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Process-Management Best Practices

Overview
y The scope of process management includes

process in manufacturing and service operations. y Processes are used to manufacture a product or to provide a service y Manufacturing process transform raw materials into finished goods using labor,equipment,energy and manufacturing facilities. y Managements challenge is to control the process variability so that outputs or outcomes meet the defined product specifications or service performance criteria

Business Process
y A process is a set of interrelated resources

and activities that transform inputs into outputs. y A product or service is the result of activities or processes. y Two kinds of process models exist: the as is process model and the to be process model.

Business Process
y The as is process model portrays how a

business process is currently structured. During process improvement efforts, The as is model is used to establish a baseline for measuring subsequent business improvement actions and processes. y The to be process model results from a business process redesign or reenginering action. It shows how the business process will function in the future after the improvement action is implemented.

Business Process
y A process owner should be assigned for

major business processes. This owner should be held accountable and responsible for the workings and improvement of one of the organizations defined-processes and its related sub processes

Business Processes
y The process owner should be closely involved in

the re-engineering team y Organizations should implement the following best practices to improve business processes: y Utilize business-process management tools to understand and evaluate a business process. y Understand and listen to the voice of the process in order to improve the business process.

Business Processes
y Increase production throughput by eliminating

bottlenecks in a process, y Reducing workloads on the bottleneck resource y Synchronizing process flows, acquiring newer and faster equipment,streamlining process flows, rearranging the work cells and giving employees incentives to work faster and smarter. y Increase service employees productivity through proper training, motivation and incentives.

Business Processes
y Decrease product and process cost by focusing

on value added activities such as process time,assembly time and core production time. y Decrease product and process cost by eliminating non-value-added activities and repeat activities and reducing waste. y Decrease investment in inventory and inventory levels at all storage locations with just in time methods and quick response system

Business Process Reengineering


y Business process reengineering (BPR) is a

management technique for achieving dramatic improvements in cost,quality, and customer service by making fundamental changes in the way an organization defines its mission and performs its work.

Business Process Reengineering


BPR is typically characterized by the following elements: y Challenging the current organizational mindset to become one that is more receptive to customers and the environment; driven by top-management efforts. y Identifying and analyzing core business processes y Applying cost/service/quality measures to determine how effectively they are meeting customer needs y Making systematic changes to organizations structure , culture, roles and responsibilities in order to support reengineered processes

Reengineering process
y Process reengineering changes should not be

constrained by the existing organizational structure,current thinking or culture of the organization. y A reengineering project is situational and specific to each process and to each organization. When a reenginering project leads to a new information requirements, it may be necessary to acquire new information technology to support those requirements

Reengineering principles
World class organizations have developed five principles for reengineering organizations in order to increase customer satisfaction and decrease operating cost by eliminating non-value-added activities. yPrinciple 1: Top management must be supportive of and engaged in reengineering efforts to remove barriers and drive success. yPrinciple 2: An organizations culture must be receptive to reenginering goals,objectives and principles.

Reengineering principles
yPrinciple 3: Major improvements and savings are

realized by focusing on the business from a process rather than a functional perspective. yPrinciple 4: Processes should be selected for reenginering based on a clear notion of customer needs, anticipated benefits, and potential for success. yPrinciple 5: Process owners should manage reenginering projects with teams that are crossfunctional, mantain a proper scope, focused on customer metrics, and can enforce implementation timelines and discipline.

Business process improvement


y It tends to be more of an incremental change that

may affect only a single task or segment of the organization y Methodology for BPI- Methodology for business operations improvements includes BPI, BPR, business process redesign,benchmarking and TQM programs or initiatives.

Business process improvement


y Championing business operations improvements

require the following five elements to be in place: y Invest money wisely- If outdated, labor intensive work process should be automated. It is essential for organizations to apply process improvement techniques to work processes . These techniques are often reffered to as BPR and BPI .

Business Process Improvement


y Implement change methodologies- Organizations

should apply methodologies such as BPI or BPR to evaluate targets for change and areas that could benefit from application of information technology. y Implement business process redesign effortsProcess redesign focuses on improving an entire business process where performance measurement and benchmarking indicate the opportunity or need for significant performance gains.
y Because it often requires additional resources or a

redistribution of existing resources,redesign requires more senior management attention .

Business Process Improvement


y Implement benchmarking techniques- In

benchmarking with others, an organization determines how leading organizations perform a specific process. Compares their method to its own and uses the information to improve upon or or completely change its process. It is typically a internal process performed by personnel within an organization who already have a thorough knowledge of the process under review. y Implement a TQM program- It is a management approach that emphasizes improving product or service quality while decreasing production or service costs by increasing the efficiency of work processes.

Business-process management to focus its management tools y Pareto Diagrams- allows


efforts on the problems that have the greatest potential for improvement by showing relative frequency and/or size in a descending bar graph. y Root cause analysis- study of the original reason for nonconformancewith a process. When the rootcause is removed or corrected, the nonconformance can be eliminated. It is a technique used to identify the conditions using who, what,when,where,why and how to better understand the root causes of issues and problems

Business-process management tools


y Flowcharting- can be used to document every

phase of a companys operation. y Flow charting is a first step toward the documentation of a process required for ISO 9000 and other quality awards. y In this way, problems can be traced quickly to the right source and corrected properly. y Also, The flowcharts can be used as a training tool or a reference document on the job

Business-process management tools


y Cause-and-effect diagrams used when a series

of events or steps in a process creates a problem and it is not clear which event or step is the major cause of the problem. y Stratification- a procedure used to describe the systematic subdivision of population or process data to obtain a detailed understanding of the structure of the population or process.

Business-process management tools


y Tree diagrams- Graphically shows any broad

goal divided into different levels of detailed actions. It encouragesteam members to expand their thinking when creating solutions. y Process-Mapping Analysis- is an illustrated description of how things get done, which enables team participants to visualize an entire process and identifies areas of strength and weaknesses.

Business process management tools


y Check Sheets- used for collecting data in a

logical and systematic manner. Data collected can be used in constructing a quality control chart, pareto diagram, or histogram. Most important use is that it enables the user to gather and organize data in a format that permits efficient and easy analysis of data. y Value analysis and value engineering- the organized and systematic study of every element of cost in a part, material, or service to make certain it fulfills its function at the lowest possible cost.

Business process management tools


y Run Charts- shows performance measures

monitored overtime to display variability in process output across time periods. Trend and seasonality factors can be observed. y Histograms- a bar chart showing the frequency distribution of observed performance characteristics such as weights, volume, response time, cost and customer experiences with the ordering process.

Business process management tools


y Scatter diagrams- shows the strength of two

variables of interest in a process under study. y Control charts - monitors variance in a process overtime and alert managements to unexpected variance, which may cause defects. A control chart is like a run chart and contains an upper control limit or lower control limit.

Business process management tools


y Statistical process control- is the application of

statistical methods to analyze data and to study and monitor process capability and performance.

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