1. PROCESS DESIGN

2. Process Strategy
The pattern of decisions made in managing processes so that they will achieve their competitive priorities A process involves the use of an organization’s resources to provide something of value Guides a variety of process decisions, and in turn, is guided by operations strategy

3. Process Strategy (contd.)
Major process decisions include:
Process Structure
Customer Involvement
Resource Flexibility
Capital Intensity

4. Major Decisions for Effective Process Design

5. Major Process Decisions (contd.)
Process Structure: Determines how processes are designed relative to the kinds of resources needed, how resources are partitioned between them, and their key characteristics Customer Involvement: Refers to the ways in which customers become part of the process and the extent of their participation

6. Major Process Decisions (contd.)
Resource flexibility: The ease with which employees and equipment can handle a wide variety of products, output levels, duties, and functions Capital intensity: The mix of equipment and human skills in a process

7. Process Structure In Services
An effective service process strategy in one situation can be a poor choice in another Strategy chosen for a fast food restaurant may not work for a five-star restaurant, where customers seek leisurely dining experience A good process strategy for a service process depends first and foremost on the type and amount of customer contact

8. Process Structure In Services (contd.)
Customer contact is the extent to which the customer is present, is actively involved, and receives personal attention during the service process At this stage, customer’s perceptions about the quality of the service provided are shaped

9. Process Structure In Services (contd.)
Present
Physical presence
Absent
High Contact
Dimension
Low Contact
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People
What is processed
Possessions
Active, visible
Contact intensity
Passive, out of sight
Personal
Personal attention
Impersonal
Face-to-face
Method of delivery
Regular mail

10. Customer Contact And Process Elements
Active Contact: The customer is very much part of the creation of the service and affects the service process itself Passive Contact: The customer is not involved in tailoring the process to meet special needs or in how the process is performed

11. Customer Contact And Process Elements (contd.)
Process Complexity: The number and intricacy (complication) of the steps required to perform the process Process Divergence: The extent to which the process is highly customized with considerable latitude as to how it is performed

12. Customer Contact And Process Elements (contd.)
Flexible Flow: 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 Line Flow: The customers, materials or information move linearly from one operation to the next, according to a fixed sequence

13. Customer-Contact Matrix For Service Processes
Less Customer Contact and Customization
Service Package
Front office
Hybrid office
Back office
(1) (2) (3)
High interaction with Some interaction with Low interaction with
customers, highly customers, standard customers, standardized
customized service services with some options services
Process
Characteristics
(1)
Flexible flows,
complex work with
many exceptions
(2)
Flexible flows with
some dominant
paths, moderate job complexity with
some exceptions
(3)
Line flows, routine
work easily
understood by
employees
Less Complexity, Less Divergence, More Line Flows

14. Process Structure In Manufacturing
Since products differ from services, a different view on process structure is needed Product-Process Matrix Synchronizes the product to be manufactured with the manufacturing process itself Volume Product customization Process characteristics

15. Product-Process Matrix
(1) (2) (3) (4)
Low-volume Multiple products with low Few major High volume, high
products, made to moderate volume to customer
order
Process
Characteristics
(1)
Customized process, with flexible and unique sequence of tasks
(2)
Disconnected line flows, moderately complex work
(3)
Connected line, highly repetitive work
(4)
Continuous flows
Less complexity, less divergence, and more line flows
Less customization and higher volume
products,
higher vol
standardization,
commodity products
Job
process
Batch processes
Small batch process
Large batch
process
Line
process
Continuous
process

16. Product-Process Matrix (contd.)
A good strategy for a manufacturing process first and foremost depends upon the volume For many manufacturing processes, high product customization means lower volumes Process Choice: The way of structuring the process by organizing resources around the process or products

17. Product-Process Matrix (contd.)
Job Process: A process with the flexibility needed to produce a wide variety of products in significant quantities Batch Process: A process that differs from the job process with respect to volume, variety and quantity

