Four V’s

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All business processes differ in some way from one another. There are certain common characteristics that they share.

Four V's

Volume:

Does the business produce a few specialist items or is it producing lots of the same thing? High volumes of output indicate repeatability due to familiarity of the process. Specialized staffing and machinery may be evident to maximise efficiency of the operation. Economies of scale may be apparent in terms of price point entry to a market. They are doing the same thing again and again so can gain a competitive advantage over a business that has low volume.

e.g.1. A house special burger at a four star Michelin restaurant will cost you more than the equivalent at McDonalds.

Variety:

This relates to the different types of activities that are being performed. If it is mixed model manufacturer engaged in lot

s of fast changeovers between processes it will encounter additional operational complexity. It implies a wide range of inputs to the process and the additional complexity of matching customer requirements to the products or services. High variety processes are invariably more costly than low variety processes.

e.g. A department store that has 300 sku’s of general clothing may not be able to compete with a specialist Jeans boutique that has only 12 sku’s.

Variation:

Processes are always easier to manage when there is predictability of demand. Resources can be more effectively utilised to meet the customer needs. In a process that has unpredictability extra resources will have to be made available to act as a ‘capacity cushion’ against a sudden surge in demand.

e.g. SWAT requirements are likely to unpredictable and rare compared to the day to day running of a Police force.

Visibility:

How much of the process does the customer actually experience. In a factory that produces armchairs the customer will experience little if any of the process, but will enjoy the output – the chair. Due to a distance between the customer and the process there is an inevitable lag in communications – moments stretch into hours, days even weeks. If you are a client facing business selling massages then the customer experience will be extremely high. In this environment you will be offering an immediate response to their needs and will need to employ different customer management skills.

e.g. Dentists with a patient in the chair are much more focused on customer care and attention than a laboratory that makes sets of custom dentures.

FourVsExample

FourVs

Plotting the processes that exist within your enterprise will offer you insight into how you would conduct such Business As Usual (BAU). It is not uncommon to have separate teams and procedures in place to deal with processes that have such varied characteristics. Indeed BAU can only occur if one is prepared to accept that the business processes must reflect the needs of the customer.

Slack, N. et al. Operations and Process Management. 2nd Ed. (2009) Prentice Hall

How Businesses

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