Process Strategy

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When making resource flexibility decisions, you must take into account process divergence and diverse process flows.  

If there is high task divergence and flexible process flows, you will require more flexibility of the process's resources, that is, your employees, facilities, and equipment.[1] Accordingly, employees need to perform a broad range of duties, and equipment must be general purpose. Otherwise, utilisation will be too low for economical operations.

Workforce

One of the decisions you have to make as an operations manager is whether or not to have a flexible workforce, that is, employees that are capable of doing many tasks. However, this can significantly increase costs as employees will require greater skills and therefore more training and education.

The decision to have a flexible workforce can have its advantages. It is often the best way to achieve reliable customer service and alleviateResource flexibility capacity bottlenecks.

The type of workforce you require is also dependent on the need for volume flexibility. For example, when conditions allow for a smooth, stead rate of output, the likely choice is a permanent workforce that expects regular full-time employment.

Alternatively, if the process is subject to hourly, daily, or seasonal peaks and valleys in demand, the use of part-time or temporary employees to supplement a smaller core of full-time employees may be the best solution. However, this approach may not always be practical if knowledge and skill requirements are too high for a temporary worker to grasp quickly.

Equipment

When volumes are low due to high customisation, it is usually best to acquire inexpensive general-purpose equipment. This will keep investment in equipment as well as fixed costs low.

When volumes are high and customisation is low, special-purpose equipment are preferred. Its advantage is low variable unit cost. This efficiency is possible when customisation is low because the equipment can be designed for a narrow range of products or tasks. Its disadvantage is high equipment investment, and thus, high fixed costs. However, if annual volume production is high and these fixed costs are spread over more units, the resulting advantages in low variable costs more than compensate the initial high fixed costs.


[1] Krajewski, L, Ritzman, L & Malhotra, M 2010, Operations management: processes and supply chains, 9th edn, Prentice Hall, N.J.

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Operating Plan

Q.1 Will you be having a flexible workforce i.e. employees that are capable of doing many tasks? If so, why have you chosen this option and what advantages will it provide to your business? Give Answer
Q.2 What is the total cost of all your employees? Give Answer
Q.3 Describe the types of equipment you will be using. Will it be general-purpose or special-purpose equipment? Give Answer
Q.4 What is the total cost of all your equipment? Give Answer