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Degree of automation Quality level and degree of customer contact A brief description of each of these factors and their influence on the process design decisions of an organization are given below. Nature of Demand The main objective of any production system is to produce products or services, according to customer requirements.
Therefore, it is essential for an organization to schedule its production in such a way that it can always meet estimated future demand levels. We have discussed various methods for estimating future demand by using past sales data in detail in chapter 3. These methods can be used to plan for the production capacities needed in each future time period, taking into account factors like seasonality, growth trends and other such demand patterns that affect future demand levels.
Influence of demand patterns The demand for a product does not follow a fixed pattern over time. The rise or fall of demand over time is influenced by several factors, such as seasonal fluctuations, which affect the design of the production process of the product. For instance, the demand for products like fans, air conditioners and air coolers exhibit great variation from season to season higher during summer and lower in winter.
Decisions regarding the production process and inventory for such products should be made such that peak season demand can be met comfortably.
During the season of sluggish demand too, production should be structured appropriately. The growth trends of a product also influence process design. The processes should be designed to be flexible enough to expand production easily in order to keep pace with growing demand. Influence of price level In most countries, customers are price-sensitive in their purchases.
They buy more of a product when the price is set low, but tend to buy lower volumes when the price level is set high. The price-volume demand curve has many implications in the design of production processes.
For instance, managers decide on the application of different designs for example, customs versus standard designsinventory and shipping policies at different levels of activities in order to produce the quantities demanded at minimal costs.
The design of production processes should take care of all these factors to be effective. Degree of Vertical Integration One of the prime considerations of an operations manager when developing production-process designs is the level of vertical integration.
Vertical integration refers to the extent to which the production and the distribution chain extending from the suppliers of raw materials and components to the delivery of finished products is brought under the ownership of the organization.
In other words, the degree of vertical integration determines the extent to which a product and its components are produced internally. Forward integration is the expansion of ownership of production to the distribution chain, towards the market. Backward integration expands the ownership of the production and distribution chain backwards, i.
Decisions on the degree of forward integration required are predominantly based on the ability of the organization to market its products, whereas those on backward integration are influenced by several other factors see Table. Factors Affecting the Degree of Backward Integration Cost of producing components versus cost of buying them.
Investments necessary to produce components in-house. Anticipated changes in net return on assets, if production of components is undertaken.
The possibility of using existing in-house technology to produce components. Availability of funds to support the integration. Quality of suppliers i. The need to integrate to secure future competitive position. The degree of vertical integration that is optimum for a particular firm in an industry may not always be appropriate for another industry.
Operations managers have to decide whether to attempt vertical integration. If they decide to do so, they will have to decide to what extent they can integrate, depending on the opportunities and risks associated with the integration.
Vertical integration relieves an organization of a part of its purchasing function and provides flexibility in manufacturing. The return on net assets may rise or fall, depending upon the investment necessary to integrate and the amount of increased profits. If organizations do not integrate backward, they may face the risk of suppliers integrating forward and becoming formidable competitors.
However, vertical integration is not always desirable. Decisions to produce components, instead of buying them, may trap organizations in the use of outdated technology. The economies of scale obtained by vertical integration can as easily be obtained by maintaining long-term relationships with suppliers.
By integrating vertically, an organization may diversify its activities so wide that it loses focus, and its overall performance is adversely affected. Operations managers should evaluate all the pros and cons of vertical integration before deciding on its implementation.Design of Production Processes - Factors affecting Process Design Decisions Major Factors affecting Process Design Decisions Operations managers generally make process-design decisions after taking into consideration several factors.
The Factors That Influence The Design Process Construction Essay. There are many factors that can influence the design process. Factors That Influence the Design Process By Natalie June Reilly A lot of forethought, imagination and engineering go into the design process, not to mention the time, determination and energy it takes to see it through to completion.
Factors Affecting Process Design. FACTORS AFFECTING JOB DESIGN Job design is affected by organizational, environmental and behavioral factors.A properly designed job will make it more productive and torosgazete.com a job fails on this count, it must be redesigned based on the feedback.
The manufacturing process is a complex one that can be impacted by many factors: supplies, equipment, factory overhead, the need for special parts, and the people who work at all points in the. The process would change to include the new work times or the external vendor.
Human Factors. People affect the process design. Stress, employee morale and fatigue have an impact on the execution of a process. Leaders should consider these factors when designing the process.