FOUR PROCESS STRATEGY

By: Nhilriza B. Maralit

1. PROCESS STRATEGIES

Process strategies are interventions that are made to make the best out of a business using
currently-available resources rather than outsourcing and having to spend more. It also entails higher
quality assurance and better management. 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.

Process strategies objective is to meet or exceed customer requirements and achieve

competitive advantage. There are four basic process strategies namely: process focus, repetitive focus,
product focus and mass customization focus.

A. Process Focus—production facility organized around processes to facilitate low-volume high-

variety productions. The system is also called ‘job shop´ as the product moves from one
department to another in small batches that are determine by the customer’s order.

All operations are grouped according to the type of process. In a factory these process might be
departments devoted to welding, grinding and painting. In an office the process might be account
payable, sales and payroll. Such facilities are process focused in terms of equipment, layout and
supervision. They provide a high degree of product flexibility as product moves between processes. Each
process is designed to provide a high variety of activities and handle frequent changes. Consequently
they are also called intermittent process.

What are Process strategy main Characteristics?

 Facilities are organized around specific activities or processes

 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

PROS CONS
-Greater product flexibility -More highly trained personal

-More general propose equipment -More difficult production planning and control

-Lower initial capital investment -Low equipment utilization (5%)

-Requires more time if the system operates on

one or more processes at a time

-High Variable costs

 B. 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.

One example of repetitive focused company is McDonalds. McDonald’s has chosen the repetitive
focus strategy for its business model. This strategy allows McDonald’s to use the assembly line
process for its operations. The ergonomically correct kitchen is easily mastered by its employees due
to the repetitive nature of the business. The repetitive focus strategy also requires less skilled
employees while at the same time these employees are given opportunities to excel in different
facets of the company.

Characteristics of a Repetitive focus strategy:

 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

C. Product Process—conversion or further processing of undifferentiated materials such as

petroleum, chemicals, or beer. Follows a predetermined sequence of steps, but flow is
continuous rather than discrete–highly standardized
Other names are Line flow production and Continuous production.

What are Product Focus main characteristics?

 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

PROS CONS
- Lower production cost per unit
Lower product flexibility
Lower but more specialized labor skills
More specialized equipment
Easier production planning and control

Higher equipment utilization (70% to 90%)

D. Mass Customization—suggest a high volume system in which products are built to order.
Build to order means producing to customer orders not forecast. Build-to-order can be a
winning strategy when executed successfully, but high-volume-build to order is difficult.
 Mass customization faces certain challenges such as:

 Product design must be imaginative and fast. It often uses models.

 Process design must be flexible and easy to accommodate changes in both design and
technology. For instance postponement (the delay of any modification as long as
possible) allows for customization late in the production.
 Inventory management requires tight control
 Tight schedules that track orders and materials through design and delivery are another
requirement for mass customization
 Responsive partners in the supply chain can yield effective collaboration.
A typical example of an order management system is that of Dell Computer. The website
(www.dell.com)allows customers interact directly with the company to show up their demands.
Customers, after choosing satisfactory products from many options, just click on the screen to
order those products. Because of the integration of all Dell’s departments from inventory &
manufacturing, to sales, marketing, finance, billing, logistics, etc. through the website, the order
is processed by all those departments at the same time, the outcome is that the customers can
know immediately all terms of the purchase in a very rapid and accurate fashion.

2. SELECTION OF EQUIPMENT

A proper equipment selection is a very important activity for manufacturing systems due to the
fact that improper equipment selection can negatively affect the overall performance and
productivity of a manufacturing system. The outputs of manufacturing system (i.e., the rate, quality
and cost) mostly depend on what kinds of properly selected and implemented equipments are used.
(Ayag and Ozdemir 2006) In addition to this, equipment selection has a major effect on the
companies’ global competitiveness. Using proper equipment can enhance the production process,
provide effective utilization of manpower, increase production, and improve system flexibility. The
importance of equipment selection cannot be overlooked. However, with the wide range of
equipment available today, determination of the best equipment alternative for a given production
scenario is not an easy task (Chan et al. 2001).

