CHAPTER 18

PROCESS
FOCUS

SILVERIO, SUATIN,
SUBIERE, TORRICO
LEARNING OBJECTIVES
After studying this chapter, you will be able to:

18-1 Explain what process management is.

18-2 Identify processes and requirements.
18-3 Discuss what process design is.
18-4 Explain process control in manufacturing and services.
18-5 Differentiate continuous improvement and breakthrough
improvement.
18-6 Discuss how to manage supply chain processes.
18-1. 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.

Generally, processes involve combinations of people, machines,

tools, techniques, materials, and improvements in a defined
series of steps or actions.
Exhibit 18.1
A process perspective links together all necessary activities and
increases one’s understanding of the entire system, rather than
focusing on only a small part. Many of the greatest opportunities for
improving organizational performance lie in the organizational
interfaces – those spaces between the boxes on an organization
chart.
18-1. 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.

Three major activities of process management:

(1) Design; (2) Control; (3) Improvement
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.
CONTROL

focuses on maintaining consistency in output

by assessing performance and taking
corrective actions when necessary.
IMPROVEMENT

focuses on continually seeking to achieve higher

levels of performance, such as reduced variations,
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. It is one of the most important metrics in process
management.
PROCESS OWNERS

Are individuals or groups who are accountable for process

performance and have the authority to control and improve their
process.

Process owners may range from high-level executives who manage

cross-functional processes to workers who run a manufacturing cell
or an assembly operation on the shop floor.
To apply the techniques of process management, process must be:
(1) repeateble and (2) measurable

Repeatability means that the process must recur over time. The cycle may
be long, as with product development processes; or it may be short, as with
a manufacturing operations.

Measurement provides the ability to capture important quality and

performance indicators to reveal patterns about process performance.
18-2. IDENTIFYING PROCESSES &
REQUIREMENTS

Leading organizations identify important processes throughout the value chain

that affect their ability to deliver customer value. These processes typically fall
into two categories: value-creation processes and support processes.
18-2 a. VALUE-CREATION PROCESSES

Sometimes called core processes; are those most important to

running the business and maintaining or achieving a sustainable
competitive advantage.

Frequently align closely to an organization's core competencies

and strategic objectives. They drive the creation of products and
services, are critical to customer satisfaction, and have a major
impact on the strategic goals of an organization.
Value-creation processes typically include product design
and production/delivery processes.

Product design processes involve all activities that are

performed to incorporate customer requirements, new
technology, and organizational knowledge into the
functional specifications of a manufactured good or
service.
Production/delivery processes create or deliver the
actual product; examples are manufacturing, assembly,
dispensing medications, teaching a class and so on.
18-2B. SUPPORT PROCESSES
Are those that are most important to an organization's value-
creation processes, employees, and daily operations.

Provides infrastructure for value creation processes, but

generally do not add value directly to the product or service.

Support processes might include processes for finance and

accounting, facilities manage legal services, human resource
services, public relations, and other administrative services in
a school system.
18-2C. PROCESS REQUIREMENTS
Understanding the requirements that processes should meet is vital to
designing them.
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, on the other hand, 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.

Identifying process requirements provides the basis for measuring

process performance.
PROCESS DESIGN
Begins with understanding its purpose and requirements,
who the customer is, and what outputs are produced.
Might start by identifying ways that customers prefer to place
orders and how long they are willing to wait
Usually starts with a detailed technical analysis of the
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.
PROCESS DESIGN

THE GOAL OF PROCESS DESIGN

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:
safety, cost, variability, productivity, environmental impact,
"green" manufacturing, measurement capability, and
maintainability of equipment.
PROCESS MAPPING

Designing a process requires systematic approach. For most Processes,

this includes defining steps that need be performed, along with formal
documentation of procedures and requirements.
PROCESS MAPPING

MAP OR FLOWCHART
This process is developed along with standard operating
procedures and work instructions to describe the specific
steps in a process and their sequence.
As design tools, flowcharts enable management to study
and analyze processes prior to implementation in order to
improve quality and operational performance.
EXHIBIT
18.6
PROCESS MAPPING

