Chapter 7

Process Strategies
• Many organizations fail to outline and document procedures
when it comes to producing products, handling service
concerns, or guiding their customers along their buyer’s journey.
• Without these documented procedures, employees are forced
to start from scratch every single time, leading to wasted time,
energy, and money — along with stress on your team and
customer frustration
• Several processes could run on autopilot, removing the need
for in-the-moment decisions, escalation to management, and
— in some cases — human involvement altogether.
• Process Strategy can be seen throughout every department
in a successful organization, whether it be sales, production,
operations management, customer service, or retention
• Restaurant Industry
• Let’s look at a production scenario that we’ve probably all found
ourselves in — a fast-casual restaurant like .
• When you step into one of these eateries, you’ll be greeted by an
assembly line of employees waiting to fill your order.
• These restaurants have their process strategy down.
• If they didn’t, you’d see employees tripping over one another and you’d
be lucky to get out of there with your meal in tow.
• A poor process strategy can lead to an angry ex-customer who
was transferred from one department to another and forced to
repeat their problem for each new associate until they finally gave
up and decided to take their business elsewhere.
• A process-focused company will take the time to find the cracks in
their organization and determine what can be done to make
every activity they engage in smoother and more efficient.
• These are the companies that will beat out their competition and
cre.ate customer and employee loyalty
Benefits of Process Strategy in
Operations Management

IMPROVED DECREASED INCREASED CONSISTENT

EFFICIENCY  COST  OUTPUT  QUALITY 
Benefits of Process Strategy in Operations
Management
• When it comes to operations management, an organization’s
focus must be on the most efficient way to produce products
and deliver services.
• Its concern is with every step of development from
conceptualization to delivery. Can you imagine a better place
to incorporate process strategy in an organization?
• The benefits include:
Benefits of Process Strategy in Operations
Management
• The benefits include:
1. Improved Efficiency — Having a solid process strategy will help your
employees complete their jobs in less time and with better results.
Having processes laid out makes everything from product creation
to service delivery run like clockwork.
2. Decreased Cost — When your processes are not yet dialed in, time
and materials are often wasted. Once you’ve got a steady process
strategy for all employees to follow, the cost to produce a product
or provide a service actually decreases leaving more of a profit
margin.
Benefits of Process Strategy in Operations
Management
3. Increased Output — A process strategy provides the opportunity
for you to increase production to create more of whatever it is you
make, spending less time on each step of service provided. As less
time is needed to create a deliverable, more deliverables can be
created.
4. Consistent Quality — Without a process strategy, quality is up to
the whim of an individual employee and can vary greatly from one
person to the next. But your customers are expecting to see the
same quality every time — no matter who is creating or providing
for them.
 A process strategy is an organization’s
What is approach to transforming resources into
goods and services.

process
strategy 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.
 • Process strategy is the pattern of
decisions made in managing
What is processes so that they will achieve
process their competitive priorities.
strategy? • A process involves the use of an
organization's resources to provide
something of value.
 • The objective is to create a process
to produce offerings that meet
Objective customer requirements within cost
and other managerial constraints
 1. Process Focus
Four Process 2. Repetitive Focus
Strategies 3. Product Focus
4. Mass Customization Focus
 • How to produce a product or provide a
service that
Process • Meets or exceeds customer requirements
Strategies (1 • Meets cost and managerial goals

of 2) • Has long-term effects on

• Efficiency and production flexibility
• Costs and quality
Four Process Strategies
• A process or transformation strategy is an organization's
approach to transform resources into goods and services.
• These goods or services are organized around a specific
activity or process. 
• Every organization will have one of the four process strategies:
1. Process Focus
2. Repetitive Focus
3. Product Focus
4. Mass Customization Focus
Four Process Strategies
• Every organization will have one of the four process
strategies:
1. Process focus 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.
• The process focuses on low volume, high variety products are
also called job shop.
• These facilities are process focus in terms of equipment,
layout, and supervision. 
Four Process Strategies
2. Repetitive focus; falls between the product and process focus. The
repetitive process is a product-oriented production process that
uses modules.
• Modules are parts or components of a product previously
manufactured or prepared, often in a continuous process.
• Fast-food firms are an example of repetitive process using
modules. 
Four Process Strategies
3. Product focus, are high volume, low variety processes; also
called continuous processes.
• Products such as light bulbs, rolls of paper, beer, and bolts
are examples of product process.
• This type of facility requires a high fixed cost, but low costs.
The reward is high facility utilization. 
Four Process Strategies
4. Mass customizations focus; is rapid, low-cost production that
caters to constantly changing unique customer desires.
• This process is not only about variety; it is about making precisely
what the customer wants when the customer wants it
economically.
• Achieving mass customization is a challenge that requires
sophisticated operational capabilities.
 Comparison of Processes

