Wisdom from Texas Importance of Process Management

Instruments •Prevent defects and errors,

"Unless you change the process,
why would you expect the results
to change"
Key Idea
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.
Key Idea
In many companies, value-
creation processes take the form
of projects- temporary work
structures that start up, produce
products or services, and then
shut down.
•Eliminate waste and redundancy,
•Lead to better quality and improved company performance through shorter
cycle times, improved flexibility, and faster and more consistent customer
response.
Key Process Management Principles for Performance Excellence
•Identify vital work processes that relate to core competencies and deliver
customer value, profitability, organizational success, and sustainability.
•Determine key work process requirements, incorporating input from
customers, suppliers, partners, and collaborators.
•Design and innovate work processes to meet all requirements, incorporating
new technology, organizational knowledge, cycle time, productivity, cost
control, and other efficiency and effectiveness factors.
•Minimize overall costs associated with inspections, tests, and process or
performance audits, and seeking to prevent defects, service errors, and rework
and minimize warranty costs or customers' productivity losses, as appropriate.
•Implement work processes and control their day-to-day operation to ensure
that they meet design requirements, using appropriate performance measures
along with customer, supplier, partner, and collaborator input as needed.
•Improve work processes to achieve better performance, reduce variability,
improve products and services, and kcep processes current with business
needs and directions, and share improvements with other organizational units
and processes to drive organizational learning and innovation.

Process Requirements
•Value creation process
requirements
-Usually depend significantly on
product and service
characteristics.
•Support process requirements
-Usually depend on internal
requirements, and they must be Types of Processes
coordinated and integrated to •Value-creation processes- those most important to "running the business"
ensure efficient and effective ~Design processes- activities that develop functional product specifications
linkage and performance. ~Production/delivery processes-those that create or deliver products
•Support processes - those most important to an organization's value creation
processes, employees, and daily operations

Key Idea AT&T Process Management Principles

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.
•Process improvement focuses on the end-to-end process.
•The mind-set of quality is one of prevention and continuous improvement.
•Everyone manages a process at some level and is simultaneously a customer and a
supplier.
•Customer needs drive process improvement.
•Corrective action focuses on removing the root cause of the problem rather than on
treating its symptoms.
•Process simplification reduces opportunities for errors and rework.
•Process improvement results from a disciplined and structured application of the
quality management principles
 Process Management Activities Requirements for Process Management
•Design •Processes must be repeatable
-ensuring that the inputs to the process, such as materials, • Process must be measurable
technology, work methods, and people are adequate, and that the
process steps are well-defined, mistake-proofed, sequenced Meeting these two conditions ensures that
properly, lean, and understood for consistent and effective sufficient data can be collected to reveal
execution. useful information for evaluation and
•Control control, as well as learning that leads to
-assessing whether the process performed as planned and the improvement and maturity.
process output is on target.
Improvement
-continually seeking to achieve higher levels of performance in the
process, such as reduced variation, higher yields, fewer defects and
Designing Work Processes
errors, and so on.
•Process design can have impact on
-Cost
-Agility
-Quality
Key Idea
The goal of process design is to develop an efficient procedure to
•Agility refers to flexibility and short cycle
satisfy both internal and external customer requirements.
times.
Enablers of agility include
- close relationships with customers to
Key Idea
understand their emerging needs and
Flexibility refers to the ability to adapt quickly and effectively to
requirements,
changing requirements. It might mean rapid changeover from one
-empowering employees as decision makers,
product to another, rapid response to changing demands, or the
-effective manufacturing and information
ability to produce a wide range of customized services.
technology,
-close supplier and partner relationships, and
-breakthrough improvement.
Process Design
1. Identify the product or service: What work do I do?
2. Identify the customer: Who is the work for? 3. Identify the
supplier: What do I need and from whom do I get it?
4. Identify the process: What steps or tasks are performed? What Service Process Design
are the inputs and outputs for each step? •Three basic components:
5. Mistake-proof the process: How can I eliminate or simplify Physical facilities, processes and procedures
tasks? What "poka yoke" (i.e., mistake-proofing) devices can I Employee behavior
use? Employee professional judgment
6. Develop measurements, controls, and improvement goals: How
do I evaluate the process? How can I improve further?
Mistake-Proofing Processes Typical
reasons for mistakes and errors:
•Forgetfulness due to lack of concentration
•Misunderstanding because of the lack of
familiarity with a process or procedures Poor
identification associated with lack of proper
attention
Key Idea •Lack of experience
Poka-yoke (POH-kah YOH-kay) is an approach for mistake- •Absentmindedness
proofing processes using automatic devices or methods to avoid •Delays in judgment when a process is
simple human error. automated
•Equipment malfunctions