Selecting the new equipment is a time-consuming and difficult process, requiring advanced
knowledge and experience deeply. So, the process can be a hard task for engineers and managers,
and also for equipment manufacturer or vendor, to carry out. For a proper and effective evaluation,
the decisionmaker may need a large amount of data to be analyzed and many factors to be
considered (Ayag and Ozdemir 2006).

1. QUALITY. There will be times when you will have to work in a remote location, where the
weather conditions could be unpredictable, unfamiliar or harsh. For example, you could experience
constant rain, snow or hail. These conditions can weaken and damage the heavy-lifting equipment if
they remain exposed to the harsh elements for a prolonged period of time on a regular basis. The
compromised equipment can prove hazardous to the employees working on the site and impact the
integrity of the structure being constructed. Invest in lifting equipment that is made of good quality
materials because they have the ability to resist weakening caused by exposure to harsh conditions
 and punishing weather elements. Moreover, you will save maintenance and repair costs. Always
check the quality and strength of the heavy-lifting equipment before buying.

2. TECHNOLOGY. Embrace technology as it is an ally you want on your side. If you have heavy
equipment that has the latest technology, it will surely impact and enhance the overall performance
of your business. These machines will get more work done in less time and with less manpower as
compared to their ‘non-tech’ counterparts. It also helps in attracting and retaining more business to
the contractors. The work would be smoother, helping them complete the projects faster and on
time. Industrial weighing scales are an example of such technology.

3. FUEL EFFICIENCY. Heavy construction equipment does not come cheap. Not only is it expensive
initially, you will have to shell out high maintenance costs down the line. One way to bring down your
costs is by opting for fuel-efficient machines. Since fuel is one of the major costs in a construction
business, machines that consume less fuel will save you a lot of money in the long term.

4. COSTS. Generally, construction projects span over a long time — ranging from a few months to
even years or decades. Not planning and allocating assets and investments smartly will affect the
overall project and the business. Investing in heavy-lifting machines is a significant part of the
allocated budget. Since some of the heavy-lifting machinery is large in size and boasts of
sophisticated technology, it can make the purchase an expensive affair for your business. Despite
the expenses, it is advisable to invest in them rather than opting for substandard machines as it will
benefit you in the long run. Plan properly and consider the allocated budget as a primary factor
before buying these machines.

5. DEALER. Ensure that you always buy from a reputable dealer. Take your time and check out
numerous dealers before making the purchase. One way to identify a reputable and reliable dealer
is if answers any question you throw his way; if he doesn’t have an answer, he will be honest and get
back to you later with the necessary information. Make sure you also ask about the after-purchase
services being offered.

6. KNOWLEDGE OF USING THE EQUIPMENT. Efficient and reliable lifting equipment will do you no
good if you do not have the skill or dexterity to use it. Working with heavy machinery is quite
challenging and poses a workplace safety hazard if not handled carefully. Ensure that only trained
and specialized machine operators are in-charge of running such machines to keep the workplace
safe and eliminate accidents. If you do not specialize in heavy equipment management, hire an
experienced operator for the same. It would be a wise decision to invest in training your staff.

3. PROCESS ANALYSIS AND DESIGN

A systematic approach to improve our understanding of the business processes of an organization to

assist in the realization of tangible benefits such as cost reduction, process efficiency, and effective
human resource allocation.

There are five different techniques to assists process analysis and design: Flowcharts, Time
Function Mapping, Process Charts, Value Stream Mapping, and Service Blueprinting.
 A. FLOWCHART
A flow chart is a graphical or symbolic representation of a process. Each step in the process is
represented by a different symbol and contains a short description of the process step. The flow chart
symbols are linked together with arrows showing the process flow direction.

A flowchart helps to clarify how things are

currently working and how they could be
improved. It also assists in finding the key
elements of a process, while drawing clear
lines between where one process ends and the
next one starts.

A.1. Top-down
flowchart—in
this type of
flowchart only
the most basic
steps of the process are included (no more than 5 or 6 steps). Major
steps are included at the top of the flowchart in the order that hey
occur in the process. Under each major step there are sub-steps listed in
chronological order too.

