5.4 Decisions in Process Management
Effective process management hinges on five key decisions that are critical to an organization’s success:
- Process Choice: Selecting the most appropriate process type.
- Vertical Integration: Determining the extent to which a firm performs activities in-house.
- Resource Flexibility: Deciding on the adaptability of labour, equipment, and facilities.
- Customer Involvement: Defining the degree to which customers participate in the process.
- Capital Intensity: The level of investment in equipment versus labour.
A thorough understanding of these decisions, along with associated terminology such as Project Process, Job Shop Process, Batch Flow Process, Line Flow Process, and Continuous Flow Process, is essential and will be further explored in the subsequent sections.
Process Choice
The first and most fundamental decision in process management is process choice—selecting the appropriate process structure to support the organization’s strategic objectives. To make an informed choice, it is important to understand the characteristics of different process structures, often referred to as process architecture or process structure.
Key attributes that differentiate process structures include:
- Flow: The degree of sequencing in activities, ranging from highly flexible paths to a single, fixed sequence.
- Flexibility: The extent to which a process can adapt to changes in volume or product mix without significant cost or performance degradation.
- Number of Products: The range of different products or services the process can handle, from highly customized to standardized.
- Capital Investment: The level of investment in equipment, from general-purpose, low-cost tools to highly specialized, capital-intensive machinery.
- Variable Cost: The cost per unit of output, which typically decreases as processes become more standardized and automated.
- Labour Content and Skill: The amount and complexity of human labour required, ranging from high-skill, labour-intensive processes to low-skill, automated systems.
- Volume: The scale of production, from one-off or small-batch production to high-volume mass production.
These attributes tend to vary monotonically across the spectrum of process types—from highly flexible, low-volume processes to highly standardized, high-volume ones.
Types of Process Structures
The main types of process structures used in manufacturing and service operations include:
- Project Process: Used for unique, one-of-a-kind outputs such as construction projects or custom software development. High flexibility, low volume.
- Job Shop: Suitable for low-volume, high-variety production. Examples include custom furniture or specialized machine parts.
- Batch Flow: Involves producing moderate volumes of similar items in groups or batches. Common in bakeries or clothing manufacturing.
- Line Flow: Characterized by a standardized sequence of operations, suitable for high-volume production with limited variety (e.g., automobile assembly lines).
- Continuous Flow: Used for very high-volume, standardized production with minimal variation, such as in oil refining or chemical manufacturing.
The characteristics of the above processes are examined in the following sections.
Project Process
A project process represents the high-customization, low-volume end of the process continuum. It is typically used for unique, large-scale, and complex undertakings such as constructing a hospital, developing a new technology, or organizing a major event. Each project is distinct, with a specific set of objectives, a defined timeline, and a unique sequence of operations.Key characteristics include:
- High customization and low repetition
- Flexible workflows that are redefined for each project
- Resource-intensive at specific stages, with fluctuating demand for labour and equipment
- Coordination-intensive, requiring close integration of interdependent tasks
Organizations employing project processes often compete based on their capabilities rather than standardized offerings. Success depends on effective project management, resource allocation, and the ability to adapt to evolving client requirements.
Job Shop Process
A job shop process is designed for producing small batches of a wide variety of custom or semi-custom products. It is characterized by high flexibility and low production volume. Examples include machine shops, custom furniture makers, and specialized repair services.Key features:
- General-purpose equipment grouped by function (e.g., lathes, drills, milling machines)
- Highly skilled labour capable of handling diverse tasks
- Flexible routing, where each job may follow a different path through the facility
- Low efficiency, but high adaptability to customer-specific requirements
Job shops are ideal for environments where product variety is high and demand for each product is low. They rely heavily on the expertise of workers and the ability to reconfigure workflows dynamically.
Batch Flow Process
A batch flow process bridges the gap between job shops and line flow systems. It is used to produce moderate volumes of similar products in groups or batches. While it retains some flexibility, it introduces more structure and repeatability.Key characteristics:
- Dominant flow patterns, though not fully continuous
- Moderate customization with higher volumes than job shops
- Setup times required between batches, impacting efficiency
- Common applications include bakeries, pharmaceuticals, and paint manufacturing
Batch processes allow for a balanced trade-off between flexibility and efficiency, making them suitable for organizations that produce a variety of products in recurring quantities.
Line Flow Process
A line flow process is used for high-volume production of standardized products. It features a fixed sequence of operations, with materials moving linearly from one workstation to the next.Key attributes:
- Standardized products with minimal variation
- High efficiency due to repetitive tasks and streamlined flow
- Low work-in-process inventory, as items move continuously
- Examples include automobile assembly lines, electronics manufacturing, and fast-food services
Line flow processes typically follow a make-to-stock strategy, producing goods in anticipation of customer demand. While product variety is limited, it can be introduced through modular design or standardized options.
Continuous Flow Process
A continuous flow process represents the extreme end of the process continuum, characterized by uninterrupted production of a single, standardized product. It is commonly used in industries such as oil refining, chemical production, and electricity generation.Key features:
- Fixed sequence and constant pace of operations
- Highly capital-intensive, with minimal direct labour
- Low variable costs due to economies of scale
- Output measured in volume or weight (e.g., litres, tons)
This process type is ideal for the mass production of homogeneous products. While it offers minimal flexibility, it delivers maximum efficiency and cost-effectiveness at scale.
| Process Type | Volume | Flexibility | Custom-ization | Capital Intensity | Variable Cost | Labour Content | Flow Structure |
|---|---|---|---|---|---|---|---|
| Project Process | Low | Very High | High | Low | High | High | Flexible |
| Job Shop Process | Low | High | High | Moderate | High | High | Flexible |
| Batch Flow Process | Moderate | Moderate | Moderate | Moderate | Moderate | Moderate | Dominant |
| Line Flow Process | High | Low | Low | High | Low | Low | Fixed |
| Continuous Flow Process | Very High | Very Low | Very Low | Very High | Very Low | Very Low | Fixed |
Watch this video on Process Selection:
Video: “Process Selection – A Review of Continuous Flow, Assembly Line, Batch Flow and Job Shop” by Dr. Haywood [7:29] is licensed under the Standard YouTube License.Transcript and closed captions available on YouTube.
“4. Process Management: Types of Process and its Implication in Operation Strategy” from Operations Management by Sudhanshu Joshi is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License, except where otherwise noted.—Modifications: Used section 4-4.6; reworded; added further content.
