LESSON 6: Process Focus

o Process – is a sequence of linked activities that is intended to achieve some result, such
as producing a good or service for a customer within or outside the organization.
 Processes involve combinations of people, machines, tools, techniques, materials
and improvements in a defined series of steps or actions.
 Common types of production processes include:
a. Machining
b. Mixing
c. Assembly
d. Filling orders
e. Approving loans
 Nearly every major activity within an organization involves a process that crosses
traditional organizational boundaries.
 A process perspective links together all necessary activities and increase one’s
understanding of the entire system, rather than focusing on only a small part.

o Process Management – involves planning and administering the activities necessary to

achieve a high level of performance in key organizational processes, and identifying
opportunities for improving quality and operational performance, and ultimately,
customer satisfaction.
 Process management consists of three major activities:
1. Design – focuses on ensuring that the inputs to the process, such as
materials, technology, work methods, and a trained workforce are
adequate; and that the process can achieve its requirements.
2. Control – focuses on maintaining consistency in output by assessing
performance and taking corrective action when necessary.
3. Improvement – focuses on continually seeking to achieve higher levels
of performance, such as reduced variation, higher yields, fewer defects
and errors, smaller cycle times and so on.
 Cycle time – refers to the time it takes to accomplish one cycle of a process.
 Cycle time is one of the most important metrics in process management.
 Process owners – individuals or groups who are accountable for process
performance and have the authority to control and improve their process.
 To apply the techniques of process management, processes must be:
1. Repeatable – means that the process must recur over time;
2. Measurable – provides the ability to capture important quality and
performance indicators to reveal patterns about process performance.
 Meeting these two conditions ensures that sufficient data can be collected to
reveal useful information for control and improvement.
o Identifying Processes and Requirements
 Value – creation Processes – are those most important to “running the business” and
maintaining or achieving a sustainable competitive advantage.
 Value – creation processes frequently align closely to an organization’s core
competencies and strategic objectives.
 Value – creation processes typically include product design and
production/delivery processes.
 In many organizations, value – creation processes take the form of projects –
temporary work structures that start – up, produce products or services, and then
shut down.
 Some organizations focus exclusively on projects because of the nature of
their work.
 They tend to deliver unique, one – of – a – kind products or services
tailored to the specific needs of an individual customer.
 Project management – involves all activities associated with planning,
scheduling, and controlling projects.
 Although every project is unique, many projects have similar underlying
processes; thus, viewing them from a process management perspective can
be beneficial.

 Support Processes – are those that are most important to an organization’s value –
creation processes, employees, and daily operations.
 They provide infrastructure for value – creation but generally do not add value
directly to the product or service.
 Support processes might include processes for finance and accounting,
facilities management, legal services, human resource services, public
relations, and other administrative services.
 Value – creation processes generally require a higher level of attention than do
support processes; however, failure to adequately manage support processes
can certainly impede the functioning of value -creation processes.
 Processes can be broken down in a hierarchical fashion. At the top level, an
organization must identify the major value – creation and support processes
that require attention by senior managers.
 Process Requirements – given the diverse nature of value – creation processes, the
requirements and performance characteristics might vary significantly for different
processes.
 In general, value – creation process requirements are driven by 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.
 Other critical support processes that lead to business success and growth
might be research and development, technology acquisition, supply chain
management and supplier partnering, mergers and acquisitions, project
management, or sales and marketing. These processes will differ greatly
among organizations, depending on the nature of products and services,
customer and market requirements, global focus and other factors.
 Identifying process requirements provides the basis for measuring process
performance.

o Process Design
 The goals of process design are to develop an efficient process that satisfies both
internal and external customer requirements and is capable of achieving the
requisite level of quality and performance.
 Other factors that might need to be considered in process design include
safety, cost, variability, productivity, environmental impact, “green”
manufacturing, measurement, capability, and maintainability of
equipment.
 Process design begins with understanding its purpose and requirements, who the
customer is, and what outputs are produced.
 The purpose of manufacturing process is to produce a component or
semifinished good for the next manufacturing process.
 The purpose of an order – taking process is to accurately identify in a
friendly fashion what a customer wants.
 Process design usually starts with a detailed technical analysis of characteristics
of the product, technological capabilities of machines and equipment, required
operations sequences, assembly methods, and so on, which are often conducted by
industrial or manufacturing engineers.
 A process design might start by identifying ways that customers prefer to place
orders and how long they are willing to wait.
 Technology is an integral part of process design that makes today’s service and
manufacturing processes operate productively and meet customer needs better
than ever.

o Process Mapping
 Designing a process requires a systematic approach.
  For most processes, this includes defining the sequence of steps that need
to be performed, along with formal documentation of procedures and
requirements.
 To describe the specific steps in a process and their sequence, we
generally develop a process map or flowchart, along with standard
operating procedures and work instructions.
 The process defines the steps and decision points required to achieve
certification, and ensures that all requirements are met.
 As design tools, flowcharts enable management to study and analyze
processes prior to implementation in order to improve quality and
operational performance.
 After a flowchart is developed, several fundamental questions can be asked to
analyze the process and create a more effective design:
1. Are the steps in the process arranged in logical sequence?
2. Do all steps add value? Can some steps be eliminated and should other
be added in order to improve quality or operational performance? Can
some be combined? Should some be reordered?
3. Are capacities of each step-in balance; that is, do bottlenecks exist for
which customers will incur excessive waiting time?
4. What skills, equipment, and tools are required at each step of the
process? Should some steps be automated?
5. At which points in the system might errors occur that would result in
customer dissatisfaction, and how might these errors be corrected?
6. At which point or points should quality be measured?
7. Where interaction with the customer occurs, what procedures and
guidelines should employees follow to present a positive image?
 In knowledge work, such as strategic planning or research development, process
does not necessarily imply formal sequences of steps, but general understandings
regarding competent performance. Thus, defining a process for knowledge rework
may not rely on process maps, but rather, general descriptions of requirements.

