Chapter 7 Process Management
Wisdom from Texas Instruments <ul><li>“Unless you change the process, why would you expect the results to change” </li></ul>
Key Idea Process management   involves planning and administering the activities necessary to achieve a high level of perf...
Competitive Priorities <ul><li>Cost </li></ul><ul><li>Quality </li></ul><ul><ul><li>High-performance design </li></ul></ul...
What Is a Process? <ul><li>Any group of activities that takes one or more inputs, transforms them, and provides one or mor...
Traditional Organizational Chart (How traditional organizations are managed) CEO Sales Marketing Engineering Manufacturing...
Process view   (How process-focused organizations work) Order placed Product Delivered Chain of events is horizontal
Core Process Map Customer Sales Marketing Finance Distribution Field engineering & Customer service Customer Order 1.1  Or...
Key Idea The Scope of Process Management Leading companies identify important business processes throughout the  value cha...
Types of Processes <ul><li>Value-creation processes  – those most important to “running the business” </li></ul><ul><ul><l...
Internal Value-Chain Linkages Showing Work and Information Flows External suppliers External customers Support processes S...
Support Processes The systems and activities that provide strategic direction and ensure effective execution of the work o...
International Benchmarking Clearinghouse’s Standard Process Classification <ul><li>Understand markets and customers </li><...
Process Management <ul><li>Process management consists of three key activities:  design, control, and improvement. </li></...
Control vs. Improvement Controlled process Improvement Time New zone of control Out-of-control
Leading Practices  (1 of 2) <ul><li>Define, document , and  manage  important value creation and support processes </li></...
Leading Practices  (2 of 2) <ul><li>Define  performance requirements for suppliers  and ensure that they are met </li></ul...
Product Development Process Idea generation Concept development Product & process design Full-scale production Product int...
Key Idea Product Design Process Product design can significantly affect the cost of manufacturing (direct and indirect lab...
Design for Manufacturability <ul><li>DFM  – the process of designing a product for efficient production at the highest lev...
Key Idea DFM DFM is intended to prevent product designs that simplify assembly operations but require more complex and exp...
Design Quality and Social Responsibility <ul><li>Product liability issues </li></ul><ul><li>Environmental issues </li></ul...
Streamlining Product Development <ul><li>Competitive need for rapid product development </li></ul><ul><li>Concurrent (simu...
Designing Processes for Quality <ul><li>Identify the product or service :  What work do I do? </li></ul><ul><li>Identify t...
Process Control <ul><li>Control  – the activity of ensuring conformance to requirements and taking corrective action when ...
Key Idea Process Control Process control is important for two reasons. First, process control methods are the basis for ef...
Components of Control Systems <ul><li>Any control system has three components: </li></ul><ul><ul><li>a standard or goal,  ...
Key Idea Process Control In manufacturing, control is usually applied to incoming materials, key processes, and final prod...
After Action Review <ul><li>What was supposed to happen? </li></ul><ul><li>What actually happened? </li></ul><ul><li>Why w...
Importance of Process Improvement <ul><li>Customer loyalty is driven by delivered value. </li></ul><ul><li>Delivered value...
Key Idea Process Improvement Improvement should be a proactive task of management and be viewed as an opportunity, not sim...
Process Analysis <ul><li>Process analysis  is the documentation and detailed understanding of how work is performed and ho...
Kaizen <ul><li>Kaizen  – a Japanese word that means gradual and orderly continuous improvement </li></ul><ul><li>Focus on ...
Flexibility <ul><li>Flexibility   – the ability to adapt quickly and effectively to changing requirements.  </li></ul><ul>...
Types of Flexibility <ul><li>Volume </li></ul><ul><li>Variety </li></ul><ul><li>Customization </li></ul>
Cycle Time <ul><li>Cycle time  – the time it takes to accomplish one cycle of a process </li></ul><ul><li>Reductions in cy...
Breakthrough Improvement  <ul><li>Discontinuous change resulting from innovative and creative thinking, motivated by stret...
Key Idea Breakthrough Improvement Stretch goals force an organization to think in a radically different way, and to encour...
Benchmarking <ul><li>Benchmarking  – “the search of industry best practices that lead to superior performance.” </li></ul>...
