Dell Computer Company

1
Dell Computer Company
How can we make the process of buying a computer
better?

• Sell custom-built PCs directly to consumer
• Build computers rapidly, at low cost, and only
  when ordered
• Integrate the Web into every aspect of its
  business
• Focus research on software designed to make
  installation and configuration of its PCs fast
  and simple

2
Process

• A process is a series of value-added tasks that
  are linked together to convert inputs into a
  product or service to an output
• Processes are coordinated activities that involve
  people, procedures, technology, and
  infrastructure
• An organization is only as effective as its
  processes

3
Process Improvement Tasks

• Select process and define its boundaries
• Observe, document, and map process steps and flow
• Collect Process related data
• Analyze collected data

4
Process Improvement Tasks

• Identify prioritize potential process
  improvements
• Process optimization
• Implement monitor process improvements

5
Obvious Areas for Improvement

• Redundant and unnecessary transportation,
  storage, delay or inspection
• All rework process steps
• Inefficient layouts or flows
• Special tools
• Any complex process

6
Process, Volume, and Variety
Figure 7.1
High Variety one or few units per run, high
variety (allows customization)
Process Focus projects, job shops (machine,
print, carpentry) Standard Register
Mass Customization (difficult to achieve, but
huge rewards) Dell Computer Co.
Changes in Modules modest runs, standardized
modules
Repetitive (autos, motorcycles) Harley Davidson
Changes in Attributes (such as grade, quality,
size, thickness, etc.) long runs only
Product Focus (commercial baked goods, steel,
glass) Nucor Steel
Poor Strategy (Both fixed and variable costs are
high)
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Process Flow Diagram
Figure 7.2
8
Process Strategies

• How to produce a product or provide a service
  that
• Meets or exceeds customer requirements
• Meets cost and managerial goals
• Has long term effects on
• Efficiency and production flexibility
• Costs and quality

9
Process Focus

• Facilities are organized around specific
  activities or processes
• General purpose equipment and skilled personnel
• High degree of product flexibility
• Typically high costs and low equipment
  utilization
• Product flows may vary considerably making
  planning and scheduling a challenge

10
Repetitive Focus

• Facilities often organized as assembly lines
• Characterized by modules with parts and
  assemblies made previously
• Modules may be combined for many output options
• Less flexibility than process-focused facilities
  but more efficient

11
Process Flow Diagram
Figure 7.3
12
Product Focus

• Facilities are organized by product
• High volume but low variety of products
• Long, continuous production runs enable efficient
  processes
• Typically high fixed cost but low variable cost
• Generally less skilled labor

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Product Focus
Nucor Steel Plant
14
Mass Customization

• The rapid, low-cost production of goods and
  service to satisfy increasingly unique customer
  desires
• Combines the flexibility of a process focus with
  the efficiency of a product focus

15
Mass Customization
Figure 7.5
Modular techniques
Effective scheduling techniques
Rapid throughput techniques
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Crossover Charts
Figure 7.6
17
Changing Processes

• Difficult and expensive
• May mean starting over
• Process strategy determines transformation
  strategy for an extended period
• Important to get it right

18
Process Analysis and Design

• Flow Diagrams - Shows the movement of materials
• Time-Function Mapping - Shows flows and time
  frame
• Value Stream Mapping - Shows flows and time and
  value added beyond the immediate organization
• Process Charts - Uses symbols to show key
  activities
• Service Blueprinting - focuses on
  customer/provider interaction

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Time-Function Mapping
Figure 7.7
20
Time-Function Mapping
Figure 7.7
21
Process Chart
Figure 7.8
22
Service Blueprint

• Focuses on the customer and provider interaction
• Defines three levels of interaction
• Each level has different management issues
• Identifies potential failure points

23
Service Blueprint
Level 3
Figure 7.9
24
Process Analysis Tools

• Flowcharts provide a view of the big picture
• Time-function mapping adds rigor and a time
  element
• Value stream analysis extends to customers and
  suppliers
• Process charts show detail
• Service blueprint focuses on customer interaction

25
Service Process Matrix
Figure 7.10
26
Service Process Matrix
27
Improving Service Productivity
Table 7.3
28
Improving Service Productivity
Table 7.3
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Improving Service Productivity
Table 7.3
30
Equipment and Technology

• Often complex decisions
• Possible competitive advantage
• Flexibility
• Stable processes
• May allow enlarging the scope of the processes

31
Improving Service Processes

• Layout
• Product exposure, customer education, product
  enhancement
• Human Resources
• Recruiting and training
• Impact of flexibility

32
Machine Technology

• Increased precision
• Increased productivity
• Increased flexibility
• Improved environmental impact
• Reduced changeover time
• Decreased size
• Reduced power requirements

33
Automatic Identification Systems (AIS)

• Improved data acquisition
• Reduced data entry errors
• Increased speed
• Increased scope of process automation

34
Process Control

• Increased process stability
• Increased process precision
• Real-time provision of information for process
  evaluation
• Data available in many forms

35
Vision Systems

• Particular aid to inspection
• Consistently accurate
• Never bored
• Modest cost
• Superior to individuals performing the same tasks

36
Robots

• Perform monotonous or dangerous tasks
• Perform tasks requiring significant strength or
  endurance
• Generally enhanced consistency and accuracy

37
Automated Storage and Retrieval Systems (ASRS)

• Automated placement and withdrawal of parts and
  products
• Reduced errors and labor
• Particularly useful in inventory and test areas
  of manufacturing firms

38
Automated Guided Vehicle (AGV)

• Electronically guided and controlled carts
• Used for movement of products and/or individuals

39
Flexible Manufacturing Systems (FMS)

• Computer controls both the workstation and the
  material handling equipment
• Enhance flexibility and reduced waste
• Can economically produce low volume at high
  quality
• Reduced changeover time and increased utilization
• Stringent communication requirement between
  components

40
Computer Integrated Manufacturing (CIM)

• Extension of flexible manufacturing systems
• Backwards to engineering and inventory control
• Forward into warehousing and shipping
• Can also include financial and customer service
  areas
• Reducing the distinction between
  low-volume/high-variety, and high-volume/low-varie
  ty production

41
Technology in Services
Table 7.4
42
Technology in Services
Table 7.4
43
Process Redesign

• The fundamental rethinking of business processes
  to bring about dramatic improvements in
  performance
• Relies on reevaluating the purpose of the process
  and questioning both the purpose and the
  underlying assumptions
• Requires reexamination of the basic process and
  its objectives
• Focuses on activities that cross functional lines
• Any process is a candidate for redesign

44
Ethics and Environmentally Friendly Processes
Reduce the negative impact on the environment

• Encourage recycling
• Efficient use of resources
• Reduction of waste by-products
• Use less harmful ingredients
• Use less energy