PROCESS

STRATEGY
GROUP 3
VANGIE DAGTA
MARYANNE DELA CRUZ
RUSSELL DIONISIO
 Table of contents

01 02 03
Benefits of 4 Types of
Process Strategy Process Strategy
Process Strategy
01
What is Process
Strategy?
Process Strategy
A process strategy is a comprehensive
plan that an organization implements to
produce goods or services efficiently and
effectively. It involves designing the
production process, determining the
sequence of activities, and selecting the
necessary resources to meet the business
goals and customer requirements.
Process Strategy

Objectives:
How to produce a product or provide a service that:
• Meets or exceeds customer requirements
• Meets cost and managerial goals

Has a long term effects on:

• Efficiency and production flexibility
• Costs and quality
Importance of Process Strategy

The importance of a process strategy lies in its ability to drive

efficiency, quality, and adaptability within an organization. It
ensures that resources are used optimally, costs are controlled, and
customer needs are met, ultimately contributing to the long-term
success and sustainability of the business. A well-executed process
strategy is a cornerstone of operational excellence and competitive
advantage in today’s dynamic market environment.
02
Benefits of
Process
Strategy
Benefits of Process Strategy

Decreases cost: A lack of a documented process might result in surplus

goods, materials and time consumption. When employees have a process to
follow, the cost of producing a product and delivering a service decreases,
resulting in a higher profit margin.

Increases output: When a company follows a process, it allows for

increasing the output of goods or products while reducing the time for
production. This ensures companies can produce more products in less time
frame.
Benefits of Process Strategy

Increases efficiency: A well-defined process ensures employees can

complete their job in less time and deliver better results. By following a
process, it becomes easier to create products and provide service to
customers.

Provides consistent quality: With a strategy, the quality of products and

services can remain the same. As customers expect a company to provide
the same quality regardless of the production method, having a strategy can
provide consistent quality.
03
4 Types of
Process
Strategy
 4 Types of Process Strategy

01 03
Process Focus Product Focus
02 04
Repetitive Mass
Focus Customization
Process Focus

• A production facility organized around processes to facilitate low-volume,

high-variety productions.

• Can customized products or services.

• Flexible and skilled workforce.

• All operations are grouped according to the type of process.

• It is usually used to produce small quantity of different items on general

purpose machines.
Process Focus

Main Characteristics of the Process Focus

• Facilities are organized around specific activities or processes.

• General purpose equipment and skilled personnel.

• High degree of product flexibility.

• Typically high costs and low equipment utilization

• Product flows may vary considerably making planning and scheduling a

challenge.
Process Focus

Example of the Process Focus

• Custom furniture manufacturing.

• Specialized machine shops.

• Hospitals (different departments for different types of treatments).

Process Focus

Advantages of Process Focus

• Flexibility to meet unique customer requirements.

• Ability to handle a wide variety of products or services.

Disadvantages of Process Focus

• Higher production costs due to low economies of scale.

• Complex scheduling and high variable costs.

Repetitive Focus

• Facilities often organized as assembly lines.

• Characterized by modules with parts and assembly lines made previously.

• Standardized products with options for customization.

• Less flexibility than process-focused facilities but more efficient.

• Moderate variety, moderate volume.

Repetitive Focus

Example of the Repetitive Focus

• Automobile manufacturing.

• Home appliance production.

• Fast food restaurants (e.g., McDonald's assembly-line food preparation).

Repetitive Focus

Advantages of Repetitive Focus

• Efficient production with some flexibility.

• Lower cost per unit compared to process focus.

Disadvantages of Repetitive Focus

• Less flexibility than process-focused strategies.

• Potential for higher inventory levels.

Product Focus

• Facilities are organized by products.

• High volume but low variety of products.

• Typically high fixed cost but low variable cost.

• Generally less skilled labor.

• Continuous production runs enable efficient processes.

Product Focus

Example of the Product Focus

• Oil refining.

• Chemical production.

• Paper manufacturing.
Product Focus

Advantages of Product Focus

• High efficiency and low unit costs due to economies of scale.

• Consistent quality of products.

Disadvantages of Product Focus

• Inflexibility in responding to changes in product design or demand.

• High initial setup costs and capital investment.

Mass Customization

• High volume, high variety of products.

• Customized products at near mass production efficiency.

• Combines the flexibility of a process focus with the efficiency of a product

focus.

• The rapid low-cost production of goods and service to satisfy increasingly

unique customer desires.
Mass Customization

Example of the Mass Customization

• Custom-configured computers (e.g., Dell).

• Custom clothing and footwear (e.g., Nike By You).

• Customized cars (e.g., Mini Cooper).

Mass Customization

Advantages of Mass Customization

• Ability to provide customized products at lower costs.

• Combines the efficiency of product focus with the flexibility of process

focus.

Disadvantages of Mass Customization

• Complex and costly initial setup.

• Requires advanced technology and information systems.

 Thanks!

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