Types of Benchmarking <ul><li>Competitive benchmarking  - studying products, processes, or business performance of competi...
Reengineering <ul><li>Reengineering  – the fundamental rethinking and radical redesign of business processes to achieve dr...
Key Idea Reengineering Reengineering involves asking basic questions about business processes: Why do we do it? and Why is...
Process Management in the Baldrige Award Criteria <ul><li>The Process Management Category examines the key aspects of an o...
Upcoming SlideShare
Loading in …5
×

Chapter 7

658 views
626 views

Published on

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
658
On SlideShare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
38
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • The first slide establishes the continuum.
  • Chapter 7

    1. 1. Chapter 7 Process Management
    2. 2. Wisdom from Texas Instruments <ul><li>“Unless you change the process, why would you expect the results to change” </li></ul>
    3. 3. Key Idea Process management involves planning and administering the activities necessary to achieve a high level of performance in key business processes, and identifying opportunities for improving quality and operational performance, and ultimately, customer satisfaction.
    4. 4. Competitive Priorities <ul><li>Cost </li></ul><ul><li>Quality </li></ul><ul><ul><li>High-performance design </li></ul></ul><ul><ul><li>Consistent quality </li></ul></ul><ul><li>Flexibility </li></ul><ul><ul><li>Customization </li></ul></ul><ul><ul><li>Variety </li></ul></ul><ul><ul><li>Volume flexibility </li></ul></ul><ul><li>Time </li></ul><ul><ul><li>Fast delivery </li></ul></ul><ul><ul><li>On-time delivery </li></ul></ul><ul><ul><li>Development speed </li></ul></ul>
    5. 5. What Is a Process? <ul><li>Any group of activities that takes one or more inputs, transforms them, and provides one or more outputs for its customers. </li></ul><ul><li>It has to add value. </li></ul>
    6. 6. Traditional Organizational Chart (How traditional organizations are managed) CEO Sales Marketing Engineering Manufacturing Distribution Customer service Information flows upward Policy and decisions are deployed downward
    7. 7. Process view (How process-focused organizations work) Order placed Product Delivered Chain of events is horizontal
    8. 8. Core Process Map Customer Sales Marketing Finance Distribution Field engineering & Customer service Customer Order 1.1 Order placement 1.2 Order entry 1.3 Credit check 1.4 Pick and Pack 1.5 Schedule 1.7 Ship 1.6 Site prep 1.9 Invoice 1.8 Install Delivery acceptance
    9. 9. Key Idea The Scope of Process Management Leading companies identify important business processes throughout the value chain that affect customer satisfaction. These processes typically fall into two categories: value-creation processes and support processes .
    10. 10. Types of Processes <ul><li>Value-creation processes – those most important to “running the business” </li></ul><ul><ul><li>Design processes – activities that develop functional product specifications </li></ul></ul><ul><ul><li>Production/delivery processes – those that create or deliver products </li></ul></ul><ul><li>Support processes – those most important to an organization’s value creation processes, employees, and daily operations </li></ul>
    11. 11. Internal Value-Chain Linkages Showing Work and Information Flows External suppliers External customers Support processes Supplier relationship process Order fulfillment process New service/ product development process Customer relationship process
    12. 12. Support Processes The systems and activities that provide strategic direction and ensure effective execution of the work of the business Enterprise and Functional Management The movement and processing of data and information to expedite business operations and decisions Information Systems The process that insure the company if meeting all laws and legal obligations Regulatory Compliance The preparation of the people for their current jobs and future skill and knowledge needs Human Resource Support and Development The assessment and payment of the people for the work and value they provide to the company Evaluation and Compensation The acquisition of people to do the work of the organization Recruitment and Hiring The process of deciding how funds will be allocated over a period of time Budgeting The provision of financial resources for the organization to do its work and to execute its strategy Capital Acquisition Examples of Support Processes
