Operations Management

Process Strategy

Vasudev Danait
Professor of Practice – Operations and Supply Chain Management
Process Strategy
• Process Strategy is an Organization's approach to transforming resources
into goods and services
• Process selected will have long term consequences on
• Flexibility
• Efficiency
• Quality and
• cost
• Objective is to create a process that can produce products that
• Meet customer requirements
• Within cost
• At market demand
• And other managerial constraints

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Process Strategy
• Virtually every product is made using one of the four strategies

• Process Focus Low volume Repetitive Process High Volume

• Repetitive Focus
• Product Focus

High
• Mass Customization Process Focus Mass
(Job Shop) Customisation
Repetitive
Process
Low Variety

Poor Strategy Product Focus

Variety

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Process Focus
• Vast majority of global production is devoted
to making low volume high variety products
in places called Job Shops.
• They are organized based on various
operations like welding, grinding, cutting,
painting etc
• In offices it could be like payroll, training,
accounts receivable etc
• In hotel it could be bar, grill, bakery etc
• In hospitals it could be various OPD clinics,
Diagnostic labs, OT etc.
• They provide high degree of flexibility as
products move from one department to
another to get processed
• Process focused facilities have high degree of
variable costs and very low utilization

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Repetitive Focus

• Repetitive Process is the classic assembly line widely used in automobile

and white goods industry
• It has more structure and less flexibility than process focused facility
• Fast food restaurants are example of this in service industry

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Product Focus
• High volume low variety processes are product focused
• Facilities are organized around products.
• They are also called as continuous processes because they have very long, continuous
production runs such as glass, tin sheets, paper, light bulbs, beer and potato chips
• Specialized dialysis centers or Narayana Netra Rugnalaya are example in service industry

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Mass Customization
• Increasingly wealthy and sophisticated consumer demands
individualized goods and services
• Explosion of variety has taken place in automobiles, movies, food and all
areas
• Operations Managers use mass customization to produce vast variety of
goods and services whenever and wherever customers want it
• Dell, OTT platforms, Subway
• Challenges in Mass Customization
• Product design must be imaginative – modular, plug and play
• Process design must be flexible – late customization
• Inventory Management – requires strict control
• Tight Schedules
• Responsive Partners in supply chain

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Comparison

Project Job Shop Batch Line Flow Continuous

(Mass (Process (Product (Repetitive Flow
Customization) Focus) Focus) Focus) (Product
Focus)
Labour Experts, High/ Moderate skill Low Skill
Tradesmen
Equipment Unique, General purpose, Specialised,
One function, Less Automation, High degree of automation,
High Investment Low investment High investment
Production Customer triggered Produced to forecast
Triggers
Product Unique Very High High Low None
Variety
Product One or few Low Low High Very High
volume

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Process Analysis and Design
• When analyzing and designing processes, following questions need to be asked
• Does the process eliminate or minimize non value added activities?
• Does the process maximize customer value?
• Will it win order?
• Is the process designed to achieve competitive advantage in terms of
• Differentiation
• Response
• Low Cost
• Number of tools are used to study process
• Flowchart
• Swim lanes
• VSM (Not required by students)
• SIPOC
• Time Function Mapping
• Process Charts

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Simple Flowchart/Process Map : Customer Contact to Shipment
Shown here is a simple flowchart of a generic “Customer Contact to Shipment” process. Notice
the legend at the bottom showing what each symbol means. The start/end, process step, and
decision point symbols are the most widely recognized and used.
• Subprocess, data, and document symbols are
used in place of a the process step symbol
when the process step itself is a subprocess,
data collection point, or document
edit/creation step. For simplicity, many
people just use the process step box symbol
instead of the others- its your preference!
• A decision point is used where a process
branches off into at least 2 different process
steps (that may come back to a common
process later) based on certain criteria.
• In this example, the criteria is whether the
company can initially support the customers
request date or not. If yes, they keep flowing
through the process, but if no they must
negotiate with the customer on date or
product(s) needed.

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Swimlane Process Maps

The simplest way to map a process is by using a flowchart or swim-lane process map. A
flowchart or process map visually shows the steps in a process.
The level of detail is up to the creator and based on their requirements or end goal.
Flowcharts are most often used when the process scope is limited to one function or
responsibility, but can be used for cross-functional processes too.
A swim-lane process map is most often used for cross functional processes so you can
decipher what function does certain tasks.

