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PROCESS

MANAGEMENT
Processes underlie
all work activity
and are found in all
organizations and
in all functions of
an organization.

Processes are
nested within other
processes along an
organization's
supply chain (value
PROCESS MANAGEMENT

- is the selection of the inputs, operations,


work flows and methods that transform
inputs and outputs.

- process decisions also deals with the


proper mix of human skills and equipment
and which parts of the processes are to be
performed by each.
Process decisions must be made when:

 a new or substantially modified product or


service is being offered
 quality must be improved
 competitive priorities have changed
 demand is changing
 current performance is inadequate
 competitors are gaining
 the cost and availability of inputs has
changed
Major process decisions

1. VERTICAL INTEGRATION
1.a. Backward Integration
- represents movement upstream towards
the sources of raw materials.

1.b. Forward Integration


- represents downward movement to acquire
more channels of distribution.
2. RESOURCE FLEXIBILITY
- is a factor that greatly affects a firm's
ability to compete.

2.a. Workforce

2.b. Equipment
3. CUSTOMER INVOLVEMENT

3.a. Self-service

3.b. Product Selection

3.c. Time and Location


4. CAPITAL INTENSITY

4.a. Fixed Automation

4.b. Flexible Automation


5. PROCESS CHOICE
PROFESSIONAL SERVICE
- frequent interaction with customers
(lawyers)

SERVICE SHOPS
- considerable attention is given to
customers' unique requirements and
preferences.
- equipment is crucial for handling diverse
and specialized requirements (auto repair
shops)
MASS SERVICE
- service specifications are tightly
controlled. (wholesalers)

SERVICE FACTORY
- operations are buffered from the
customers, high process volumes and
repetition (public transpo, movie theaters)
Reasons for Globalization:

- Increased demand for imports


- Reduced import quotas ans other trade
barriers
LOCATION
Disadvantages of Globalization

- giving up of proprietary technology


- political risks
- additional costs
Managing Global Operations

- different languages
- different norms and customs
- work-force management
- unfamiliar laws and regulations
- cost mix
Challenges in Managing Global Operations

- different languages
- different norms and customs
- work-force management
- unfamiliar laws and regulations
- cost mix
Sample Problems on Load Distance Method
1. LDM Company is considering the residents of
Location C as potential customers. However, due to
some other important factors, the new branch should
be put up on either location A or location B. Using the
data below, where should they put up the new
branch?
a. using Euclidean distance
b. using Rectilinear distance
LOCATION X Coordinate Y Coordinate
A 50 185
B 300 50
C 175 100
2. A new health care facility is targeted to serve
seven census tracts in Erie, Pennsylvania. Customers
will travel from the seven census tract centers to the
new facility when they need health care. Tracts C and
F are being
TRACTconsidered for the new facility.
Coordinates Population
A (2.5,4.5) 2
B (2.5,2.5) 5
C (5.5,4.5) 10
D (5,2) 7
E (8,5) 10
F (7,2) 20
G (9,2.5) 14
TRACT Coordinates Population
A (2.5,4.5) 2
B (2.5,2.5) 5
C (5.5,4.5) 10
D (5,2) 7
E (8,5) 10
F (7,2) 20
G (9,2.5) 14

2.a. Determine the load score of Tract C and Tract F


2.b. Determine the load score of Tract B and Tract G

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