Process Strategy & Analysis – Exam Quick Notes

Key Definitions

• Process Strategy: pattern of decisions guiding processes to achieve competitive priorities.
• Process Analysis: detailed documentation & evaluation to redesign work.

Major Process Strategy Decisions

• Process structure: type, layout, resource partitioning.
• Customer involvement: degree & mode of customer participation.
• Resource flexibility: adaptability of workforce & equipment.
• Capital intensity: human vs equipment mix; automation level.

Service Process Structure

• Dimensions: customer contact, customization, process divergence, flow.
• Customer-Contact Matrix positions services on contact vs process divergence.
• Structuring categories:
  • Front Office – high contact, customized.
  • Hybrid Office – moderate contact, some options.
  • Back Office – low contact, standardized.

Manufacturing Process Structure

• Process choices (low → high volume): Job → Batch (small/large) → Line → Continuous-Flow.
• Product-Process Matrix aligns process choice with product volume/variety.

Production & Inventory Strategies

• Design-to-Order: unique specs.
• Make-to-Order: start after order.
• Assemble-to-Order: build from standard modules; postponement, mass customization.
• Make-to-Stock: produce for inventory; mass production.

Layout & Focus

• Layout = physical arrangement of operations.
• Plant Within Plant (PWP), Focused factories/services: isolate segments with distinct priorities.

Decision Patterns & Competitive Priorities

• Low cost → line/continuous, high automation.
• Flexibility/quality → job/batch, flexible workforce/equipment.

Change Strategies

• Process Reengineering: radical, clean-slate redesign for big gains; needs leadership, IT, cross-functional teams.
• Process Improvement: ongoing, incremental.

Six Sigma DMAIC

1. Define scope/boundaries.
2. Measure key metrics.
3. Analyze data to locate causes.
4. Improve by implementing solutions.
5. Control to sustain gains.

Analysis & Measurement Tools

• Flowchart, Service blueprint, Swim-lane chart.
• Process Chart (operation, transport, inspect, delay, store).
• Work Measurement: Time study, Elemental data, Predetermined data, Work sampling, Learning curve.
• Data tools: Checklists, Histograms, Pareto chart, Scatter diagram, Cause-and-Effect (fishbone), Graphs.

Work Measurement Basics

• Normal Time NT = Avg\,time \times Rating\,factor
• Standard Time ST = NT \times (1 + Allowance\%)

Cost & Performance Assessment

• Annual process labor cost = Avg\,time\,(hr) \times Variable\,cost\,(\$/hr) \times Volume

Redesign & Continuous Improvement

• Questioning (What, When, Who, Where, How, Performance?).
• Brainstorming for ideas.
• Benchmarking: Competitive, Functional, Internal; use metrics to compare.
• Implementation pitfalls: poor strategic link, wrong people, vague charters, ignoring people/roll-out, no infrastructure.