Question no:01

What do you understand by process strategy and process analysis?

Process Strategy

Business processes can be considered the heart of an organization: they determine the
efficiency of the company and are responsible for the product lifecycle. It should not surprise
then, that to design a digital solution of any sort and level of complexity, processes will be one
of the three most important actors (together with business challenges and technology).

Digitalization unlocks the potential to disrupt business process management in two ways, by
optimizing current business models leveraging digital enablers, or re-designing new solutions.

The main focus on processes is to address current daily problems, but also to find innovative
ways towards process optimization to the point of anticipating new business challenges.

Our customers recognize among the main criticalities they face every day, the need to break
down silos, to integrate processes, streamline operations and guarantee a consistent workflow
within all the departments. An higher level of security and a better accountability are also
important themes raised in terms of applying digital solutions to business processes.

Process optimization is driven by effective monitoring and control, which can be achieved
today collecting accurate data in real time with different sorts of technologies and elaborating
the information into meaningful analytics. The minimization of human interaction is another
objective to set to gain process optimization, in order to reduce delays and the chance of
human error, automate processes, standardize procedures, improve overall efficiency and
significantly reduce costs.

In order to anticipate future business challenges, it is necessary to put in place a set of

processes that are integrated and at the same time, agile and responsive to change (in the
market, to customer needs, to issues encountered). For this reason, despite the processes are
going to be analytic-centric, we strongly believe that the potential of new technologies such as
mobile applications and knowledge sharing platforms, should be considered in combination to
more business-oriented themes, such as cloud computing and Big Data management, to
anticipate trends and opportunities.
 Process Analysis

Definition: Process Analysis can be understood as the rational breakdown of the production
process into different phases, that turns input into output. It refers to the full-fledged analysis of
the business process, which incorporates a series of logically linked routine activities, that uses
the resources of the organization, to transform an object, with the aim of achieving and
maintaining the process excellence.

Process Analysis is nothing but a review of the entire process flow of an organization to arrive at
a thorough understanding of the process. Further, it is also helpful to set up targets for the
purpose of process improvement, which is possible by eliminating unnecessary activities, reduce
wastage and increasing efficiency. Thus, it ultimately ends up improving the overall performance
of the business activities.

Objectives of Process analysis

1. Identify the factors that make it difficult to understand the process.

2. Ascertain completeness of the process.
3. Remove bottlenecks
4. Find redundancies
5. Ascertain the allocation of resources
6. Check out process time

Question no:02

Write down the four major decisions regarding the process strategy.

Major Decisions for Effective Processes

Another choice is which processes are to be done in-house, and which processes are to be
outsourced—that is, done outside the firm and purchased as materials and services. This decision
helps to define the supply chain, and is covered more fully in subsequent chapters. Supplement
A, “Decision Making Models,” also introduces make-or-buy break-even.
Process decisions directly affect the process itself and indirectly the services and the products
that it provides. Whether dealing with processes for offices, service providers, or manufacturers,
operations managers must consider four common process decisions. Figure 3.1 shows that they
are all important steps toward an effective process design. These four decisions are best
understood at the process or sub-process level, rather than at the firm level.

• Process structure determines the process type relative to the kinds of resources needed,
how resources are partitioned between them, and their key characteristics. A layout,
which is the physical arrangement of operations created from the various processes, puts
these decisions into tangible form.
• Customer involvement reflects the ways in which customers become part of the process
and the extent of their participation.
• Resource flexibility is the ease with which employees and equipment can handle a wide
variety of products, output levels, duties, and functions.
• Capital intensity is the mix of equipment and human skills in a process. The greater the
relative cost of equipment, the greater is the capital intensity.