18. Product-Process Matrix (contd.)
Line Process: A process in which the volumes are high and the products are standardized allowing resources to be organized around particular products Continuous Flow Process: The extreme end of high volume standardized production and rigid line flows, with production not starting and stopping for long time intervals

19. Production And Inventory Strategies
Make-to-Order Strategy
Assemble-to-Order Strategy
Postponement
Make-to-Stock Strategy

20. New Service/Product Development Process
Design
Service/Product not
profitable
Need to rethink the
new offering/production
process
Analysis
Development
Post-launch review
Full Launch

21. New Service/Product Development Process (contd.)
Competitive priorities help managers develop products and services that customers want Development of new products/services is vital to the long- term survival of the firm New may either mean introducing a brand new concept or implementing major changes to the existing products/services

22. I. Design Stage
Critical stage as it links the creation of new services/products to the corporate strategy of the firm The corporate strategy specifies the long-term objectives of the firm Ideas for new offerings are proposed and screened for feasibility and market worthiness

23. I. Design Stage (contd.) The ideas specify:
how the customer connects with the service or manufacturing firm;
the benefits and outcomes for the customer; and
the value of the service/product
The proposals also specify how the new offering will be delivered

24. II. Analysis Stage
Involves critical review of the new offering and how it will be produced to make sure that:
it fits the corporate strategy;
is compatible with regulatory standards;
presents an acceptable market risk; and
satisfies the needs of the intended customers
The resource requirements for the new offering must be examined

25. II. Analysis Stage (contd.)
The firm must examine the need to acquire additional resources or expand the supply chain by forming strategic partnership with other firms If the analysis reveals that the new offering has a good market potential and the firm has the capability, the authorization is given to proceed to the development stage

26. III. Development Stage
Required competitive priorities are used as inputs to the design of the processes that will be involved in delivering the new offering Each activity is designed to meet its required competitive priorities as well as to add value After process designing, the market program can be designed Finally, personnel are trained and pilot runs are conducted

27. Concurrent Engineering
Used in order to avoid costly mismatches between the design of a new offering and the capability of the processes Brings product engineers, process engineers, marketers, buyers, information specialists, quality specialists and suppliers together to design a product and the processes that will meet customer expectations

28. IV. Full Launch Stage
Involves coordination of many internal processes as well as those both upstream and downstream in the supply chain Promotion for the new offering starts Briefing to sales personnel is done Distribution process is activated Withdrawal of old products/services Post-launch review (inputs from customers)

29. Quality Function Deployment
As described by Dr. Yoki Akao, QFD is a method to:
transform user demands into design quality;
deploy the functions forming quality;
deploy methods for achieving the design quality into subsystems and component parts, and ultimately to specific elements of the manufacturing process

30. QFD (contd.) Refers to both:
determining what will satisfy the customer; and
translating those customer desires into the target design
The idea is to capture a rich understanding of customer wants and to identify alternative process solutions

31. QFD (contd.)
Used early in the design process to help determine what will satisfy the customer and where to deploy quality efforts A process for determining customer requirements (customer “wants”) and translating them into the attributes (the “hows”) that each functional area can understand and act on

32. House Of Quality
One of the tools of QFD A graphic technique for defining the relationship between customer desires and the product (or service) By defining this relationship, operations managers can build products and processes with features desired by customers Defining this relationship is the first step in building a world-class production system

33. Steps To Building House Of Quality
Identify customer wants (what do prospective customers want in this product?) Identify how the good/service will satisfy customer wants (identify specific product characteristics, features, or attributes and show how they will satisfy customer wants) Relate customer wants to product hows (building matrix)

34. Steps (contd.)
Identify relationships between the firm’s hows (how do our hows tie together?) Develop importance ratings Evaluate competing products (how well do competing products meet customer wants?) Determine the desirable technical attributes, your performance, and the competitor’s performance against these attributes

35. House of Quality Example
You’ve been assigned temporarily to a QFD team. The goal of the team is to develop a new camera design. Build a House of Quality.
© T/Maker Co.

36. House Of Quality (contd.)