Typical characteristics of process choice Aspects Products and markets Type of product Product range Customer order size

Level of product change required Rate of new product introductions What does a company sell? How are orders won? Order-winners Qualiers Operations Nature of the process Process exibility Operations volumes Dominant utilization Changes in capacity Key operations task Investment and cost Level of capital investment Level of inventory Components/raw materials Work-in-progress Finished goods Percentage of total costs Direct labour Direct materials Site/plant overheads Infrastructure Appropriate organizational Control Style Most important operations management perspective Level of specialist support to operations Decentralized/centralized Entrepreneurial Technical know-how High Decentralized Entrepreneurial Technical know-how Low Centralized Bureaucratic Business High Centralized Bureaucratic Technology Very high Low High Low High Low Low Low High High Very low Very high High As required High1 Low As required/low High1 Low Often medium Very high Planned with buffer stocks/low Low High
2

Project

Jobbing

Batch

Line

Continuous processing

Specials/small range of standards Wide Small High High Capability Delivery speed/unique capability Price/on-time delivery/quality conformance Oriented towards general purpose High Low Mixed Incremental To meet specication/delivery schedules

Specials Wide Small High High Capability Delivery speed/unique capability/repeat business Price/on-time delivery/ quality conformance General purpose High Low Labour Incremental Responsive to changes in specication/delivery date requirements and changes Low On-time delivery/ quality conformance

Standard products Narrow Large Low and within agreed options Low Standard products/ commodities Price On-time delivery/quality conformance Dedicated Low High Plant Stepped change Low-cost operations

Standard products Very narrow Very large None Very low Standard products/ commodities Price On-time delivery/quality conformance Highly dedicated Inexible Very high Plant New facility Low-cost operations

Variable

High

Very high

Planned with buffer stocks Low High3

NOTES 1 This would depend on stage payment arrangements. 2 However, many businesses here only make against customer schedules or on receipt of a customer order. 3 The nished goods inventory in, for instance, oil rening is stored in the postprocessing stages of distribution and at the point of sale.

EXHIBIT 5.16

Selected business implications of process choice