Process Strategy and Analysis – Important Points – Summary – Krajewski – 12th Edition

Process Structure in Manufacturing 

Important Point. A new line is suggested

The manufacturing manager has four process choices, which form a continuum, to choose from: (1) job process, (2) batch process, (3) line process, and (4) continuous-flow process (Krajewski et al).

Needs to be changed to 

The manager has five process choices, which form a continuum, to choose from: (1) job process, (2) batch process, (3) line process, (4) lean process and (5) continuous-flow process (Narayana Rao  29 August 2019 ).


Learning Goals –  Process Strategy and Analysis

Process Structure in Services 

Understand the process structure in services and how to position a service process on the customer-contact matrix.

Process Structure in Manufacturing 
Understand the process structure in manufacturing and how to position a manufacturing process on the product process matrix.

Process Strategy Decisions
Explain the major process strategy decisions and their implications for operations.

Strategic Fit 
Discuss how process decisions should strategically fit together.

Strategies for Change
Compare and contrast the two commonly used strategies for change, and understand a systematic way to analyze and improve processes.

Defining, Measuring, and Analyzing the Process
Discuss how to document and evaluate processes.

Redesigning and Managing Process Improvements 
Identify the commonly used approaches for effectively redesigning and managing processes.

Chapter Contents and Important Points – Process Strategy and Analysis

CVS Pharmacy

Processes use the organization’s resources to provide something of value. The output is a product or service.

Process strategy  specifies the pattern of decisions to be made in planning and managing processes so that the processes will achieve their competitive priorities. Process analysis  is the documentation and detailed understanding of the existing process about how work is performed and how it can be redesigned. Process decisions directly affect the process itself by changing process inputs and methods of using them and indirectly the services and the products that it provides. All parts of an organization, as well as external suppliers and customers across the supply chain, need to be involved in process design to ensure that processes are providing the most value to their internal and external customers.

Three principles  are particularly important in process strategy making.
1. The key to successful process decisions is to make choices that fit the situation and that make sense together. In an effective enterprise process, or process chain, each process must have a close strategic fit with the business strategy and also with other processes with which it has interaction.

2. The individual processes are the building blocks that eventually create the firm’s whole supply chain. The cumulative effect of proper design of each process on customer satisfaction and competitive advantage is huge.

3. Whether processes in the supply chain are performed internally or by outside suppliers and
customers, management must pay special attention to the interfaces between processes. Dealing
with these interfaces underscores the need for cross-functional (process) coordination.

Process Structure in Services 

Customer-Contact Matrix
Service Process Structuring

The customer-contact matrix brings together three elements: (1) the degree of customer contact in the process serving him, (2) customization, and (3) service process characteristics. The matrix is the starting point for evaluating and improving a process.

A flexible flow means that the customers, materials, or information move in diverse ways,
with the path of one customer or job often crisscrossing the path that the next one takes.

A line flow means that the customers, materials, or information move linearly from one operation to the next in the process,  according to a fixed sequence. When diversity is low and the process standardized, line flows are a natural consequence.

The manager has three service process structures, which form a continuum, to choose from: (1) front office, (2) hybrid office, and (3) back office.

Process Structure in Manufacturing 
Product-Process Matrix
Manufacturing Process Structuring

In the case of manufacturing good, the product–process matrix brings together three elements:
(1) volume, (2) product customization, and (3) process characteristics.

The manufacturing manager has four process choices, which form a continuum, to choose from: (1) job process, (2) batch process, (3) line process, and (4) continuous-flow process (Krajewski et al).

Needs to be changed to 

The manager has five process choices, which form a continuum, to choose from: (1) job process, (2) batch process, (3) line process, (4) lean process and (5) continuous-flow process (Narayana Rao  29 August 2019 ).

Lean is a line process for multiple products with batch size approaching one. Lean process can be used in various manufacturing processes. A lean index with most desirable value of 1 can be created. Value of 1 is given to a process which used a batch quantity of one. A weighting scheme can be generated to give lean index to a factory.

By defining lean also as a process alternative, design of lean system right from the start of a new production line or system comes into existence. The operation of such greenfield lean process factories or production plants will give ideas on how to convert more legacy processes into lean processes.

Layout  design is based on the manufacturing process. Job and batch processes use process layout. Line and lean processes use line layout or product layout. Continuous processes many times contain flow through pipes.

Production and Inventory Strategies

Design-to-order, make-to-order, assemble-to-order, and make-to-stock strategies are
four approaches to production and inventory creation.