The top-down flowchart can be used for planning new processes as well
as examining existing ones. It helps keep people focused on the whole
process instead of getting lost in details. Details can be worked out by
the team members responsible for that part of the process.

A.2. Deployment Flowchart—it shows how the people involved fit together and keep track of what
each person or organization is supposed
to do. In the top of the flowchart the
names of the people or organization
involved in the process are listed.

Under each name we can find the process

which they are related with. If any of the
other people or groups help or advise the
ones with primary responsibility for that
step, there is an oval under the names of
those people or groups that is connected
with the process step.

The completed chart tells not only how

the process operates at each step, but
who is involved and what responsibility
they each have.
A.3. Detailed Flowchart—generally top-down and deployment charts are enough to examine a process,
but sometimes teams need more detail to see where problems are occurring. A detailed flowchart
shows what actually happens at each step in
the process in detail and what happens when
non-standard events occur. It also displays
graphically processes so it is possible to see
redundancies and other wasted effort.

In this type of flowchart a description of the

process step can be found inside each
symbol. Symbols are connected with arrows
showing the direction of flow. Each symbol
should represent only one action or one yes-
no decision. This is what gives the detailed
flowchart its detail. It is also what makes the
creation of detailed flowcharts so time
consuming. A detailed flowchart can be a
powerful tool for examining a process that
has built up needless complexity.

B. TIME FUNCTION MAPPING—it consists of a flowchart with responsible parties on the vertical
axis (deployment flowchart) and a time
line on the horizontal axis. It is especially
useful in identifying time consuming steps
in a process and where most time is lost in
waiting and movement. Waste includes
inspection (if the task is done properly,
then inspection is unnecessary;
transportation (movement of material
within a process may be a necessary evil,
but it adds no value); delay (an asset
sitting idle and taking up space is waste;
storage (unless part of a curing process,
storage is waste).
A time function map is very effective in
baselining a process where the objective
is to reduce the cycle line or the waiting
time. With a time function map you can address the same questions as with a flowchart but in
addition ask: Why does each step take so long to complete?
 C. PROCESS CHARTS—the charting of work flows,
working processes, systems and procedures is a
useful way of recording the essential features of a
work situation for subsequent analysis. Process
Charts are one of the simpler forms of workflow
charting and are still in regular usage but are less
common than they once were. This is unfortunate
since it was the ubiquitous nature of the process
chart that made it a common “language” between
different groups of people and across different
industries.
The simplest form of process chart is known as
an outline process chart and records an
overview or outline of a process. Only those steps of
a process that can be represented by the ASME
symbols of operation and inspection are recorded.
An outline process chart is often a useful first step
to identify key areas of concern before recording
(part of) the process in more detail.

D. VALUE STREAM MAPPING—a value stream can

be defined as all the steps – both value added and
non-value added – required to take a product or
service from its raw materials state and deliver it
to a customer. Through the use of this technique,
it is possible to isolate those steps that affect the
process but do not add any value to it, hence
leading to a lost in efficiency and, finally,
profitability.

There are several steps to do in making a value stream

map:

Step 1: Identify the Product Family: The first step is to

identify the product family you wish to map. The tool to
use for this is a PQPR (Product Quantity / Product
Routing) matrix. This tool will help you identify which
product or in some cases products to focus in on.
Step 2: Create a Current State Value Stream Map: Once identified what to map you must set off and
create a current state value stream map. As the name implies, the point is to explain how things look
today. We are not interested in how things “should” look or were “designed” to look.

Step 3: Create a Future State Value Stream Map: Now that we have a better understanding of the
current state of affairs, we are ready to draw a picture of how we would like things to look in the future.
At this point, you must imagine the perfect workplace and detail it.

Step 4: Create an Action Plan: Now that we know how things are working today and how we would like
to see them working in the future it’s time to form a plan.

