Operations Management
HRM-306
Chapter-04
 Process Strategy:
Process strategy which specifies the pattern of decision
made in managing processes so that they will achieve
their competitive priorities.
 When a company made process improvement decision:
•
•
•
•
•
•
•
•
•
•
A Gap between competitive priorities and competitive capabilities.
A new or substantially modified service or product is being offered.
Quality must be improved
Competitive priorities have changed.
Demand for a service or product is changing
Current performance is inadequate
The cost or availability of inputs has changed
Competitor are gaining by using a new process
New technology are available
Someone has a better idea.
 Principles of Process Decision:
Three principles concerning process decision are as below:
1. Successful process decision is to make choose that fit the situation and
make sense together. They should not work for cross- purpose. One
process optimize the expenses of other process. A more effective
process is one that match key process characteristics and has a close
strategic fit.
2. It focus on individual process. They build block that create the firms
whole value chain. The cumulative effect of the process should have an
impact on customer satisfaction and competitive advantage in huge.
3. Management pay interface when process value chain perform internally
or by outside supplier. To deal with interface there need cross function
coordination.
 Major Process Decisions:
Process
Structure
Customer
involvement
Resource
flexibility
Capital intensity
Strategy for
change
Effective
process
design
 Customer contract:
The extent to which the customer is present, is actively involved, and
receive personal attention during the service process.
What are the dimension of Customer Contract:
1.
2.
3.
4.
5.
Physically presence
What is being process
Contract intensity
Personal attention
Method of delivery
 Customer contract Matrix
Less customer contract and customization
Less complexity, less divergence, and more line flows
Service Package
Process
characteristics
(1)
Flexible flows, complex work
with many expectations
(2)
Flexible flows with some
dominant paths, moderate job
complexity with some
exceptions
(3)Line flows, routine work,
easily understood by
employees
(1)
High interaction with
customers, highly customized
service
(2)
Some interaction with
customer, standard service
with some options
(3)
Low interaction with
customer, standardized service
Front office
Hybrid office
Back office
 Service Process Structuring in the financial service industry:
.
•
•
•
•
•
Front office
Hybrid office
Back office
Sale of financial services to
municipalities
Creation of quarterly performance
report
Production of monthly client
fund balance report
Research customer finance
Work with customer to
understand customer needs
Make customized presentation
to customer addressing specific
customer needs
Involve specialized staff
offering variety of services
Continuing relationship with
customer, reaction to changing
customer needs.
•
•
•
•
•
Data obtain electronically
Report calculated using
standardized process
Report reviewed using
standardized diagnostic systems
Manager provide written
analysis and recommendations
in response to individual
employee performance
Manager meets with employee
to discuss performance
•
•
•
•
•
Data obtain electronically
Report run using
standardized process
Result checked for
“reasonableness” using
well-established policies.
Hard copy and electronic
files forward to analysis
Process repeated monthly
with little variatopn.
THANKS EVERYONE