Operations Management - Process Strategy

Operations Management 1
OPERATIONS MANAGEMENT
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Operations Management 2
Process strategy
A process strategy in operations management is the approach an organization uses to
transform raw materials and resources into usable goods and services that can be acquired by
customers. Such a strategy seeks to build a production process that can meet customer demands
by producing goods with the required specifications while also minimizing overall operational
costs. It also seeks to enhance effectiveness and overall efficiency in the production process to
enable an organization to perform optimally. Each strategy selected by the management has a
long term effect on the flexibility, efficiency, quality of products produced and the cost of
production involved.
A process strategy plays a critical role in operations management as it forms the basis for
coordination, planning and controlling all needed resources for the production of products and
services for a company (Jacobs, Chase, and Lummus, 2014, p. 534). Operations management
transforms inputs into outputs with the help of a well-defined process strategy.
Areas of concern in process strategy formulation
The management must pay close attention to all the segments within the supply chain that
support production processes.
Successful process decisions can only be made by choices that best match the existing
situations within an organization and its supply chain.
Decisions in process strategy
In the course of implementing a process strategy, the management or the operations
manager makes decisions on the structure of the process by defining the way the production of a
product will be organized (Subramanian and Ramanathan, 2012, p. 221). The manager must also
make decisions on the level of customers’ involvement in the whole process, the degree of
resource flexibility and capital intensity with decisions being based on the cost of equipment,
machinery and materials.