- Firstly, why change the processes?
- Secondly, which processes to change?
Why change?
Modern organisations face a lot of competition in delivering innovative products every year. Take the smartphones manufacturers for example. Imagine if these companies have inefficient processes with many reject parts that needs to be reworked after many hours of valuable factory time in producing them in the first place. This could result in months of delay of the product rollout to the market. This would give its competitors enough room to take up their market share during the period of delay. In conclusion, there are three "quality mantra" of organisation's of the day which are to provide 1. quality products valued by customers ; 2. done right the first time; and 3. introduce products fast to the market.
Which processes to change?
This is a very good question and this is where Harmon's Process Strategy Matrix comes in place.
The matrix will reveal that not all processes in an organisation adds much value to the products and services themselves.
Let's look into a phones / smartphones manufacturing company, SMART Co.
In producing a smartphone, SMART Co requires different inputs and parts of the smartphone from its various departments:- Research Dept, Design Dept, Display Dept, Camera Dept, Software Dept, Compact Battery Dept, Micro Processor Dept, Assembly Dept and etc.
SMART Co has analysed all of its processes and has categorised them as per the Harmon's Process Strategy Matrix below:
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| SMART Co's Harmon Process Strategy Matrix |
Let's look at the battery manufacturing function.
Is battery manufacturing a difficult process in SMART Co? (Process complexity dynamics)
SMART Co and most smartphones manufacturers consider this to be a simple process.
Does the batteries gives significant competitive advantage to SMART Co's products over competitors' products? (Strategic Importance)
The Compact Batteries may be viewed as a standard feature in the smartphone market as all players uses standard rechargeable Lithium Ion battery. This technology is found to be the most energy-efficient batteries for smartphones after years' of innovation in the industry. It is unlikely that any of the manufacturers may be able to add more value through innovation of the batteries.
1. This put the battery manufacturing processes is in the lower left quartile, whereby the process is straightforward and a static commodity process. Most organisations would consider minimal funds to be invested further in this process or may decide to outsource.
2. Focus would be put on high strategic importance activities and complex processes eg software development and retina display development. Process improvements in these areas are highly likely to bring more value to SMART Co's customers.
