Process Strategy & Analysis

Chapter- 2 (MGT-307)
Faria Kabir
Assistant Professor
Department of Business Administration
Stamford University Bangladesh

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 Contents
• Process Strategy
• Process Decisions
• Process Structure in Services
• Service Process Structuring
• Process Structure in Manufacturing
• Manufacturing Process Structuring
• Customer Involvement

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 Process Strategy
• Process Strategy:
The pattern of decisions made in managing processes so
that they will achieve competitive priorities (C, Q, T & F).
• Process strategy decides,
1.Process structure: the way production of goods or
services will be organized
2.Customer Involvement
3.What degree of resource flexibility?
4.Capital Intensity: Cost of Equipment & using human skills

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 Process Decisions
• Four basic process decision
1. Process structure
 What kind of process relative to resources needed?
 How should these resources be arranged (Layout)?
2. Customer involvement
 When ?
 How much ?
 How specially treated?

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 Process Decisions (Cont…)
3. Resource flexibility
 Variety of products produced
 Level of output required
 Number of tasks performed
4.Capital intensity
 Equipment versus Human skill

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 Process Structure in Services
What is customer contact ?
The extent to which the customer is present,
actively involved personal attention during
the service process. Such as, face to face
interaction brings the service provider and
customer together.

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 5 DIMENSIONS OF CUSTOMER CONTACT IN
SERVICE PROCESSES
Dimension High Contact Low Contact Example
1. Physical Customer Present Absent High –Regular Class
Presence Low- distant
learning
2. What is People Possessions or People- Students
processed? information Possessions –
service on product

3.. Contact Active, visible Passive Active –Beauty

Intensity Salon
Passive- providing
lecture materials
on Google
classroom /email

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5 DIMENSIONS OF CUSTOMER CONTACT IN
SERVICE PROCESSES (Cont….)
Dimension High Contact Low Contact Example
4. Personal Personal Impersonal In airline
Attention service
Personal-
Business class
Impersonal –
Economic class
5. Method of Face to Face Regular mail or Face to Face –
Delivery email, Customer care
Regular mail or
email- push
massages
through email
about new
services etc.

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 Customer Contact Matrix
• The customer contact matrix is the starting
point for evaluating and improving a service
process.
• Three elements are essential to understand
customer contact matrix:
a. Degree of customer contact
b. Customization
c. Process characteristics
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 Customer Contact Matrix (cont..)
a) Degree of customer contact
We have already discussed the five dimensions
of customer contact in to a table.
b) Customization: Satisfying the unique needs of
each customer by changing service design.
Example:

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 Customer Contact Matrix (cont…
Example of customized :
Regular Masks Customized Mask

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 Customer Contact Matrix (cont…)
c) Process characteristics –
two types of process characteristics
I. Line flow
II. Flexible flow
• Line flow- worked in a fixed sequence and customers
get their service or information on regular basis.
Example : set menu in restaurant service (Fixed option).
Always remember in line flow the level of
customization is low.

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 Process characteristics
• Flexible flow- the customers, materials or information
move in divers ways. This process always focus customer
requirements and design the process according to the
choice of customers. This process does not worked like
line flow and it varies because customers choice are
unique.
Example: in a restaurant customer place their order
according their own choices from the menu provided by
the restaurant.
Always remember in this flow of process the Customization
is very high.
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 Service Process Structuring
1. Front Office: (Customization high & Flexible flow)
High customer contact where the service provider
interacts directly with the customer. Because of the
customization..., many of the steps in it have
considerable customization and workflows are flexible.
2.Hybrid Office: (Customization Moderate & Line flow)
It has moderate levels of customer contact and standard
services, with some options available...The workflow
progresses from one workstation to the next, with
some dominant paths apparent.
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 Service Process Structuring (Cont..)

3.Back Office: (Customization low , standard

process with strict line flow)
It has low customer contact and little service
customization. The work is standardized and
routine, with line flows from one service
provider to the next until the service is
completed.

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Process Structure in Manufacturing
• Product Process Matrix:
In manufacturing organization we focus on thee
elements to create product process matrix,
1. Volume (amount of production)
2. Product Customization (satisfying unique
needs of customer)
3. Process Characteristics (line flow and flexible
flow)
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 Manufacturing Process Structuring
1. Job process : Sports Car
Jewelry Manufacturing
Business

Job process is highly customized and process flow is flexible .

Customer Order varies & volume low.
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 Manufacturing Process Structuring
2. Batch Process:

Volume high, line flow, reduce set up cost , reduce per

Unit cost and the pattern of process flow is standardized/routine.

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 Manufacturing Process Structuring
3. Line Process : combination of batch and continues
flow process. Volume are High and process is line with
specialized equipments.

ELECTRONIC COMPANY TOY FACTORY

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 Manufacturing Process Structuring
4. Continuous flow process-
High volume standardized process, rigid line flow, one primary material
moves without stopping through the process, customization is very low.

Pharmaceutical products Gas, liquid or powder Soft drinks

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 Customer Involvement
(Self Study)
Possible Advantages:
• Increased net value to the customer
• Better quality, faster delivery, greater
flexibility, and lower cost
• Reduction in product, shipping, and inventory
costs
• Coordination across the supply chain

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 Customer Involvement (Cont…)
Possible Disadvantages:
• Can be disruptive
• Managing timing and volume can be
challenging
• Quality measurement can be difficult
• Requires interpersonal skills
• Multiple locations maybe necessary

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 Thank you!!!

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