What is Process Strategy?
Process Strategy
The pattern of
decisions made in
managing processes
so that they will
achieve their
competitive priorities
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Process Strategy
Figure 2.1
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Process Structure in Services
• Customer Contact
– The extent to which the customer is present, is actively involved, and
receives personal attention during the service process
• Customization
– Service level ranging from highly customized to standardized
• Process Divergence
– The extent to which the process is highly customized with
considerable latitude as to how its tasks are performed
• Flow
– How the work progresses through the sequence of steps in a process
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Customer-Contact Matrix
Figure 2.2
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Service Process Structuring
• Front Office
• Hybrid Office
• Back Office
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Process Structure in Manufacturing
• Process Choice • Job Process
– A way of structuring
• Batch Process
the process by
organizing resources – Small or Large
around the process or
organizing them • Line Process
around the products.
• Continuous-Flow
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Process Structure in Manufacturing
Figure 2.3
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Production and Inventory Strategies
• Design-to-Order
• Make-to-Order
• Assemble-to-Order
– Postponement
– Mass Customization
• Make-to-Stock
– Mass Production
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Layout
• Layout - The physical arrangement of
operations (or departments) relative to each
other
– Operation - A group of human and capital
resources performing all or part of one or more
processes
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Process Strategy Decisions
• Customer Involvement
• Resource Flexibility
• Capital Intensity
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Customer Involvement
• Possible Advantages
• Increased net value to the customer
• Better quality, faster delivery, greater flexibility, and
lower cost
• Reduction in product, shipping, and inventory costs
• Coordination across the supply chain
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Customer Involvement
• Possible Disadvantages
• Can be disruptive
• Managing timing and volume can be challenging
• Quality measurement can be difficult
• Requires interpersonal skills
• Multiple locations may be necessary
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Resource Flexibility
• Workforce
– Flexible
workforce
• Equipment
– General-purpose
– Special-purpose
Figure 2.4
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Capital Intensity
• Automating Manufacturing Processes
– Fixed Automation
– Flexible (Programmable) Automation
• Automating Service Processes
• Economies of Scope
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Decision Patterns
for Manufacturing Processes
Figure 2.5
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Process Reengineering
• Reengineering
– The fundamental rethinking and radical redesign
of processes to improve performance
dramatically in terms of cost, quality, service, and
speed
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Process Improvement
• Process Improvement
– The systematic study of the activities and flows
of each process to improve it
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