PROCESS
DESIGN
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
PROCESS STRATEGY
(CONTD.)
Major process decisions include:
Process Structure
Customer Involvement
Resource Flexibility
Capital Intensity
MAJOR DECISIONS FOR
EFFECTIVE PROCESS
DESIGN
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
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
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
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
PROCESS STRUCTURE
IN SERVICES (CONTD.)
High Contact
Dimension
Low Contact
Present
Physical presence
Absent
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
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
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
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
CUSTOMER-CONTACT MATRIX FOR
SERVICE PROCESSES
Less Complexity, Less Divergence, More Line Flows
Less Customer Contact and Customization
Service Package
(1)
Process
Characteristics
High interaction with
customers, highly
customized service
(2)
Some interaction with
customers, standard
services with some options
(3)
Low interaction with
customers, standardized
services
(1)
Flexible flows,
complex work with
many exceptions
Front office
(2)
Flexible flows with
some dominant
paths, moderate
job complexity with
some exceptions
Hybrid office
(3)
Line flows, routine
work easily
understood by
employees
Back office
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
PRODUCT-PROCESS MATRIX
Less customization and higher volume
Less complexity, less divergence, and more line flows
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
(1)
(2)
(3)
Low-volume
Multiple products with low Few major
products, made to moderate volume
products,
to customer
higher vol
order
(4)
High volume, high
standardization,
commodity products
Job
process
Small batch
process
Batch processes
Large batch
process
Line
process
Continuous
process
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
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
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
PRODUCTION AND
INVENTORY STRATEGIES
Make-to-Order Strategy
Assemble-to-Order Strategy
Postponement

Make-to-Stock Strategy
NEW SERVICE/PRODUCT
DEVELOPMENT PROCESS
Design
Service/Product not
profitable
Analysis
Need to rethink the
new offering/production
process
Developmen
t
Post-launch review
Full Launch
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 longterm survival of the firm
New may either mean introducing a brand new concept or
implementing major changes to the existing
products/services
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
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
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
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
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
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
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)
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
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
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
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
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)
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
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.
© 1984-1994 T/Maker Co.
HOUSE OF QUALITY
(CONTD.)