Krajewski IN Chapter 4 - Chapter 4 Process Strategy...

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Chapter 4 Process Strategy TEACHING TIP This chapter focuses on the strategic dimensions of process decisions. As shown in Chapter 2, these process decisions should further a company’s long-term competitive goals. When making process decisions, managers should make sure that each process reflects the competitive priorities assigned to it, such as quality, flexibility, time, and cost. A. Process Strategy Across the Organization TEACHING TIP Introduce with some business example or “war story,” such as Duke Power with its five core processes focusing on customer service. 1. Emphasize that processes are everywhere, in all functional areas of the enterprise. a. Processes are found in accounting, finance, human resources, management information systems, marketing, and operations. b. They are the basic unit of work. 2. Managers must see to it that processes in all departments are adding as much customer value as possible. B. Process Strategy 1. Process strategy is the pattern of decisions made in managing processes so that they will achieve their competitive priorities. Process strategy is the selection of the inputs, resources, work flows, and methods that transform inputs into outputs. It begins with deciding what to do in-house and what to outsource. a. They underlie all work activity throughout the organization. b. They are nested within other processes along an organization’s supply chain. c. The recurring question is how to provide a service or make a product 2. Process improvement decisions are most likely when: a. A gap exists between competitive priorities and competitive capabilities. b. New or substantially modified service or product is being offered. c. Quality improvement is needed. d. Competitive priorities change. e. Demand volume changes. f. Current performance is inadequate. g. Cost or availability of inputs change. 4-1
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4-2 Chapter 4: Process Design Strategy h. Competitors are gaining by using a new process. i. New technologies are available. j. Someone has a better idea. 3. Three particularly important principles concerning process design a. Successful process design requires choices that fit the situation and make sense together ( strategic fit ). b. Individual processes are the building blocks that eventually create the firm’s whole value chain. c. Management must pay particular attention to the interfaces between processes whether they are performed internally or by outside suppliers, underscoring a need for cross-functional coordination. 4. Environmental considerations TEACHING TIP Mention the impact of environment with a business example, such as (1) McDonald’s change in the processes to package foods, and one of the country’s leading buyer of recycled materials, or (2) ISO 14001 as a set of standards on how a company can eliminate pollution. C. Major Process Decisions
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Krajewski IN Chapter 4 - Chapter 4 Process Strategy...

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