The document discusses key concepts relating to business processes. It defines a process as activities that add value for internal or external customers. It also discusses representing processes visually through process maps and notes that a process approach focuses on supplier-customer relationships rather than hierarchies. The value chain model shows how core activities and support processes all contribute value to the external customer.

1. Process concepts
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Daniel Ducret
danielducret@gmail.com
© 2011
Process & Management
ESC – La Rochelle

2. danielducret@gmail.com© Daniel Ducret 2011 Source: Brunel School of Business Management
"Looks like we were not the first one to think about processes"

3. danielducret@gmail.com© Daniel Ducret 2011
O Value = subjective notion
O A gap always exist between …
 The value of product and services offered
 The value expected by the customer
 Non-value is represented by fonctionalities or services which
the customer has not required !
What is a process?
A process should add value
Principle: All processes should add value for the customer – internal
or external
 Examples ?

4. danielducret@gmail.com© Daniel Ducret 2011
O For each process within a company, we find at least
 One supplier (internal or external)
 One "client" (internal or external)
O " Supplier" and "client" are conventional terms applying to
persons, entities (departments, services, units…), or systems
O In a process approach, relationships between people are managed
from a new angle:
What is a process?
Notion of client – supplier relationship
Hierarchy-based relationships Supplier-client relationships
From… To…

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Representation of a process:
Summary
Activities
Needs
Product/
service
Resources
Control mechanisms
Client Client

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Example of process map
Health care establishment
…
Financial
Management …
Purchasing
Human
Resources
Information
Systems
Transportation
Clinical
diagnostic
Entry Medical
Care
… Exit
Strategic
Planning
Quality
Management
Operational Processes
…..
 Management Processes 
 Support Processes 

7. danielducret@gmail.com© Daniel Ducret 2011
.
 Company infrastructure
 Human Resources Management
 Technology
 Procurement
Inbound
Logistics
Production Outbound
logistics
Marketing
& sales
Services
Support
activities
 Core activities 
Source: Michael Porter
Client
Process map
Michael Porter’s value chain
Value Chain: Diagram showing the major segments of the business participating
to the delivery of value to the client.

8. danielducret@gmail.com© Daniel Ducret 2011
Marketing R&D Purch. Prodon
. sale Logistics
Launching of new product on the market
Client
Process
Process approach:
Synergy between playersProcess
The Process approach breaks down barriers between departments
The process approach introduces horizontal management, crossing
the barriers between different functional units.

9. danielducret@gmail.com© Daniel Ducret 2011
Process approach and Quality
Cost of non-quality
Visible costs of non-
quality
20%
Hidden costs
80%
Loss of
crédibility
Loss of customers
Gain losses
Freight costs
Excess stock
Penalties
Demotivation of employees
Fines
Process stops
Waste
Additional
resources
Time
wasted

10. danielducret@gmail.com© Daniel Ducret 2011
New Quality approaches
Are ISO standards mandatory?
Are ISO standards mandatory?