Process Strategy
A business’s process strategy includes the decisions
it has made in order to attain its competitive priorities. The four main
decisions of process strategy are: process structure, customer involvement,
resource flexibility, and capital intensity.
Process Structure
Process structure is the process type that involves
the main characteristics of the necessary resources and how those resources are
sectioned. Bohemian Raspberry is a service business, and its employees have
high contact with customers. The customer’s order is placed in-person,
processed by people, and Bohemian Raspberry employees strive to provide each customer
with a personalized experience. Furthermore, Bohemian Raspberry has a front
office layout. There is high interaction with customers, high customization,
and flexible flows with individualized processes that vary between customers.
Although there is no manufacturing performed in Bohemian Raspberry, they do utilize components of the product-process matrix; mainly a job process. Bohemian Raspberry’s yogurt dishes are produced in low volumes that are made by the customer. The customer’s final good involves high customer involvement in the customization stage, which produce a flexible and unique sequence of tasks. Moreover, Bohemian Raspberry uses an assemble-to-order strategy. Customers can make a variety of dishes from the given yogurts and toppings, which yields mass customization.
Customer Involvement
Customer involvement entails the ways in which
customers are included in the process and the degree of their involvement.
Bohemian Raspberry has both high and low customer involvement. The self-serve
frozen yogurts demonstrates high customer involvement. When customers make
their own yogurt dishes, they fill up their cups with the desired amount of
frozen yogurt and toppings. Unless a customer specifically asks an employee to
assemble their yogurt, customers are the ones who are completing the process. Conversely,
Bohemian Raspberry demonstrates low customer involvement in smoothies, milk
shakes, coffee beverages, and juices. While customers may ask for certain
specifications to their drinks, they are not actually involved in the process.
When a customer orders a smoothie or other drink, employees are solely involved
in the process.
Resource Flexibility
The two main components of resource flexibility are a
flexible workforce and equipment. Resource flexibility includes how the
workforce and equipment manage an array of products, output levels, duties, and
responsibilities. The workforce at Bohemian Raspberry is highly flexible. They
manage numerous tasks, such as the cash register, making drinks, and store
upkeep. A flexible workforce is necessary for Bohemian Raspberry. Demand for
frozen yogurt spikes in the spring and summer, and the store’s workforce needs
to have the capacity to absorb volume flexibility. While the staff at Bohemian
Raspberry is flexible, the equipment is not. The store’s equipment is
specialized. The frozen yogurt machines only are used for frozen yogurt; the juice
machines can only be used to make juices; the coffee equipment can only be used
to make coffee; and so forth.
Capital Intensity
Capital intensity is combination of equipment and
human skills in a process. This means the greater the cost of equipment
relative to cost of labor, the greater the capital intensity. Bohemian Raspberry
has a low capital intensity because the customers and the employees are using
the machines in the yogurt shop. While it is relatively low, there are still
elements of capital intensity at Bohemian Raspberry. In particular, there are
several pieces of equipment that have automation – in particular, fixed
automation. Fixed automation is a process that produces a part of the product
or the product itself through simplistic methods. An example of this is the
espresso machine. Espresso servings come in three forms: “one shot,” “two
shots,” and “three shots,” depending on the corresponding size of the espresso
drink. When employees use the machine, they press a button for the amount of espresso
shots and the machine automatically produces the liquid from the espresso beans
and grinds.
Economies of Scope
Economies of scope allow for the production of
multiple products that are produced more cheaply if in combination rather than
separately. Bohemian Raspberry has an economy of scope. There is high customer
involvement, however there is no premium charge to customers. Customers are allowed
to customize their frozen yogurt dish as much as possible, which produces more
combinations and variations of products for less cost. The final cost of the
product for the customer is dependent on how many ounces their cup weighs. The
selection of yogurt and toppings allows for a great variety of options.
Fishbone Diagram
The fishbone (cause-and-effect) diagram connects a
problem with performance to its cause. The following fishbone diagram
represents the result of a dissatisfied customer during the order fulfillment process.
There are four main categories for error: product, equipment, people, and
external factors. Potential product causes include an out-of-stock flavor or
expired food. Equipment factors include broken machinery or topping dispensers.
Furthermore, factors concerning people include employees poorly treating the
customer. Finally, external and miscellaneous factors can disrupt the order
fulfillment process.
Pareto Chart
Pareto charts detail the frequency count and cumulative percent of factors in an activity. The following data was collected There are five main issues that can occur during the order fulfillment process at Bohemian Raspberry: (1) the customer complained about the food, (2) discourteous server, (3) frozen yogurt flavor is out of stock, (4) machine is out of order, and (5) external factors. The following data was collected over the span of one week in July, 2015.
Flowchart
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