Operations Management: Process Strategy, Location, and Layout Analysis

This assignment focuses on process strategy, location, and layout within operations management. It begins by defining process strategy and its role in transforming raw materials into usable goods and services, emphasizing its impact on flexibility, efficiency, and cost. The assignment covers key areas of concern in process strategy formulation, including supply chain integration and decision-making on process structure, customer involvement, resource flexibility, and capital intensity. It delves into the process focus strategy, which involves re-engineering production for improved speed, quality, cost, and service delivery. Additionally, the assignment examines location and layout, including site selection criteria, demographic analysis, trade area analysis, competitive analysis, and plant layout optimization for efficient material and personnel flow. The assignment also includes detailed references to support the concepts discussed.

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.

Operations Management 3
Process focus strategy
Involves the re-engineering of the whole production through redesign and fundamental
rethinking of the processes. It helps improve the production performance in terms of speed,
quality, cost and service delivery. It entails the analysis of critical processes that are of strategic
importance, coordination of the cross-functional teams, having strong leadership and
incorporation of information communication technology into the whole process. All these
activities are aimed at achieving process efficiency and effectiveness.
Location and layout
Location is the choice of a site intended to be used for establishing a company or
production centre. In making such choices, benefits and costs are considered to ensure the
location can minimize production and operational cost. The location's proximity to the market
must be considered while also putting into account the level of risks and expected social benefits.
A plant location should be able to generate maximum profits and it should be able to support an
organization in maintaining the lowest production and distribution unit costs.
Before location selection, an analysis is important to help get the best from among
alternatives. The demographic analysis gives information on the total population, occupational
structure, per capita income and the age composition of a given location (Pillai, Hunagund, and
Krishnan, 2011, p. 815). Trade area analysis provides useful information on the ability of the
location to provide clientele continuously. A competitive analysis shows the level and nature of
competition that exists. Traffic analysis gives information on the number of potential customers.
Site economics analyzes the different costs including the establishment and operational costs.
Plant layout is how the physical facilities are arranged. Equipment, machinery and
furniture have to be arranged in such a manner that enhances easy flow of materials and efficient
movement of personnel from one point to another with the least handling and at the lowest cost.
Plant layout seeks to establish an arrangement able to support an organization in meeting quality
and quantity in the most economical way by minimizing operational costs. (Lee and Lee, 2017,
p. 570). A proper layout enhances the safety and comfort of personnel while at work, boosts
labour efficiency and enhances easy maintenance of facilities.

Operations Management 4
References
Jacobs, F.R., Chase, R.B. and Lummus, R.R., 2014. Operations and supply chain
management (pp. 533-535). New York, NY: McGraw-Hill/Irwin.
Lee, D.H. and Lee, C.J., 2017. The plant layout optimization considering the operating
conditions. Journal of Chemical Engineering of Japan, 50(7), pp.568-576.
Pillai, V.M., Hunagund, I.B. and Krishnan, K.K., 2011. Design of robust layout for dynamic
plant layout problems. Computers & Industrial Engineering, 61(3), pp.813-823.
Subramanian, N. and Ramanathan, R., 2012. A review of applications of Analytic Hierarchy
Process in operations management. International Journal of Production Economics, 138(2),
pp.215-241.