February 23, 2009

Operations Management Lesson 2 Exercise

I decided to review two different processes: ordinary credit card production (high volume vs. low variety) and exclusive gold and diamonds credit card creation (low volume vs. high variety).

Normal credit card is a very standardized product. It has predefined size, name font and is created from standard plastic. The process of its production can be characterized as a “Mass process”. This production is performed by the assembly line. This brings high capital costs. But direct labor costs are low due to the high volumes. Most proper Layout type for this process will be Product layout type.

Exclusive gold and diamonds credit card is absolutely opposite product and its production process is different. Here we are talking about very low volumes of production as the jeweler can spend weeks while creating this masterpiece. From the other point of view this brings high variety of the product as different materials and design can be used. The production process can be characterized as a “Project process”. This process involves unique, complex activities. The layout type for this process is “Fixed position layout” as recourses are moved to the product.


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