    13. 13. International Benchmarking Clearinghouse’s Standard Process Classification <ul><li>Understand markets and customers </li></ul><ul><li>Develop vision and strategy </li></ul><ul><li>Design products and services </li></ul><ul><li>Produce and deliver </li></ul><ul><li>Manage improvement and change </li></ul><ul><li>Develop and manage human resources </li></ul><ul><li>Manage information </li></ul><ul><li>Market and sell </li></ul><ul><li>Invoice and service customers </li></ul><ul><li>Execute environmental management program </li></ul><ul><li>Manage financial and physical resources </li></ul><ul><li>Manage external relationships </li></ul><ul><li>Manage improvement and change </li></ul>
    14. 14. Process Management <ul><li>Process management consists of three key activities: design, control, and improvement. </li></ul><ul><li>To apply techniques for process management the processes must be repeatable and measurable . </li></ul><ul><li>Process owners are accountable for process performance. </li></ul>
    15. 15. Control vs. Improvement Controlled process Improvement Time New zone of control Out-of-control
    16. 16. Leading Practices (1 of 2) <ul><li>Define, document , and manage important value creation and support processes </li></ul><ul><li>Translate customer requirements and internal capabilities into product and service design requirements early in the process </li></ul><ul><li>Ensure that quality is built into products and services and use appropriate tools during development </li></ul><ul><li>Manage product development process to enhance communication, reduce time, and ensure quality </li></ul>
    17. 17. Leading Practices (2 of 2) <ul><li>Define performance requirements for suppliers and ensure that they are met </li></ul><ul><li>Control the quality and operational performance of key processes and use systematic methods to identify variations , determine root causes, and make corrections </li></ul><ul><li>Continuously improve processes to achieve better quality, cycle time, and overall operational performance </li></ul><ul><li>Innovate to achieve breakthrough performance using benchmarking and reengineering </li></ul>
    18. 18. Product Development Process Idea generation Concept development Product & process design Full-scale production Product introduction Market evaluation
    19. 19. Key Idea Product Design Process Product design can significantly affect the cost of manufacturing (direct and indirect labor, materials, and overhead), redesign, warranty, and field repair; the efficiency by which the product can be manufactured, and the quality of the output.
    20. 20. Design for Manufacturability <ul><li>DFM – the process of designing a product for efficient production at the highest level of quality </li></ul>
    21. 21. Key Idea DFM DFM is intended to prevent product designs that simplify assembly operations but require more complex and expensive components, designs that simplify component manufacture while complicating the assembly process, and designs that are simple and inexpensive to produce but difficult or expensive to service or support.
    22. 22. Design Quality and Social Responsibility <ul><li>Product liability issues </li></ul><ul><li>Environmental issues </li></ul><ul><ul><li>Design for Environment (DfE) - is the explicit consideration of environmental concerns during the design of products and processes, and includes such practices as designing for recyclability and disassembly. </li></ul></ul><ul><ul><li>Design for disassembly </li></ul></ul><ul><ul><li>Reverse logistics </li></ul></ul>
    23. 23. Streamlining Product Development <ul><li>Competitive need for rapid product development </li></ul><ul><li>Concurrent (simultaneous) engineering - a process in which all major functions involved with bringing a product to market are continuously involved with the product development from conception through sales </li></ul><ul><li>Design reviews </li></ul>
    24. 24. Designing Processes for Quality <ul><li>Identify the product or service : What work do I do? </li></ul><ul><li>Identify the customer : Who is the work for? </li></ul><ul><li>Identify the supplier : What do I need and from whom do I get it? </li></ul><ul><li>Identify the process : What steps or tasks are performed? What are the inputs and outputs for each step? </li></ul><ul><li>Mistake-proof the process : How can I eliminate or simplify tasks? What “poka-yoke” (i.e., mistake-proofing) devices (see Chapter 13) can I use? </li></ul><ul><li>Develop measurements and controls, and improvement goals : How do I evaluate the process? How can I improve further? </li></ul>
    25. 25. Process Control <ul><li>Control – the activity of ensuring conformance to requirements and taking corrective action when necessary to correct problems and maintain stable performance </li></ul>
    26. 26. Key Idea Process Control Process control is important for two reasons. First, process control methods are the basis for effective daily management of processes. Second, long-term improvements cannot be made to a process unless the process is first brought under control.