PROCESS FOCUS REPETITIVE FOCUS PRODUCT FOCUS MASS CUSTOMIZATION

(LOW-VOLUME, HIGH- (MODULAR; e.g., (HIGH-VOLUME, LOW- (HIGH-VOLUME, HIGH-
VARIETY; e.g., ARNOLD HARLEY-DAVIDSON) VARIETY; e.g., VARIETY; e.g.,
PALMER HOSPITAL) FRITO-LAY) DELL COMPUTER)
 Identify the point where you should switch
from one product or service to another
Crossover one that has similar benefits, but different
Analysis fixed and variable costs

Crossover Charts
The comparison of processes can be further enhanced by
looking at the point where the total cost of the processes
changes.
 Crossover Chart Example (1 of 2)
• Evaluate three different accounting software products
• Calculate crossover points between software A and B and between software B and C

TOTAL FIXED DOLLARS REQUIRED PER

Blank COST ACCOUNTING REPORT
Software $200,000 $60
A
Software B $300,000 $25

Software C $400,000 $10

Crossover Chart Example (2 of 2)
200, 000 +  60 V1 = 300, 000 +  25 V1
35V1 = 100, 000
V1 = 2,857

• Software A is most economical from 0 to 2,857 reports

300, 000 +  25 V2 = 400, 000 + 10 V2

15V2 = 100, 000
V2 = 6, 666

• Software B is most economical from 2,857 to 6,666 reports

Crossover
Charts
Figure 7.3
 Tool for process
Process analysis and
Analysis design
and Design 1.Flowchart
2.Time-Function
Mapping
3.Process Charts
4.Value-Stream Mapping
Flowchart

• A flow chart is a picture (graphical representation) of the problem solving process.

• a schematic or drawing of the movement of material, product, or people.
• gives a step-by-step procedure for solution of a problem
• Example : the flowchart of assembly processes for auto parts assembly, service work.
• Elements of a flowchart:
• Various geometrical shaped boxes represent the steps of the solution.
• Such charts can help understanding, analysis, and communication of a process.
 Flowchart

Uses of a flowchart:
1. To specify the method of
solving a problem.
2. To plan the sequence of a
computer program.
3. Communicate ideas,
solutions.
Time-Function Mapping

How this chart work?

• With time-function mapping, nodes indicate the activities, and the arrows indicate the flow
direction, with time on the horizontal axis.
• Allows users to identify and eliminate waste such as extra steps, duplication,
• Modified flowchart with time added on the horizontal axis.
• Called time-function mapping, or process mapping
• Example, substantial reduction in waiting time and process improvement in order processing
contributed to a savings of 46 days.
• Figure 7.4 shows the use of process mapping before and after process improvement
"Baseline" Time-Function Map Figure 7.4(a)
"Target" Time-Function Map Figure 7.4(b)
Process Charts

• use symbols, time, and distance to provide an objective and

structured way to analyze and record the activities that make
up a proces
• allow us to focus on value-added activities.
• no value allows us to determinethe percent of value added
to total activities
Process Charts

• Figure 7.5(next slide), which includes the present method at a

fast-food restaurant, includes a value-added line to help us
distinguish between value-added activities and waste.
• Identifying all value-added operations (as opposed to
inspection, storage, delay, and transportation, which add
Process Chart Figure 7.5
Value-Stream Mapping
A variation of time-function mapping

Also known ‘value-stream mapping (VSM)’;

• value-stream mapping takes an expanded look at where

value is added (and not added) in the entire production
process, including the supply chain.
• Where value is added in the entire production process,
including the supply chain, extends from the customer back
to the suppliers
 Value-Stream Mapping

• a visual tool that displays all critical steps in a specific process

and easily quantifies the time and volume taken at each stage. 
• Value stream maps show the flow of both materials and
information as they progress through the process
• also known as "material- and information-flow mapping", is a lean
management method for analyzing the current state and designing a
future state for the series of events that take a product or service from
the beginning of the specific process until it reaches the customer.
Value-Stream Mapping

• The purpose of a value stream map is to view

the entirety of a process flow from start to
finish and create a plan to optimize efforts in
getting the company to its desired outcomes.
• By illustrating the current state, a value stream
map allows you to know where there are
current gaps.
Service Blueprint

