Process strategy, sometimes referred to as process and capacity design, is the way an organization turns the various resources at its disposal into products and services that benefit its consumer base. An appropriate process strategy should simultaneously meet all cost, customer and product specification requirements.
There are four specific types of process strategies. Product focus outputs high volume and low variety using massive QC and consistency measures. Process focus is, inversely, a much more flexible system that results in low volume and high variety. Repetitive focus is assembly line manufacturing that uses established models prior to the start of production. And mass customization offers end users a fully custom, tailor-made experience.
Hospitals engage in a process strategy that is simultaneously process-focused, considering their relatively low market share of total patients compared to total population, and customized in their approach to patient care. This is thanks to the extremely high variety of cases that medical professionals must deal with on a daily basis.
Factors that affect the feasibility of a process-focused process strategy include the type of equipment, workforce, and capital intensity involved in operations. Organizations such as hospitals require a large degree of customization among lower volumes of people. Because of this dynamic, they can more effectively employ equipment with low fixed costs that in turn offsets the lower volume of potential customers.
Moreover, the workforce strategy must enable flexibility. Hospitals should be able to hire appropriate personnel when needed to address the variety of tasks required, or fixed full-time workers, like general practitioners or registered nurses, who are capable of handling a wide variety of tasks.
Capital intensity for hospitals, like many other low-volume and high-variety businesses, is usually high. The customized approach to patient care requires special equipment and high-skilled workers with specialized knowledge. Hospitals also require relatively low worker-to-patient ratios to operate properly.