Process-Based Global

Operations Strategy

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Introduction to Global Business Processes
• “Processes are structured, recurrent activities that transform inputs
into outputs” (Van Mieghem 2008).
• A process is as a set of logically related tasks performed to achieve a
specific business outcome (Davenport and Short 1990).
• Five elements of a process:
• Inputs and outputs,
• Flow units,
• Activity networks and buffers,
• Resources,
• Information structure.

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Business Process Design
• Business process design (BPD) is the method by which a firm
understands and defines the business activities to support and
sustain development.
• The process design includes the design of a manufacturing or service
process network for producing quality goods and services for the
targeted markets or customers.

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Basic elements in specification of an business
process.
• Jobs. They are the entities (e.g., orders, projects, and transactions) made
up of tasks and flows through a process.
• Tasks. They are activities or operations.
• Precedence constraints. Tasks are connected by precedence relations.
• Resources. They are operational units to execute the tasks.
• Flow management protocols. Protocols specify the route, sequence, rules
for resources to execute tasks, and may be based on system status
information such as the location of jobs, the product information, and
logistics capacity status.
• Incentives. A manager needs a system of assessing individual contributions
for long-term development.

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The second step of BPD
• Evaluate
• resource consumption rate and utilization,
• the variability on performance,
• the effectiveness in terms of response time, cost, quality and service levels.
• The BPD could be a repeated cycle until the evaluation shows the
process performance is satisfactory.

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Business Process Reengineering
• Business Process Reengineering (BPR) is fundamental management
thinking about radical redesign of a business process to obtain
dramatic and sustained improvements in business performance.
• Two distinct elements of BPR:
• Reintegration of industrial work, reversing the trend of specialization and
division of labor from industrial revolution, and
• Radical change, different from incremental or evolutionary process
improvement.

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Example of BPR: Crossdocking
The use of modern information technology to radically
redesign warehouse operational process

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A typical process reengineering life cycle
includes six stages
• Envisioning a reengineering project through securing commitment from
senior management, identifying reengineering opportunities, identifying
enabling technologies, and aligning with competitive strategy,
• Getting started through building the reengineering team and setting
performance goals,
• Diagnosing process pathologies,
• Redesigning by exploring alternative designs, designing new processes,
designing the human resources, building prototypes, and selecting an IT
platform,
• Reorganizing activities through IT platform,
• Measuring the configured process.

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Business Process Management

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BPM stages
• Vision. BPM firstly builds process management vision based on competitive
strategy.
• Design. Process design encompasses the identification of existing processes and
the design of new processes.
• Modeling. Modeling conducts the theoretical design and introduces
combinations of variables.
• Execution. A firm can execute BPM by developing or purchasing an application or
using a combination of software and human power.
• Control. A firm needs to collect status information and statistic data on the
performance for one or more processes.
• Improvement. Evolutionary process improvement includes optimizing existing
process framework, identifying bottlenecks, finding improvement opportunities.
When evolutionary improvement cannot lead to desired outputs and
performance, the firm can reengineer the entire business process.
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