• First introduced in 1984 by G. Lynn Shostack in the Harvard Business

Review, service blueprint diagrams visually map out the steps in a service
process, making it easier to design a new process or to document and
improve an existing one.
• Service blueprints go several steps deeper and combine the
customer’s experience with all employee actions and support
processes that may or may not be visible to the customer.
• As the name suggests, this diagram helps you design a blueprint of
your service process.
• To be able to innovate and make relevant changes that boost
customer satisfaction, you need to be able to visualize each step and
actor from the customer all the way down to third-party vendors.
Service blueprints simplify this task
Service Blueprinting

• Focuses on the customer and provider interaction

• A customer journey map focus on what customers experience when
they interact with a service or business, from specific actions or
touchpoints to pain points.
•.
 • A variation of time-function mapping
• value-stream mapping (VSM);
• value-stream mapping takes an expanded look
at where value is added (and not added) in the
entire production process, including the supply
Value- chain.
• Where value is added in the entire production
Stream process, including the supply chain, extends
from the customer back to the suppliers
Mapping • Recap with time-function mapping,
• the idea is to start with the customer and
understand the production process, but value-
stream mapping extends the analysis back to
suppliers.
What are some examples of non-value-added
actions?
• There are eight recognized types of waste, known as the
eight wastes.
• They are transportation, inventory, motion, waiting,
overproduction, over-processing, defects, and non-
utilization of the skills or of personnel.
What are some examples of non-value-added
actions?
• In the Lean Management philosophy, all activities in an organization
are grouped into two categories:
1. value-added (VA) activities, and
2. non-value-added (NVA) activities.
• In the context of Lean Management, VA and NVA activities are viewed
from the customer’s perspective.
What are some examples of non-value-added
actions?
• In the context of Lean Management, VA and NVA activities are viewed from
the customer’s perspective.
1. VA activities are those that bring additional value to products or services.
• Examples include entering orders, ordering materials, laying foundations, creating
codes, assembling parts and shipping of goods to customers. 
• Customers are willing to pay for these improvements that can change the form, fit or
function of a product or service.
2. On the other hand, NVA activities are tasks that do not increase market
form or function. 
• Examples are filing, copying, recording, waiting, counting, checking, inspecting,
testing, reviewing and obtaining approvals. These activities should be eliminated,
simplified or reduced.
Service Blueprinting
• A service blueprint is a diagram that visualizes the relationships
between different service components — people, props (physical or
digital evidence), and processes — that are directly tied to
touchpoints in a specific customer journey.
• A service blueprint is an operational planning tool that provides
guidance on how a service will be provided, specifying the physical
evidence, staff actions, and support systems / infrastructure needed
to deliver the service across its different channels.
 • Defines three levels of interaction
• level one are under the control of the customer.
• second level are service provider interacting with
the customer.
• third level - performed away from, and not
Service immediately visible to, the customer.
• Each level suggests different management issues.
Blueprinting • the top level may suggest educating the customer
or modifying expectations,
• second level may require a focus on personnel
selection and training.
• third level lends itself to more typical process
innovations.
Service Blueprint (1 of 2)
Figure 7.7
Service Blueprinting

• Each level has different management issues

• Identifies potential failure points
• Service blueprints should always align to a business goal: reducing
redundancies, improving the employee experience, or converging
siloed processes.
 • Services moving toward specialization and focus
within the service process matrix
• Interaction with the customer often affects process
Special performance adversely.
• Service, by nature, implies that some interaction
Considerations and customization is needed
for Service • Customer’s unique desires tend to play with the
process
Process Design • more the manager designs the process to
accommodate these special requirements, the
more effective and efficient the process will be.
Service
Process
Matrix

Figure 7.8
 • Process reengineering
• The fundamental rethinking of business
processes to bring about dramatic
improvements in performance
1. Relies on reevaluating the purpose of the
Process process and questioning both the
purpose and the underlying assumptions
Redesign 2. Requires reexamination of the basic
process and its objectives
3. Focuses on activities that cross functional
lines
4. Any process is a candidate for redesign
Production
Technology
1. Machine Technology
2. Automatic Identification Systems (AISs) and
RFID 333
3. Process Control
4. Vision Systems
5. Robots
6. Automated Storage and Retrieval Systems
(ASRSs)
7. Automated Guided Vehicles (AGVs)
8. Flexible Manufacturing Systems (FMSs)
9. Computer-Integrated Manuf
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