Chapter 5 Process Focus

Responsibility of management
important to understand how to design, manage and improve process
Quality problem
associated with process
Process
a sequence of linked activities that is intended to achieve some result, combinations of people, machines, tools, techniques, materials, and improvements in a defined series of steps or actions, linked together all necessary activities instead of focusing on one small part (e.g. producing goods and services)
Process & functions
a process within an organisation crosses the traditional organisational boundaries (e.g. budget for marketing department handles by finance department)
Key process management principles for performance excellence 1
1. Identify and document vital work processes that relate to core competencies and deliver customer value, profitability, organizational success, and sustainability.
2. Determine key work process requirements, incorporating input from customers, suppliers, partners, and collaborators.
3. Utilize cross function team in product development process
4. Define performance requirements for supplier, from long term relationships with supplier and buyer.
Key process management principles for performance excellence 2
5. Implement work processes and control their day-to-day operation to ensure that they meet design requirements, the application of systematic methods
6. Improve work processes to achieve better performance, reduce variability, improve products and services, and keep processes current with business needs and directions, and share improvements with other organizational units and processes to drive organizational learning and innovation.
7. Innovate to attain breakthrough performance via benchmarking and reengineering
Process management
planning and administering the activities necessary to achieve a high level of performance in key business processes, identifying opportunities for improving quality and operational performance, and ultimately, customer satisfaction
Process management activities (3)
design, control and improvement

Design=Ensuring that the inputs to the process are adequate and the process can achieve its requirements.
Control=Maintaining consistency in output by assessing performance and taking corrective action when necessary.
Improvement=Continually seeking to achieve higher levels of performance in the process

Types of processes
Value creation=design and production/delivery
Support process

Value-creation processes – those most important to “running the business”
Design processes – activities that develop functional product specifications
Production/delivery processes – those that create or deliver products
Support processes – those most important to an organisation’s value creation processes, employees, and daily operations

Process requirements
Value creation process requirements usually depend on consumer or external customer needs.
Support process requirements are driven by internal customer needs and must be aligned with the needs of key value-creation processes
Process design
The goal of process design is to develop an efficient process that satisfies both internal and external customer requirements and capable of achieving the necessary level of quality and performance.
Process design considerations include safety, cost, variability, productivity, environmental impact, measurement capability, and maintainability of equipment.
Process mapping
Process map (flow chart) defines the sequence of steps to be performed and formal documentation of procedures and requirements, allow org to spot any errors that might hinders a process before its implementation
Developing process map
1. Begin with the process output and ask, “What is the last essential subprocess that produces the output of the process?”
2. For that subprocess, ask, “What input does it need to produce the process output?” For each input, test its value to ensure that it is required.
3. For each input, identify its source. In many cases, the input will be the output of the previous subprocess. In some cases, the input may come from external suppliers.
4. Continue backward, one subprocess at a time, until each input comes from an external supplier
Analysing process map
Are the steps in the process arranged in logical sequence?
Do all steps add value? Can some steps be eliminated and should others be added in order to improve quality or operational performance? Can some be combined?
At which point in the step, do bottlenecks exist for which customers will incur excessive waiting time?
What skills, equipment, and tools are required at each step of the process? Should some steps be automated?
At which point or points should quality be measured?
Documentation: what procedures and guidelines should employees follow to present a positive image?
Mistake proofing processes
Reasons for mistakes and errors:
Forgetfulness (due to lack of reinforcement or guidance),
Misunderstanding or incorrect identification (because of the lack of familiarity with process or procedures)
Lack of experience
Absentmindedness and lack of attention, especially when a process is automated
Poka-Yoke
An approach to mistake proofing a process, using automatic devices or simple methods to avoid human error.
Based on:
Prediction, or recognizing that a defect is about to occur and providing a warning
Detection, or recognizing that a defect has occurred and stopping the process.
Process control
Control – the activity of ensuring conformance to requirements and taking corrective action when necessary to correct problems and maintain stable performance
Control is different from improvement:
Elements of control systems
(1) a standard or goal,
(2) a means of measuring accomplishment,
(3) comparison of results with the standard to provide feedback, and
(4) the ability to make corrections as appropriate.
Control and improvement
basis for organizational learning and lead to improvement and prevention of defects and errors.
After-action review
What was supposed to happen?
What actually happened?
Why was there a difference?
What can we learn?
Process control in manufacturing
Control is usually applied to incoming materials, key processes, and final products and services.
Effective quality control systems include
Make it right first time
Supplier relationship
Process owner inspection
Final inspection

