Process Management

p i r z a d a
Process Management

Definition

Process management is the ensemble of activities of planning

and monitoring the performance of a process. The term
usually refers to the management of business processes and
manufacturing processes.
Process management is the application of knowledge, skills,
tools, techniques and systems to define, visualize, measure,
control, report and improve processes with the goal to meet
customer requirements profitably.
Process Management

Old needs of New Economy*

1999
 22 million shoppers
 $ 5 billion
 500% growth for leading on line retailers

Unhappy Customers
Quality problems associated with processes
Designing and managing effective processes

* On line retailing/ e-commerce

Process Management

Process Management is a
fundamental business activity!
Process Management

Helps:
 Preventing defects
 Eliminating wastes
 Redundancy

Better quality
Improved performance (shorter cycle time)
Improved flexibility
Faster customer response
Process Management

Principles of AT&T methodology

 Focuses on end-to-end process

 Prevention and continuous improvement
 Everyone manages a process and is a customer and supplier
 Customer needs drive process quality improvement
 Corrective action focuses on root cause rather than symptoms
 Process simplification reduces errors.
 Structured application of quality management principles are
key to success.
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Scope: Process management consists of three key activities:

design, control, and improvement.

- market knowledge, strategic planning, R&D,

managing supply chain, developing new processes

Two main categories:

 Value creation processes
 Support processes
Process Management

Value creation processes (Core Processes)

- most important to running the business
 Design processes
- incorporate customer requirements, new technology,
past learning into functional specifications

 Production/ delivery processes

- ensuring specification, producing economically and
efficiently.
Driven by external customer
Process Management

Support processes
- processes most important to an organization’s value
creation processes, employees and daily operations
(provide infra structure)
e.g. R&D, technology acquisition, managing supply chain

Driven by internal customer

See Table 17.1 page 317 for examples

Process Management

Leading practices

 Identify important value creation and support processes .

 Translate customer requirements into products/services early
in design process
 Use engineering and quantitative tools to ensure quality.
 Enhance cross-functional communication to reduce product
development time.
Process Management

Leading practices
 Define performance requirement for suppliers and develop
partnering relationships with key suppliers.
 Control quality and operational performance of key processes
using SQC principles.
 Continuously improve processes to achieve better quality,
cycle time and operational performance.
 Innovate to achieve breakthrogh performance using
benchmarking and reengineering.
Process Management

Product Design Processes

 Idea generation
 Preliminary concept development
 Product/process development
 Full scale production
 Market Introduction
 Market evaluation
Process Management

Cost, Manufacturability and Quality

 Design for Manufacturability (DFM)

 Design Quality and Social responsibility
 Design for Environment (DfE)
Process Management

Process Control

Process control is a statistics and engineering discipline that

deals with architectures, mechanisms and algorithms for
maintaining the output of a specific process within a desired
range.

Control is the activity of ensuring conformance

to the requirements and taking corrective actions
when necessary to correct problems and maintain
stable performance.
Process Management

Process Improvement

 Customer value depends on delivered value

 Delivered value depends on business processes
 Sustained success depend on continuous improving processes
 Continuous improving processes depends on continuous
 Improving value change processes
Process Management

Process Improvement Philosophies

Kaizen -"improvement", or "change for the better" refers to

philosophy or practices that focus upon continuous
improvement of processes in manufacturing, engineering,
game development, and business management.

Small, gradual, and frequent improvements

with minimum financial investment
Process Management
Process Management
Process Improvement Philosophies
Flexibility and Cycle Time Reduction

Flexibility refers to the

ability to adapt quickly &
effectively to changing
requirements. It might
mean rapid changeover
from one product to
another, rapid response to
changing demands, or the
ability to produce a wide
range of customized
services.
Process Management
Process Improvement Philosophies

Cycle Time Reduction

Cycle time refers to the time it takes to accomplish one cycle

of a process (e.g., the time from when a customer orders a
product to the time that it is delivered, or the time to
introduced a new product)
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Process Improvement Philosophies

Cycle Time Reduction

Simultaneous improvements in:

 Quality
 Cost
 Productivity
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Process Improvement
Philosophies

Breakthrough Improvement
refers to discontinuous
change. Requires innovative
and creative thinking
motivated by stretch goals or
breakthrough objectives.
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Benchmarking is defined as ‘measuring your performance against

that of best-in-class, determining how they achieved those
performance levels and using it hat information for your company’s
targets and strategies and implementations.

 Competitive benchmarking studying products and practices in

the same industry.
 Process benchmarking identifies most effective practices
 Strategic benchmarking to seek winning strategies
Process Management

Reengineering is defined as ‘the

fundamental rethinking and radical
redesign of business processes to
achieve dramatic improvements in
critical contemporary measures of
performance, such as quality, cost,
service and speed’.

Reengineering involves asking questions about

business processes:
Why do we do it? And what it is done this way?
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Reengineering

 Uncovers obsolete, and erroneous assumptions.

 Reinvents process
 Provides quantum leap.
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Reengineering requires:
 Fundamental understanding of processes.
 Creative thinking
 Effective use of IT.