Process Strategy & Analysis Students should be able to: 1. Use the customer contact model and the product- process matrix to assess the proper positioning of a firm’s operations. 2. Apply the steps in the systematic approach to process analysis. 3. Flowchart a business process and assess its weaknesses.
Major Decisions for Effective Process Design Customer Involvement Low involvement High involvement Resource Flexibility Specialized Generalized Strategy for Change Process Reengineering Improvement Process Structure Customer-contact position (services) Product-process position (manufacturing) Effective Process Design Vertical Integration In-house Outsource Capital Intensity Low automation High automation
Customer-Contact Model for Processes Front office Hybrid office Back office (1) (2) (3) High interaction with Some interaction with Low interaction with customers, highly customers, standard customers, standardized customized service services with some options services Process Characteristics (1) Jumbled flows, complex work with many exceptions (2) Flexible flows with some dominant paths, moderate job complexity with some exceptions (3) Line flows, routine work easily understood by employees Less Complexity, Less Divergence, More Line Flows Less Customer Contact and Customization Service Package First the framework for the analysis of process alternatives is established. Figure 3.3
Embedding Strategy Into Service Processes Competitive Priorities Process Choice Top quality; customization Front office Low-cost operation; consistent quality; on-time delivery Back office The common denominator for decisions on service processes is customer contact.
Product-Process Matrix for Processes (1) (2) (3) (4) (5) One of a kind Low volume, Multiple Few major High volume products, made low products products, high to customer standardization moderate higher standardization, order volume volume commodity products Process Characteristics (1) Complex and highly customized process, unique sequence of tasks (2) Jumbled flows, complex work with many exceptions (3) Disconnected line flows, moderately complex work (4) Connected line, routine work (5) Continuous flows, highly repetitive work Less Complexity, Less Divergence, More Line Flows Less Customization and Higher Volume Product Design Continuous process Project Line Batch Job First the framework for the analysis of process alternatives is established. Figure 3.6
Embedding Strategy Into Manufacturing Processes Competitive Priorities Process Choice Top quality; on-time delivery; flexibility Job process Low-cost operations; consistent quality; delivery speed Batch, line, continuous Competitive Priorities Production and Inventory Top quality, on time delivery; flexibility Make-to-order Delivery speed; variety Assemble-to-order Low-cost operations; delivery speed Make-to-stock The common denominator for decisions on manufacturing processes is volume.
A Systematic Approach to Process Analysis Define Scope 2 Identify Opportunity 1 Document Process 3 Implement Changes 6 Redesign Process 5 Evaluate Performance 4
Custom Molds Process Analysis 1. Identify the Opportunity (gaps, strategic fit) 2. Define the Scope (boundaries of analysis) 3. Document the Processes (flowcharts) 4. Evaluate the Performance (metrics, measures) 5. Redesign the Process (decisions, actions) 6. Implement the Changes (projects)
How to Draw a Flowchart 1. Describe the process to be charted. 2. Start with a “trigger” event. 3. Note each successive action concisely and clearly. 4. Go with the main flow; put additional detail in other charts. 5. Make cross references to supporting information. 6. Follow the process to a useful conclusion; identify a “target” point.
Plant Layout for Custom Molds, Inc.
Seven Mistakes to Avoid Not connecting to strategic issues. Not involving the right people in the right way. Not giving the design teams a clear charter and then holding them accountable. Not satisfied unless fundamental reengineering changes are made. Not considering the impact on people. Not giving attention to implementation Not creating the infrastructure for continuous process improvement.