Documented policies and procedures for all key processes;
Methods for monitoring and controlling critical quality characteristics;

Process control in services
Self-control of the individual employee based on their spontaneous and learned behavior.
Basic control mechanisms, which are carried out by every member of the workforce. The first person who detects a problem is empowered to break away from routine duties, investigate and correct the problem immediately, document the incident, and then return to their routine.
Critical success factor control for critical processes. Process teams use customer and organizational requirement measurements to determine quality, speed, and cost performance. These measurements are compared against benchmarks and customer satisfaction data to determine corrective action and resource allocation. In addition, The Ritz-Carlton conducts both self-audits and outside audits.
Continuous improvement
refers to both incremental changes, which are small and gradual, and breakthrough improvements, which are large and rapid.
Continuous improvement is important because
Customer loyalty is driven by delivered value.
Delivered value is created by business processes.
Sustained success in competitive markets requires a business to continuously improve delivered value.
To continuously improve value-creation ability, a business must continuously improve its value-creation processes.
Continuous improvement diagram
Approaches to continuous improvement
Kaizen
Flexibility and Cycle Time reduction
Breakthrough vs Incremental Improvement
Reengineering and
Benchmarking
Kaizen
gradual and orderly continuous improvement
Focus on small, gradual, and frequent improvements over the long term with minimum financial investment, and participation by everyone in the organization; making improvement .
Success factors in Kaizen
Operating practice like JIT that expose waste and inefficiency and hence reveals new improvement opportunities.
Total involvement – Top management make improvement as culture and provide support activities like resources, reward structure.
Middle manager provide detail standards that reflect goals, improve cooperation between departments and developing problem solving skills through training. Supervisor provide guidance than direct (empowered). Individual staff engage through suggestion scheme, small group team activities. Self development programme that teach problem-solving techniques and improve job performance skills
Training both in philosophy and tools application.
Breakthrough improvement
refers to discontinuous change, as opposed to the gradual, continuous improvement philosophy of kaizen.
Breakthrough improvements result from innovative and creative thinking; often these are motivated by stretch goals, or breakthrough objectives.
Benchmarking
Benchmarking – “the search of industry best practices that lead to superior performance.”
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.
Methods of benchmarking
Talk to industrial customers, visit to companies; mystery shoppers;, trade shows and journals, professional societies like MNQA. Product descriptions and outside consultant.
Types of benchmarking
Competitive benchmarking – studying products or business results against competitors to compare pricing, technical quality, features, and other quality or performance characteristics.
Process benchmarking – identifying the most effective practices in key work processes in organizations that perform similar functions, no matter in what industry.
Flexibility
The ability to adapt quickly and effectively for changing requirement. E.g.: Handphone, car, e-commerce.
Modular designs, sharing manufacturing and specialized training, outsourcing, agreeing with key suppliers.
Rapid changeover from one product to another,
Rapid response to produce a wide range of new/customized products
Reengineering
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.

Client charters; Land transport checking; business permit, LDP ministrial decision.

Four broad approaches to managing improvement
Total quality management (TQM) – puts quality and improvement at the heart of everything that is done by an operation.

JIT and Lean – an approach that emphasizes the smooth flow of items synchronized to demand so as to identify waste.

Six Sigma – a disciplined methodology of improving every product, process, and transaction.

All these improvement approaches share overlapping sets of elements.