Process Strategy Decisions
Customer Involvement
Resource Flexibility
Capital Intensity

Three other major process strategy decisions are customer involvement, resource flexibility, and capital intensity

Strategic Fit 
Decision Patterns for Service Processes
Decision Patterns for Manufacturing Processes
Gaining Focus
Managerial Practice 2.1 Plants-within-a-Plant at Ford

The four strategic decisions with respect to process: process structure, Customer Involvement, Resource Flexibility, and Capital Intensity need to have fit with competitive strategy or business strategy.

Gaining focus: Plants within plants, focused factories.

Strategies for Change
Process Reengineering
Process Improvement
Process Analysis

Process Reengineering

Reengineering is the fundamental rethinking and radical redesign of processes to improve performance dramatically in terms of cost, quality, service, and speed based on developments in science, technology or process management. Process reengineering is about engineering redesign and is done undertaken as a major project. It would normally involve substantial capital investment

Process Improvement

In engineering and manufacturing process, industrial engineers carry out process improvement to improve productivity. Process improvement is based on the systematic study of the activities and flows of each process to improve it. Productivity science, engineering and management activities are involved in process productivity improvement. Process improvement is based on the   understanding of  the process, and digging out the details. Hence frontline operators have significant ideas to contribute to process improvement. Process improvement is a continuous process and improvements are incremental and keep taking place.

Process Analysis

Process analysis leads to process improvement. To analyze the process, documentation of the process needs to be done of the working of the existing process as taking place in the shop now.  Examining  the strategic issues also can help identify opportunities for improvement apart from operational issues. A gap analysis can be done between a process’s competitive priorities and its current competitive capability requirements.

Defining, Measuring, and Analyzing the Process
Work Measurement Techniques
Process Charts
Data Analysis Tools

Documenting and Evaluating the Process

Three major techniques for effectively documenting and evaluating processes are (1) flowcharts, (2) work measurement techniques, and (3) process charts. They allow you to document  and see how an organization does its work in team discussion. The process operation is recorded to the lowest level and  how well it is performing is also recorded through measurements. Thus, techniques for documenting the process facilitate finding performance gaps, generating ideas for process improvements, and also documenting the look of a redesigned process.

A flowchart traces the flow of information or  customers or  equipment, or materials through the various steps of a process. Flowcharts are also known as flow diagrams, process maps, relationship maps, or blueprints.

Work Measurement Techniques
Process documentation needs estimates of the average time each step in the process would take. Reduction of time is process improvement and hence time estimates or measurements are needed. Time estimates are also needed for  capacity planning, constraint management, performance appraisal, and scheduling.

Estimating task times may be done as reasoned guess, asking a knowledgeable person, or taking notes while  observing the process. There are well developed procedures for the purpose. Measurements can also be ascertained from shop data collected for  cost  accounting and  data recorded in information systems.

Process Charts
A process chart is an organized way of documenting all the activities performed by a person or group of people at a workstation, with a customer, or working with certain materials. It analyzes a process using information about each step in the process. Time estimates are included in process charts.

Redesigning and Managing Process Improvements 
Questioning and Brainstorming

After the process analysis team or design team comes out with conceptual design of redesign of a process, people directly involved in the process are to be brought in to get their ideas and inputs. Frank Gilbreth who initiated the idea of process charts recommended showing process chart of existing process to as many people as possible to get their inputs. Involving process owners and process team members right from the inception of the redesign project by indicating the potential for improvement of the desirable outputs from the process will motivate more persons to contribute their ideas.
Raising questions about each operation of the process in a systematic way to a brainstorming group will give creative ideas to improve the process in the form of alternatives.
The questions in the case an operation of a process are:
What is being done?
Why is it being done?
What equipment is being used?
What tools and workholding are used?
Who is doing it?
How is it being done?
Where is being done?
When is being done?
How well the operation/process being done in comparison to desired measures of performance?
The above questions are followed by why questions and the alternatives that will give better performance. In the case of manufacturing processes, adequate engineering knowledge is essential to get better answers, operations and processes.
Benchmarking is knowing and understanding the operations used by competitors and comparing those operations with internal operations. The idea is to identify concepts that can be profitably employed and make the process superior by the unique ways embedded in the internal process.
The chapter gives seven mistakes that are to be avoided in process improvement implementation. The mistakes are identified by Geary Rummler and Alan Brache.

Learning Goals in Review

Video Case Process Analysis at Starwood
Case Custom Molds, Inc.
Case José’s Authentic Mexican Restaurant

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