5.2 Types of operating processes

	When you look at different types of companies, ranging from a small coffee shop to IBM, it may seem like there are hundreds of different types of processes.
	Some locations are small, and some are large.
	Some though there seem to be large differences between the processes of companies, many have certain processing characteristics in common.
	In this section we will divide these processes into groups with similar characteristics, allowing us to understand problems inherent with each type of process.
	All processes can be grouped into two broad categories: intermittent operations and repetitive operations.
	These two categories differ in almost every way.
	Once we understand these differences, we can easily identify organizations based on the category of process they use.

Intermittent operations.

Intermittent operations are used to produce a variety of products with different processing requirements in lower volumes.

5.2 Types of operating processes

	Examples are an auto body shop, a tool and die shop, or a healthcare facility.
	Because different products have different processing needs, there is no standard route that all products take through the facility.
	Instead, resources are grouped by function and the product is routed to each resource as needed.
	Think about a healthcare facility.
	Each patient, "the product," is routed to different departments as needed.
	To be able to produce products with different processing requirements, intermittent operations tend to be labor intensive rather than capital intensive.
	Workers need to be able to perform different tasks, depending on the processing needs of the products.
	Often we set skilled and semiskilled workers in this environment, with a fair amount of worker discretion in forming their jobs.
	Workers need to be flexible and able to perform different tasks as needed for the different products.
	Equipment in this type of environment is more general-purpose to satisfy different processing requirements.
	Automation tends to be less common because automation is typically product-specific.

5.2 Types of operating processes

	Given that many products are being produced with different processing requirements, it is usually not cost efficient to invest in automation for only one product type.
	Finally, the volume of goods produced is directly tied to the number of customer orders.

Repetitive operations.

	Repetitive operations are used to produce one or a few standardized products in high volume.
	Examples are typical assembly line, cafeteria, or automatic car wash.
	Resources are organized in a line flow to efficiently accommodate production of the product.
	Note that it is possible to arrange resources in a line because there is only one type of product.
	This is directly the opposite of what we find with intermittent operations.
	To efficiently produce large volume of one type of product, these operations tend to be capital intensive rather than labor intensive.
	An example is "mass-production" operations, which usually have much invested in their facilities and equipment to provide a high degree of product consistency.

5.2 Types of operating processes

	Often these facilities rely on automation and technology to improve efficiency and increase output rather than on labor skill.
	The volume produced is usually based on a forecast of future demands rather than on direct customer orders.
	The most common differences between intermittent and repetitive operations relate to two dimensions:

		The amount of product volume produced.
		The degree of product standardization.

	Product volume can range from making a unique product one at a time to producing a large number of products at the same time.
	Product standardization refers to a lack of variety in a particular product.
	Examples of standardized products are white undershirts, calculators, toasters, and television sets.
	The type of operations used, including equipment and labor, is quite different if a company produces one product at a time to customer specifications instead of mass production of one standardized product.

5.2 Types of operating processes

The continuum of process types.

	Dividing processes into two fundamental categories of operations is helpful in our understanding of their general characteristics.
	To be more detailed, we can further divide each category according to product volume and degree of product standardization, as follows.
	Intermittent operations can be divided into project processes and batch processes.
	Repetitive operations can be divided into line processes and continuous processes.
	Figure 5.2 shows a continuum of process types. Next we look at what makes these processes different from each other.

5.2 Types of operating processes

Project processes

		Are used to make one-of-a-kind products exactly to customer specifications.
		These processes are used when there is high customization and low product volume, because each products different.
		Examples can be seen construction, shipbuilding, medical procedures, creation of artwork, custom tailoring, and interior design.
		With project processes the customer is usually involved in deciding on the design of the product.
		The artistic baker you hired to bake a wedding cake to your specifications uses a project process.

Batch processes

		Are used to produce small quantities of products in groups or batches based on customer orders or product specifications.
		They are also known as job shops.
		The volumes of each product produced are still small, and there can still be a high degree of customization.
		Examples can be seen in bakeries, education, and printing shops.

5.2 Types of operating processes

The classes you are taking at the university use a batch process.

Line processes

		Are designed to produce a large volume of a standardized product for mass production.
		They are also known as flow shops, flow lines, or assembly lines.
		With line processes the product that is produced is made in high volume with little or no customization.
		Think of a typical assembly line that produces everything from cars, computers, television sets, shoes, candy bars, even food items.

Continuous processes

		Operate continually to produce a very high volume of a fully standardized product.
		Examples include oil refineries, water treatment plants, and certain paint facilities.
		The products produced by continuous processes are usually in continual rather than discrete units, such as liquid or gas.
		They usually have a single input and a limited number outputs.
		Also, these facilities are usually highly capital intensive and automated.

5.2 Types of operating processes

	Note that both project and batch processes have low product volumes and offer customization.
	The difference is in the volume degree of customization.
	Project processes are more extreme cases of intermittent operations compared to batch processes.
	Also, note that both line and continuous processes primarily produce large volume of standardized products.
	Again, the difference is in volume and degree of standardization.
	Continuous processes are more extreme cases of high volume and product standardization than are line processes.
	Figure 5.2 positions these four process types along the diagonal to show the best process strategies relative to product volume and product customization.
	Companies whose process strategies do not fall along this diagonal may not have made the best process decisions.
	Bear in mind, however, that not all companies fit into only one of these categories: a company may use both batch and project processing to good advantage.
	For example, a bakery that produces breads, cakes, and pastries in batches may also bake and decorate cakes to order.