You can initially map your

processes manually with big
butcher block paper, sticky notes,
and a permanent marker. After the
messy paper process is agreed
upon it can then be made “pretty”
and captured electronically in
Microsoft Visio or another software
application.
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Swimlane Process Map

A swim-lane process map is simply a flowchart with an added dimension of

function/responsible party. It uses the same symbols as a simple flowchart but process
steps are placed in the “swim-lane” of the functional group or person responsible for
completing that task.

Sales This example is the same

“Customer Contract to
Planning Shipment” process, but in a
swim-lane process map with
the process steps aligned in
Production the appropriate swim-lane
for who does the work: sales,
Shipping planning, production, or
shipping.

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What is a SIPOC?

Symbol Stands For Explanation

S Suppliers Providers of needed resources
I Inputs Resources required to complete the process
P Process High level description of the work being done
O Outputs Deliverables from the process
C Customers Anyone who receives an output

SIPOC is a handy reminder acronym that contains the terms in their proper order, helping you
remember not only the five high-level elements of a process map but also their order.

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What is a SIPOC?
Here is an example of a SIPOC template. As you can see, the acronym not only helps us
remember the elements of the tool and their order, but also gives us some insight into what a
SIPOC is. Simply put, a SIPOC diagram is a visual process map that clearly defines the inputs,
outputs, suppliers, and customers of each process step in table form. It verifies that process
inputs match upstream process outputs and identifies if there are gaps.

This tool is also a great way to

spark the conversation for what
the critical to quality
characteristics of these outputs
are; including things such as
timing, accuracy, weight,
dimension, cost, or any other
measurement for quality, from
the customer’s perspective, of
that output. Let’s review an
example for you to gain a better
understanding.

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Example: Dining at Restaurant

Supplier Input Process Output Customer

You Table Preferences Find Table Your Table You

Captain Your Table Sit at Table Occupied Table You

Captain Menu card Order Food Paper Slip of Chef

You Food Preferences Order

Chef, Waiter Food Eat Food Soiled Plates Housekeeping

Cashier Bill Pay Bill Payment Restaurant

Waiter POS Terminal Tip Owner
Waiter

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Time Function Map

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Process Chart

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Production Technology
• Machine Technology
• Automatic Identification System (AIS)
• Process Control
• Vision Systems
• Robots
• Automated storage and retrieval systems (ASR)
• Automated Guides Vehicles (AGV)
• Flexible Manufacturing Systems (FMS)
• Computer Integrated Manufacturing

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Machine Technology
• Most machines have become computerized increasing
• Speed
• Throughput
• Tolerances
• Quality

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Automatic Identification System
Automatic Identification System (AIS) may consist of
• Bar Codes / QR Codes along with Optical scanners
• RFID

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Automatic Identification System
Automatic Identification System (AIS) may consist of
• Bar Codes / QR Codes along with Optical scanners
• RFID

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Process Control
Process Control Systems such as DCS and PLC

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Vision Systems
Used for Dimensional Measurements, Inspection, Quality Control or Counting

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Robots
Used for 3D jobs – Dirty, Demanding and Dangerous, Monotonous, High
Precision

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Automated Storage and Retrieval System
Used in Warehouses

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AGV
Transportation of material in Factories

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FMS
• Central computer provides information to each workstation, material
handling equipment, robots, AGVs and ASRs, system is known as
automated work cell or more commonly FMS.
• FMS is flexible because machines and material handling devices are
controlled by programs
• Such systems can produce low volume high variety parts by just
changing the program
• Operators simply load the program to produce different parts

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CIM
• Show Video

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Technology in Services

Industry Examples
Banking ATM, Credit Cards, Debit Cards, Phone Banking, Net Banking, Mobile Banking
Education Online Courses, Testing, Assessment
Government Passport, Driving License, Income Tax Returns, Provident Fund
Restaurants Wireless Orders from waiters to kitchen, Self Service
Communication Online Video Meetings
Hotels Self-check-in and check-out, online bookings
Transportation E-Tickets, Electronic Toll, Common Tickets
Insurance On-line Policy purchase and claim
Healthcare Diagnostic reports by email, robotic surgery
Retail E-commerce

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Thank You
simsr.somaiya.edu

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