The concepts that we develop around these four decisions establish a framework within which
we can address the appropriate process design in every situation. There is no “how to” element
here in this chapter. That comes in subsequent chapters that show how to actually design the
processes or modify existing ones. Instead, we establish the patterns of choices that create a good
fit between the four decisions. For example, if you walk through a manufacturing facility where
materials flow smoothly from one work station to the next (which we will define later to be a line
process), you would be tempted to conclude that all processes should be line processes. They
seem so efficient and organized. However, if volumes are low and the products made are
customized, converting to a line process would be a big mistake. When volumes are low and
products are customized, resources must be more flexible to handle a variety of products. The
result is a more disorganized appearance with jobs crisscrossing in many different direct.
A process strategy is an organization’s approach to transforming resources into goods and
services. The objective is to create a process that can produce offerings that meet customer
requirements within cost and other managerial constraints.
The process selected will have a long-term effect on efficiency and flexibility of production, as
well as on cost and quality of the goods produced. Virtually every good or service is made by
using some variation of one of four process
Strategies:

1. Process focus,
2. Repetitive focus,
3. Product focus,
4. Mass customization.

The relationship of these four strategies to volume and variety is shown in Figure 5

1. Process focus:

The vast majority of global production is devoted to making low-volume, high-variety products
in places called “job shops.” Such facilities are organized around specific activities or processes.
In a factory, these processes might be departments devoted to welding, grinding, and painting. In
an office, the processes might be accounts payable, sales, and payroll. In a restaurant, they might
be bar, grill, and bakery. Such facilities are process focused in terms of equipment, layout, and
supervision. They provide a high degree of product flexibility as products move between the
specialized processes. Each process is designed to perform a variety of activities and handle
frequent changes. Consequently, they are also called intermittent processes.

Bullet points:

• Facilities are organized around specific activities or processes (In factory, these processes
might be departments devoted to welding, grinding and painting.)
• 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

2. Repetitive focus:
Repetitive processes, as we saw in the Global Company Profile on Harley-Davidson, use
modules (see Figure 7.2 b). Modules are parts or components previously prepared, often in a
product focused (continuous) process. The repetitive process is the classic assembly line. Widely
used in the assembly of virtually all automobiles and household appliances, it has more structure
and consequently less flexibility than a process-focused facility.
Bullet points:

• Facilities often organized as assembly lines

• Characterized by modules with parts and assemblies made previously
• Modules may be combined for many output options
• Less flexibility than process-focused facilities but more efficient

3. Product focus:
High-volume, low-variety processes are product focused. The facilities are organized around
products. They are also called continuous processes because they have very long, continuous
production runs. Products such as glass, paper, tin sheets, lightbulbs, beer, and potato chips are
made via a continuous process. Some products, such as lightbulbs, are discrete; others, such as
rolls of paper, are made in a continuous flow.
An organization producing the same lightbulb or hot dog bun day after day can organize around
a product. Such an organization has an inherent ability to set standards and maintain a given
quality, as opposed to an organization that is producing unique products every day, such as a
print shop or general-purpose hospital. A product-focused facility produces high volume and low
variety. The specialized nature of the facility requires high fixed cost, but low variable costs
reward high facility utilization.

Bullet Points:

• Facilities are organized by product

• High volume but low variety of products
• Long, continuous production runs enable efficient processes
• Typically, high fixed cost but low variable cost
• Generally, less skilled labor

4. Mass Customization focus:

 Operations managers use mass customization to produce this vast array of goods and services.
Mass customization is the rapid, low-cost production of goods and services that fulfill
increasingly unique customer desires. But mass customization is not just about variety; it is about
making precisely what the customer wants when the customer wants it economically. Mass
customization brings us the variety of products traditionally provided by low- volume
manufacture (a process focus) at the cost of standardized high-volume (product-focused)
production. However, achieving mass customization is a challenge that requires sophisticated
operational capabilities. Building agile processes that rapidly and inexpensively produce custom
products requires a limited product line and modular design. The link between sales, design,
production, supply chain, and logistics must be tight.

Bullet Points:

• The rapid, low-cost production of goods and service to satisfy increasingly unique
customer desires
• Combines the flexibility of a process focus with the efficiency of a product focus