Once explained why it is important to rely on Value Stream Mapping, and how to organize them in order
to get the information needed for the company, it is time to focus on how to create this type of maps:

Step 2.1: Calculate take time: This value shows the average unit production time needed to meet
customer demand. Industrial manufacturing lines must have production cycle times at least as short as
the takt time so that production can meet the customer demand. For example, if the customer wants to
buy 10 units per week, the average time to build and unit must be 4 hours (or less) if the units are built
during a 40 hour work week.

Step 2.2: Draw in the customer details: In the right of the document, draw a box representing our
customer and their monthly and/or daily demand along with the takt time as calculated before.

Step 2.3: Focus on the material flow: Focus on the material flow side of things first. This includes the
process boxes and data boxes. In those boxes, it is important to write down the amount of workers who
are performing that part of the process and how much time it is spent in them. These processes are
supposed to add value to the product.

Step 2.4: Add the Inventory/Wait Times: Once you have all the process and data boxes in, it’s time to
add in inventory and/or waiting times. For inventory, we simply count the number of pieces in between
the processes and note them.

We also want to convert these pieces into days’ supply. To do this, we divide the number of pieces by
the average daily demand, which we used to calculate take time. We will note this number on our
timeline to be added in a future step. This is the target time which we want to reduce, as it is wasting
resources and not adding any kind of value to the product.

Step 2.5: Draw in the information flow: In addition to learning about how material flows we also want
to understand how information flows. For example, if it is moves about electronically, we use a lightning
bolt looking arrowed line, whereas if it is communicated manually we use a straight arrowed line. During
this step we also draw in our production control box. In most mass production systems we typically see
several manual information (straight) lines coming out of the MRP box aimed straight at each process
step box. We also add in the information flow from our customers as well as to our suppliers.

Step 2.6: Add in the timeline: We can now add the timeline to the bottom of the value stream map. This
saw tooth looking line helps us separate the value added cycle time (taken from data boxes) from the
non value added time (days’ or hours’ supply info). The last step in the process is to sum up all the
“value-add” cycle times and note them at the end of the timeline. Likewise, we also sum up the
“inventory” times and note that on the timeline. We call the total inventory time the production lead
time (PLT).

To calculate the process cycle efficiency (PCE) we divide the value-add time by the PLT.

E. SERVICE BLUE PRINTING—a process analysis technique that focuses on the customer and the
provider´s interaction with the customer. It can be used for developing new innovative services
as well as for improving existing services. The method is also appropriate for ensuring the
quality of service processes.

It also allows for visualization of the

service development process in its early
stages. In each process step, contact
points between client and firm (and
physical element, if a tangible service)
become visible. It is possible to identify
failure points and discover areas for
innovation as well. This technique eases
the identification of cost saving potentials
and offers an excellent base for further
Service-process management.

The Service Blueprinting is based on the

separation of the service into individual
processes that can be assumed
separately. The process progress chart is
depicted horizontally. Each single component is on a different plane, ordered vertically. Each plane
represents a level of closeness to the client, the higher the level the closer the interaction level is to the
client.

COMPONENTS OF SERVICE BLUEPRINTING:

1. Physical Evidence: For each customer action the physical evidence that customers come in
contact with is described at the very top of the service blueprint. These are all the tangibles that
customers are exposed to that can influence their quality perceptions.
2. Customer actions: This component shows the decision that the customer takes by its own
without the interaction of other person. It includes steps, choices, activities and interactions
that customer performs in the process of purchasing, consuming and evaluating the service
3. Onstage Contact: These actions are face-to-face actions between employees and customers
and they are visible to the customer.
4. Backstage Contact: Steps and activities that occur behind the scene to support onstage
activities. Every step and activity in this stage is invisible to the customer.
5. Support Processes: These are all the activities carried out by individuals and units within the
company who are not contact employees. These activities need to happen in order for the
service to be delivered.
6. Line of interaction: separates the process steps of the service activities that the client carries out
independently
7. Line of visibility: separates the service activities that the client can see from the service activities
which are hidden from view. Above the line, the process components that can be seen, heard,
smelt or perceived are ordered.
8. Line of internal interaction: separates contact employees activities from those of other service
support activities and people