•Poka-yoke is 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.
Three levels:
Service Errors
•Task errors include doing work incorrectly, work not requested, work on the wrong order, or working too slowly.
•Treatment errors in the contact between the server and the customer, such as lack of courteous behavior, and failure
to acknowledge, listen, or react appropriately to the customer.
•Tangible errors, such as unclean facilities, dirty uniforms, inappropriate•Designing
temperature, and out
potential errors document errors.
of the process.
•Identifying potential defects and stopping a process before the
•Customer errors in preparation such as the failure to bring necessary materials to the encounter, to understand their
defect is produced.
role in the service transaction, and to engage the correct service, •Finding defects that enter or leave a process.
•Customer crrors during an encounter such as inattention, misunderstanding, or simply a memory lapse, and include
failure to remember steps in the process or to follow instructions.
•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.

Process Control Key Idea

Control - the activity of ensuring
conformance to requirements and taking
corrective action when necessary to
correct problems and maintain stable
performance
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.

Components of Control Systems

Control and Improvement •Any control system has three components:
- Control should be the basis for 1. a standard or goal,
organizational learning and lead to 2. a means of measuring accomplishment, and
improvement and prevention of defects 3. comparison of actual results with the standard, along with feedback
and errors. to form the basis for corrective action.
-action review
- What was supposed to happen?
-What actually happened? Key Idea
-Why was there a difference? In manufacturing, control is usually applied to incoming materials,
-What can we learn? key processes, and final products and services.

Effective Control Systems

Kaizen
Kaizen – a Japanese word that means
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.
Cycle Time Improvement
•Cycle time – the time it takes to
accomplish one cycle of a process.
- Documented procedures for all key processes;
- A clear understanding of the appropriate equipment and working
environment;
-Methods for monitoring and controlling critical quality
characteristics;
- Approval processes for equipment;
-Criteria for workmanship, such as written standards, samples, or
illustrations; and
-Maintenance activities.
Key Idea
A kaizen blitz is an intense and rapid improvement process in which
a team or a department throws all its resources into an improvement
project over a short time period, as opposed to traditional kaizen
applications, which are performed on a part-time basis.
• Reductions in cycle time serve two purposes
-First, they speed up work processes so that customer response is improved.
- Second, reductions in cycle time can only be accomplished by streamlining and simplifying processes to
eliminate non-value-added steps such as rework.

Quality Control in Services

Example: The Ritz-Carlton Hotel Company
-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
benchmarksx and customer satisfaction data to determine corrective action and resource allocation. In addition, The
Ritz-Carlton conducts both self-audits and outside audits.
Importance of Process Improvement
- 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.

