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• Process decisions are tactical, focusing on quality, flexibility, time, and cost.
• Process management is ongoing, with identical principles for first-time and redesign choices.
• Innovations include work-simplification programs, statistical process control, and automation.
• Process strategy specifies decisions to achieve competitive priorities.
• Analysis involves identifying opportunities, documenting the process, and redesigning to eliminate gaps for continual improvement.
• Module Time: Allotted for three hours.
• Module Participants: Intended for 3rd-year BSA and BSBA students.

Module Contents

• Processes exist across organizational functions like accounting, finance, and marketing.
• Organizations perform similar business processes that need to be managed.
• A process utilizes resources to provide value, being essential for both service and product creation.

Process Structure in Services

• Strategies differ based on whether a service or product is being designed.
• Services have significant workforce implications in industrialized countries.
• Front-office: High customer contact, flexible workflows, tailored to each customer.
• Hybrid-office: Moderate customer contact, standard services with some options.
• Back-office: Low customer contact, standardized routine tasks
• Customer contact is not normally a consideration for manufacturing processes.
• A strategy for a manufacturing process depends first and foremost on volume.

Process Structure in Manufacturing

• Job process: High flexibility for a wide variety of products, high customization, low volume.
• Batch process: Most common, higher volumes than job processes.
• Line process: High volumes, standardized products, minimal divergence.
• Continuous flow process: Extreme high-volume, standardized production, negligible divergence.
• Make-to-order strategy: Manufacturers make products to customer specifications in low volumes
• Assemble-to-order strategy: Produces a wide variety of products from relatively few subassemblies as customer orders are received.
• Make-to-stock strategy: Manufacturing firms that hold items in stock for immediate delivery, thereby minimizing customer delivery times

Four Common Process Decisions

• Process structure determines the process type, resource allocation, and key characteristics.
• Customer involvement reflects the extent and ways customers become part of the process.
• Managing the timing and volume of customer demands becomes more challenging if the customer is physically present
• Resource flexibility is the ease with which employees and equipment can handle variety.
• Capital intensity is the mix of equipment and human skills, with automation requiring careful examination.

Process Design Philosophies

• Reengineering: Radically redesigning processes for dramatic improvements.
• The key elements of reengineering are critical processes, strong leadership, cross functional teams, information technology, clean-state philosophy and process analysis
• Process improvement: Systematically studying processes for continuous enhancement.
• Process improvement goes on, whether or not a process is reengineered and there is always a better way

Process Analysis Across the Organization

• The organization of of process analysis is documentation and understanding of how work is performed and redesigned.
• Identify opportunities: Pay attention to core processes like supplier and customer relationships.
• Define the Scope: Establish the boundaries of the process to be analyzed.
• Document the Process: List inputs, suppliers, outputs, and customers.
• Evaluate Performance: Use performance measures to find improvement clues, start with competitive priorities.
• Redesign the process: Generate a long list of ideas for improvements. The new design should be documented "as proposed.
• Implement changes - Implementation brings to life the steps needed to bring the redesigned process online.

Process Documentation

• Process documentation involves understanding operations which leads to improvements.
• A flowchart traces the flow of information through a process.
• Swim lane flowchart: Visual representation grouping functional areas into lanes.
• Service blueprint: Flowchart showing high-customer-contact steps and line of visibility.

Work Measurement Techniques

• Estimates are needed for improvement, capacity planning, and scheduling.
• Time study: Trained analyst sets time standard using work elements and timing.
• Elemental standard data: Database of standards for basic elements which estimates the time required for a job.
• Predetermined data approach: Divides each work element into micromotions from a database.
• Work sampling: Estimates time proportion on activities based on observations.
• Learning curve: Displays the relationship between processing time and cumulative quantity.
• Process chart: Documents activities by a person/group, categorized into operation, transportation, inspection, delay, storage.
• Evaluating performance utilizes measurements and a typical process in five categories; operation, transportation, inspection, delay, storage

Evaluating Performance

• The specific metrics are used to evaluate the analyzed process depending the the competitive priority of how efficient the products are produced.
• Capacity utilization, environmental issues, and customer (or job) waiting times reveal where in the process delays are most likely to occur
• Customer satisfaction measures, error rates an scrap rates identify possible quality problems

Metrics For Problem Solving

• Checklist: Records frequency of process failures like errors, delays, waste, and rework.
• Histogram: Summarizes data on a continuous scale, showing frequency distribution of failures.
• Pareto's concept: The 80/20 rule is the ratio of activity is caused (80%) to factors (20%)
• Scatter diagram: Plots two variables to check for relationships; each point is a data observation.
• Cause-and-effect diagram: Relates performance problems to potential causes.
• Graphs: Pictorial formats include line charts and pie charts.

Generating Ideas

• Creativity is stimulated by brainstorming for new ideas.
• Benchmarking measures processes against industry leaders for improvement.
• Competitive benchmarking: Based on direct comparisons with a direct industry competitor.
• Functional benchmarking: Compares areas such as administration.
• Internal benchmarking: Involves using an organizational unit with superior performance as the the benchmark for other units.
• Planning. Identify the process, service to be benchmarked and the firms to compare with
• Analysis. Determine the gap between the current performance and the benchmark firms.
• Integration. Establish goals and obtain the support of managers
• Action. Develop cross-functional teams to implement the plans