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
- Define scope/boundaries.
- Measure key metrics.
- Analyze data to locate causes.
- Improve by implementing solutions.
- Control to sustain gains.
- 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\%)
- 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.