows customers to specify a wide range of options.
• Make to order- are made from previously designs, but are made only after an order has been received. Make to order products are used when the standard product is too costly to stock, have too uncertain demand, or will deteriorate if stocked on shelf.
• Engineer to order-This market orientation is used to make unique products that have not been previously engineered, Extensive customization to suite the customers’ need is possible but only if customer is willing to wait for this addition stage in the value creation process.
Processes as production systems: A production system refers to how an organization organizes material flow using different process technologies. There are five types of production systems:
• Projects: These are one-off projects. It is based on extensive customization that is suited to the customer’s ‘need. Many construction projects, project management contract, shipbuilding and civil engineering projects fall in this category.
• Job shop: Construction is characterized by processing of small batched of a large number of products, most of which require a different set or sequence of processing steps. Production equipment is mostly general purpose to meet the specific customer orders.
• Batch production: Production is in discrete parts that are repeated at regular intervals. Such a structure is generally employed for relatively stable lines of products, each of which is produced in medium volume.
• Assembly Line: It is a mass production process. On assembly line, production follows in a predetermined sequence of steps which are continuous rather than discreet. The product moves from work station to workstation at a controlled rate following the sequence needed to build the product.
• Continuous flow: It is common in the food processing industry, and in industries involving undifferentiated materials. Most bulk products are manufactured using continuous flow production; generally, on-line control and continuous system monitoring is needed.
Cell Manufacturing (Group Technology): A cell is a self sufficient unit, in which all operations required to make components or complete products can be carried out. It is like mini factory within the factory, which is managed by a cell team. Cell layouts can be Ushaped or s segment of a line allowing self organizing, multiskilled group of fewer people to manage the operations.
Flexible manufacturing systems (FMS): Already explained earlier.
Process and customer involvement: Many processes are designed keeping in mind that value is provided by involving the customer in the delivery of the final product. The involvement may range from self service to the customer by deciding the time and place where the service is to be produced. Business organizations are increasingly attempting to involve their customers in the product design by providing them different options for customization. They engage in an active dialogue with customers using new changing technologies. Customers are increasingly becoming partners in creating value. The customers can now decide the time and location where the service or product is to be delivered.
Making Economic Decisions: Engineering economy is the discipline concerned with the economic aspects of engineering. It involves the systematic evaluation of the costs and benefits of proposed technical projects. In reality, any engineering project must be not only physically realizable but also economically feasible. For example, Maruti Udyog has decided that the weight of the Maruti 800 was a critical requirement of the design. How do you choose between plastic composite and steel sheet stock for the auto body panels? The choice of material will dictate the manufacturing process for the body panels as well as manufacturing costs. Some may argue that because the composite body panels will be stronger and was looking for a car that would be low cost so that it could tap the higher end of the two-wheeler users.
It also had to take into account that:
• The customer may not believe that plastics will provide a stronger body option than steel panels, and may not be willing to pay more, and
• A maintenance man may not believe that it is easy to repair composites, and therefore repair and maintenance will cost more.
One might suggest that the above arguments are ridiculously simplistic and that common sense would dictate choosing steel sheets for the framing material. Although the scenario is an exaggeration, it reinforces the idea that the economic factors of a design weight heavily in the design process, and that engineering economy is an integral part of that process, regardless of the engineering discipline.
The focus on economic cost and engineering costs of new product development has great importance. Each different technical solution to a problem constitutes an alternative. Each alternative requires different level of resources to build and causes different levels of resource to be expended. Thus trade-offs must be made during the design of engineered systems.
Engineering economy selects the best alternative based on design for the theme.
• Why do this at all?
• Why do this now?
• Why do it this way?
An engineering cost analysis, in its simplest form, may be no more than a spreadsheet listing the phases found in the product concept through product realization cycles on one axis and identifying the many functional areas, costs, or even software tools on the other.
• In its second generation form, engineering cost analysis software will approximate the costs associated with each phase of the product development realization cycle.
In its ultimate form, the engineering cost analysis will include and improve upon all of systems engineering's current discrete event optimization functions; but, more importantly, it will extend forward in time to include accurate estimates for various design, material, and process selection options. In some instances, it may also include the determination of the optimum product concept to satisfy the intended customer's needs and cost constraints.
Measuring Costs and Identifying Waste: Operations Management is interested in enhancing value. Cost reductions often translate directly into increases in value if they out weight changes in performance. Like the other inputs to the value equation, the costs are composed of a variety of different elements. For example, the costs relevant to the purchase decision could include one or more of several categories.
• Acquisition cost : The purchase price of a car, for instance.
• Repair costs : The cost of replacing a broken part.
• Maintenance costs : The cost of oil changes and tune-ups.
• Operating costs : The cost of gas & tyres.
• Salvage/resale costs : The cost recovered on selling a car.
• Disposal costs : The cost of disposing of a wrecked car.
New Product Development and Economic Cost: The design of a system or product involves the principal task of evolving a form that can support the functions required by the system or product. The design must be optimized with regard to cost, technical requirements and value consideration of the customer. The challenge is to use resources wisely. This has given rise to a number of techniques and created a number of tools that are being practiced in industries , focused to provide the greatest value of the product to the consumers and optimize the production process and capacity, Of the various techniques developed etc.