Key Idea Plan

Improvement should be a proactive task of management and be
viewed as an opportunity, not simply as a reaction to problems and
competitive threats.
Process Improvement Methodologies
• Redefining and analyzing the problem: Collect and organize
information, analyze the data and underlying assumptions, and
reexamine the problem for new perspectives, with the goal of
achieving a workable problem definition.
•Generating ideas: “Brainstorm” to develop potential solutions.
•Evaluating and selecting ideas: Determine whether the ideas have
merit and will achieve the problem solver’s goal.
•Implementing ideas: Sell the solution and gain acceptance by
those who must use them.
Do
1.Conduct a pilot study or experiment to test the impact of the
potential solution(s).
2. Identify measures to understand how any changes or solutions
are successful in addressing the perceived problems.
Study
1. Examine the results of the pilot study or experiment.
2. Determine whether process performance has improved.
3. Identify further experimentation that may be necessary.
1.Define the process: its start, end, and what it
does.
2. Describe the process: list the key tasks
performed and sequence of steps, people involved,
equipment used, environmental conditions, work
methods, and materials used.
3. Describe the players: external and internal
customers and suppliers, and process operators.
4.Define customer expectations: what the
customer wants, when, and where, for both
external and internal customers.
5.Determine what historical data are available on
process performance, or what data need to be
collected to better understand the process.
6.Describe the perceived problems associated with
the process; for instance, failure to meet customer
expectations, excessive variation, long cycle
times, and so on.
7. Identify the primary causes of the problems and
their impacts on process performance.
8.Develop potential changes or solutions to the
process, and evaluate how these changes or
solutions will address the primary causes.
9.Select the most promising solution(s).
 Act
1.Select the best change or solution.
2.Develop an implementation plan: what needs to be done, who should be involved, and when the plan should be
accomplished.
3.Standardize the solution, for example, by writing new standard operating procedures.
4.Establish a process to monitor and control process performance.
Key Idea
The Deming cycle focuses on both short-
term continuous improvement and long-term
organizational learning.
Key Idea
How one approaches problem solving is not
as critical as doing it in a systematic fashion,
whether one uses the Deming cycle, FADE,
Juran’s approach, CPS, or some hybrid
variation.
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.
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.
Key Idea
Reengineering involves asking basic
questions about business processes: Why do
we do it? And Why is it done this way?
Creative Problem Solving
*Mess Finding – identify symptoms
*Fact Finding- gather data; operational definitions
*Problem Finding – find the root cause
*Idea Finding – brainstorming
*Solution Finding – evaluate ideas and proposals
*Implementation – make the solution work
Breakthrough Improvement
- Discontinuous change resulting from innovative and creative
thinking, motivated by stretch goals, and facilitated by
benchmarking and reengineering
Key Idea
Stretch goals force an organization to think in a radically different
way, and to encourage major improvements as well as incremental
ones.
Types of Benchmarking
* 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.
*Process benchmarking – focus on key work processes
*Strategic benchmarking -focus on how companies compete and
strategies that lead to competitive advantage.
Process Management in the Baldrige Award Criteria
*The Process Management Category examines how an
organization designs its work systems and how it designs,
manages, and improves its key processes for implementing those
work systems to deliver customer value and achieve organizational
success and sustainability, and prepare for emergency readiness.
6.1Work Systems
a. Work System Design
b. Key Work Processes
c. Emergency Readiness
6.2 Work Processes
A . Work Process Design
b. Work Process Management
c. Work process lmprovement
Process Management in ISO 9000
* Planning and controlling the design and development of products and managing the interfaces
between different groups involved in design and development
*Management of inputs and outputs for design and development activities, and use of systematic
reviews to evaluate the ability to meet requirements, identify any problems, and propose necessary
actions: purchasing processes, control of production and service, including measurement and
process validation; control of monitoring and measuring devices used to evaluate, conformity,
analysis and improvement; monitoring and measurement of quality management processes; and
continual improvement, including preventive and corrective action.
*Use quality policy, objectives, audit results, data analysis, corrective and preventive actions, and
management reviews to continually improve its quality management system’s effectiveness

Process Management in Six Sigma

* Understanding and improving processes on a project-by-project basis, Projects
are clearly linked to strategic needs and organizational objectives, and that
projects are managed under a common framework.
*The Six Sigma team-project approach provides a natural fit with the
requirements of product and process design, control, and improvement.
*Process owners should be trained in Six Sigma methods and be involved in
formal Six Sigma projects, but still have responsibility for continuous
improvement on a daily basis.
Key Idea
In manufacturing, control is usually applied to incoming materials, key
processes, and final products and services.