    27. 27. Components of Control Systems <ul><li>Any control system has three components: </li></ul><ul><ul><li>a standard or goal, </li></ul></ul><ul><ul><li>a means of measuring accomplishment, and </li></ul></ul><ul><ul><li>comparison of actual results with the standard, along with feedback to form the basis for corrective action. </li></ul></ul>
    28. 28. Key Idea Process Control In manufacturing, control is usually applied to incoming materials, key processes, and final products and services.
    29. 29. After Action Review <ul><li>What was supposed to happen? </li></ul><ul><li>What actually happened? </li></ul><ul><li>Why was there a difference? </li></ul><ul><li>What can we learn? </li></ul>
    30. 30. Importance of Process Improvement <ul><li>Customer loyalty is driven by delivered value. </li></ul><ul><li>Delivered value is created by business processes. </li></ul><ul><li>Sustained success in competitive markets requires a business to continuously improve delivered value. </li></ul><ul><li>To continuously improve value creation ability, a business must continuously improve its value creation processes. </li></ul>
    31. 31. Key Idea Process Improvement Improvement should be a proactive task of management and be viewed as an opportunity, not simply as a reaction to problems and competitive threats.
    32. 32. Process Analysis <ul><li>Process analysis is the documentation and detailed understanding of how work is performed and how it can be redesigned. </li></ul>1 Identify Opportunity 2 Define Scope 3 Document Process 5 Redesign Process 6 Implement Changes 4 Evaluate Performance
    33. 33. Kaizen <ul><li>Kaizen – a Japanese word that means gradual and orderly continuous improvement </li></ul><ul><li>Focus on small, gradual, and frequent improvements over the long term with minimum financial investment, and participation by everyone in the organization. </li></ul>
    34. 34. Flexibility <ul><li>Flexibility – the ability to adapt quickly and effectively to changing requirements. </li></ul><ul><ul><li>rapid changeover from one product to another, </li></ul></ul><ul><ul><li>rapid response to changing demands, </li></ul></ul><ul><ul><li>the ability to produce a wide range of customized services. </li></ul></ul>
    35. 35. Types of Flexibility <ul><li>Volume </li></ul><ul><li>Variety </li></ul><ul><li>Customization </li></ul>
    36. 36. Cycle Time <ul><li>Cycle time – the time it takes to accomplish one cycle of a process </li></ul><ul><li>Reductions in cycle time serve two purposes </li></ul><ul><ul><li>First, they speed up work processes so that customer response is improved. </li></ul></ul><ul><ul><li>Second, reductions in cycle time can only be accomplished by streamlining and simplifying processes to eliminate non-value-added steps such as rework. </li></ul></ul>
    37. 37. Breakthrough Improvement <ul><li>Discontinuous change resulting from innovative and creative thinking, motivated by stretch goals, and facilitated by benchmarking and reengineering </li></ul>
    38. 38. Key Idea Breakthrough Improvement Stretch goals force an organization to think in a radically different way, and to encourage major improvements as well as incremental ones.
    39. 39. Benchmarking <ul><li>Benchmarking – “the search of industry best practices that lead to superior performance.” </li></ul><ul><li>Best practices – approaches that produce exceptional results, are usually innovative in terms of the use of technology or human resources, and are recognized by customers or industry experts. </li></ul>
    40. 40. Types of Benchmarking <ul><li>Competitive benchmarking - studying products, processes, or business performance of competitors in the same industry to compare pricing, technical quality, features, and other quality or performance characteristics of products and services. </li></ul><ul><li>Process benchmarking – focus on key work processes </li></ul><ul><li>Strategic benchmarking – focus on how companies compete and strategies that lead to competitive advantage </li></ul>
    41. 41. Reengineering <ul><li>Reengineering – the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed. </li></ul>
    42. 42. Key Idea Reengineering Reengineering involves asking basic questions about business processes: Why do we do it? and Why is it done this way?
    43. 43. Process Management in the Baldrige Award Criteria <ul><li>The Process Management Category examines the key aspects of an organization’s process management, including key product, service, and business processes for creating customer and organizational value and key support processes, encompassing all key processes and work units. </li></ul><ul><li>6.1 Value Creation Processes </li></ul><ul><li>6.2 Support Processes </li></ul>

    ×