Lexeme-based morphology is (usually) an Item-and-Process approach. Instead of analyzing a word-form as a set of morphemes arranged in sequence, a word-form is said to be the result of applying rules that alter a word-form or stem in order to produce a new one. An inflectional rule takes a stem, changes it as is required by the rule, and outputs a word-form; a derivational rule takes a stem, changes it as per its own requirements, and outputs a derived stem; a compounding rule takes word-forms, and similarly outputs a compound stem.
The Item-and-Process approach bypasses the difficulties inherent in the Item-and-Arrangement approaches. Faced with a plural like geese, one is not required to assume a null morpheme: while the plural of dog is formed by affixing -s, the plural of goose is formed simply by altering the vowel in the stem.