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12890 Contract Logistics Cost Model

Warehousing Costing methods vary with the business models. While some warehouses using common shared facilities may be worked up based on transaction costs, dedicated and stand alone facilities would be on a different costing model. In this section, we shall go through the cost elements of a warehouse project briefly. Warehouse Cost elements are primarily […]

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Introduction

The objective of organization is to provide service and product, which satisfy customer and create value for them. A product and service designed is based on the customer feedback and requirement of the market.

Process design is where the product is broken down into parts, which further can be helpful in the actual manufacturing process.

A product, for example, has attractive packaging to provide the right aesthetics plus has function and features, which provide value to customers. Process design ensures that there is smooth and continuous relationship between required output and all the intermediate process.

For example, manufacturing of Air-Conditioners, process design has to be such that maximum supply is achieved during the hot months of summer when demand of the product is at the highest. So people, process and machines need to align to give continuous production throughout the year as to satisfy seasonal demand.

Process Planning

Process Design and Analysis

Process development for process design can be summarized through following steps:

  1. Process Requirement: The very 1st step is to collect and gather information to give structure with the end objective. That is to make process requirement document highlighting various stages, risk and stakeholders for production. This will include assessment of available technology, raw material requirement, factory/plant layout and demand forecast.

  2. Team Building: Once the process requirements are finalized, for each objective, a team is finalized based on skill level and experience. Function of the team is to get familiarize with the whole process.

  3. Planning and Implementation: Process planning team will develop module; policies and procedure require for production, which are after required approval internal as well as external is implemented.

  4. Audit: A regular audit is carried out to ensure that process thus implemented is in line and delivering value to customers.

  5. End of Life: Over a course of time there may be enhancement of the product or product may get discontinued in these circumstances, process thus develop is discontinued.

Production Process

Based on the nature of product and service production or conversion process can be divided into two broad categories, continuous production (assembly line, oil refinery) and intermittent production (job work, service).

Production process for both manufacturing industry and service industry can be classified into broad categories based on standardization of product or service. It can range from single project assignment like a building or bridge (manufacturing) to interior design (service) and mass production project like a car (manufacturing) to a fast-food joint (Services).

Process Design

A successful process design has to take into account the appropriateness of the process to overall organization objective. Process design requires a broad view of the whole organization and should not have a myopic outlook. And the process should deliver customer value with constant involvement of the management at various stages.

In order to achieve a good process design, effective process strategy is required, which deals with a singular line items required to manufacture the end product. Effective process strategy deals with raw material procurement, customer participation, technology investment, etc.

Over a period of time process design has undergone change and new concepts like Flexible Manufacturing Systems have been developed, which delivers efficient and effective production design and analysis.

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