o Process Design for Services

 It is important to understand the fundamental differences between manufacturing
and service processes.
1. The outputs of service processes are not as well defined, as are
manufactured products.
2. Most service processes involve a greater interaction with customer,
often making it easier to identify needs and expectations.
 Service processes often involve both internal and external activities, a factor that
complicates design for quality.
  Internal activities are primarily concerned with efficiency (quality of
conformance), while external activities – with direct customer interaction
– require attention to effectiveness (quality of design).
 The success of the process depends on everyone – workers involved in internal as
well as external activities – understanding that they add value to the customer.
 Services have three basic components:
1. Physical facilities, processes, and procedures
2. Employee behavior;
3. Employee professional judgment.
 Designing a service essentially involves determining an effective balance among
all three of these. Too much or too little emphasis on one component will lead to
poor quality or inefficiency.
 A useful approach to designing services is to recognize that services differ in
three dimensions:
1. Customer contact and interaction,
2. Labor intensity,
3. Customization
 Services low in all three dimensions of this classification are more similar to
manufacturing organizations. The emphasis on quality should be focused on the
physical facilities and procedures; behavior and professional judgment are
relatively unimportant.
 As contact interaction between the customer and service system increases, the
customer’s impression of physical facilities, processes and procedures become
more important, as does the behavior of employees.
 The process design might have to include information to help customers
understand and follow the sequence of process steps.
 As labor intensity increases, variations between individuals become more
important, however, the elements of personal behavior and professional judgment
will remain relatively unimportant as long as the degrees of customization and
contact and interaction remain low.
 As customization increases, professional judgment becomes a bigger
factor in the ability to provide high quality service.
 In services that are high in all three dimensions, facilities, behavior, and
professional judgment must be equally balanced.

o Design for Agility

 As customer needs and expectation change, organizations must design processes
that are increasingly agile.
 Agility – is a term that is commonly used to characterize flexibility and short cycle
times.
  Agility is crucial to such customer – focused strategies as mass
customization – providing personalized, custom – designed products to
meet individual customer preferences at prices comparable to mass –
produced items.
 Flexibility – refers to the ability to adapt quickly and effectively to changing
requirements. It might mean rapid change – over from one product to another,
rapid responses to changing demands, or the ability to produce a wider range of
customized services.
 Flexibility might demand special strategies. It also involves outsourcing
decisions, agreements with key suppliers and innovative partnering
arrangements.

o Mistake – Proofing Processes

 Typical mistakes in production are omitted steps in a process, setup errors,
missing parts, wrong parts, or incorrect adjustments. Such errors can arise from
the following factors:
a. Forgetfulness due to lack of reinforcement or guidance
b. Misunderstanding or incorrect identification because of the lack of
familiarity with a process or procedures
c. Lack of experience
d. Absentmindedness and lack of attention, especially when a process is
automated
 Preventing mistakes can be done in three ways:
1. Designing potential defects and errors out of the process. This
approach is the best because it eliminates any possibility that the error
or defect will occur and will not result in rework, scrap, or wasted
time.
2. Identifying potential defects and errors and stopping a process before
they occur. Although this approach prevents defects and errors, it does
result in some non – value – added time.
3. Identifying defect and errors soon after they occur and quickly
correcting the process. This can avoid large amounts of costly defects
and errors in the future, but does result in some scrap, rework, and
wasted resources.
 Good design can eliminate many defects and errors but still cannot account for the
human factor.
 Poka – yoke (POH – kah YOH – kay) - is an approach for mistake – proofing
processes using automatic devices or simple methods to avoid human error. Poka
– yoke is focused on two aspects:
 1. Prediction, or recognizing that a defect is about to occur and providing
a warning;
2. Detection, or recognizing that a defect has occurred and stopping the
process.
 Poka – yokes are designed to facilitate this process or remove the human element
completely.
 The following list summarizes the typical types of service errors and related poka
– yokes.
1. Task errors include doing work incorrectly, work not requested, work
on the wrong order, or working too slowly.
2. Treatment errors arise in the contact between the server and the
customer.
3. Tangible errors – are those in physical elements of the service.
4. Customer errors in preparation – include the failure to bring necessary
materials to the encounter, to understand their role in the service
transaction, and to engage the correct service.
5. Customer errors during an encounter – can be due to inattention,
misunderstanding, or simply a memory lapse, and include failure to
remember steps in the process or to follow instructions.
6. Customer errors at the resolution stage of a service encounter –
include failure to signal service inadequacies, to learn from
experience, to adjust expectations, and to execute appropriate post –
encounter actions.

o Process Control
 Process control is important for two reasons:
1. Process control methods are the basis for effective daily management.
2. Long – term improvements cannot be made to a process unless the
process is first brought under control.
 Control – is the activity of ensuring conformance to the requirements and taking
corrective action when necessary to correct problems and maintain stable
performance.
 Any process performance measure naturally fluctuates around some
average level.
 Removing the causes of such abnormalities and maintaining consistent
performance is the essence of control. However, even a controlled process
that has too much variation can be detrimental to customer satisfaction and
financial performance.
 Process consistency was found to be at least as important as average performance
for better – performing firms, where customer expectations are high. Thus,
 improvement can mean changing the average performance to a new level or
reducing variation around the current average performance.
 Process control is the responsibility of those who directly accomplish the work.
 Long – term improvement is generally the responsibility of management, with the
help and engagement of the workforce.
 Any control has four elements:
1. A standard or goal,
2. A means of measuring accomplishment
3. Comparison of results with standard to provide feedback
4. The ability to make correction as appropriate.