AT&T SUGGESTS THE FOLLOWING STEPS FOR BACKWARD

CHAINING:

1. Begin with the process output and ask, "What is the list
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.
PROCESS MAPPING

AT&T SUGGESTS THE FOLLOWING STEPS FOR BACKWARD

CHAINING:

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.
PROCESS DESIGN FOR SERVICES
Fundamental differences between manufacturing and service
processes:
First, the outputs of service processes are not as well defined, as
are manufactured products.
Second, most service processes involve a greater interaction
with the customer, often making it easier to identify needs and
expectations. On the other hand, customers often cannot define
their needs for service until after they have some point of
reference or comparison.
Service processes often involve both people and technology.
PROCESS DESIGN FOR SERVICES

Designing a service essentially involves:

determining an effective balance between people and
technology.
Too much or too little emphasis on one component will
lead to poor quality or inefficiency.
Too much emphasis on people and their behavior might
provide a friendly and personable environment at the
expense of slow, inconsistent, or chaotic service
PROCESS DESIGN FOR SERVICES

SERVICES DIFFER IN THREE DIMENSIONS:

1. customer contact and interaction,

2. labor intensity, and
3. customization.
PROCESS DESIGN FOR SERVICES

IN DESIGNING SERVICE PROCESSES, THE

FOLLOWING QUESTIONS SHOULD BE CONSIDERED:

1. What service standards are required to be met? What is the

final result of the service to be provided?
2. At what point does the service begin, and what signals its
completion?
3. What is the maximum waiting time that a customer will
tolerate?
4. How long should it take to perform the service?
PROCESS DESIGN FOR SERVICES

IN DESIGNING SERVICE PROCESSES, THE

FOLLOWING QUESTIONS SHOULD BE CONSIDERED:

5. Who must the consumer deal with in completing the

service?
6. What components of the service are essential? Desirable?
Superfluous?
7. Which components can differ from one service encounter
to another while still meeting standards?
DESIGN FOR AGILITY

Agility
a term that is commonly used to characterize flexibility and
short cycle times.
Electronic commerce, for instance, requires more rapid,
flexible, and customized responses than traditional market
outlets.
DESIGN FOR AGILITY
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 response to changing demands, or the ability to produce a
wide range of customized services.
might demand special strategies such as modular designs,
sharing components, sharing manufacturing lines, and
specialized training for employees.
involves outsourcing decisions, agreements with key suppliers,
and innovative partnering arrangements.
MISTAKE-PROOFING PROCESSES
Human beings tend to make mistakes inadvertently
Typical mistakes in production are omitted steps in a process, setup
errors, missing parts, wrong parts, or incorrect adjustments.
MISTAKE-PROOFING PROCESSES

Such errors can arise from the following factors:

1. Forgetfulness due to lack of reinforcement or guidance
2. Misunderstanding or incorrect identification because of the
lack of familiarity with a process or procedures
3. Lack of experience
4. Absentmindedness and lack of attention, especially when a
process is automated
MISTAKE-PROOFING PROCESSES

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.
This approach prevents defects and errors, it does result in
some non- value-added time.
MISTAKE-PROOFING PROCESSES

Preventing mistakes can be done in three ways:

3. Identifying defects 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.
MISTAKE-PROOFING PROCESSES

Poka-yoke (POH-kah YOH-kay)

an approach for mistake-proofing processes using
automatic devices or simple methods to avoid human error.
The poka-yoke concept was developed and refined in the
early 1960s by the late Shigeo.

Shingo
a Japanese manufacturing engineer who developed the
Toyota production system.
MISTAKE-PROOFING PROCESSES
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.
MISTAKE-PROOFING PROCESSES

Zero Quality Control, or ZQC ZQC

driven by simple and inexpensive inspection processes, such
as successive checking, in which operators inspect the work
of the prior operation before continuing, and self-checking,
in which operators assess the quality of their own work.
Poka-yokes are designed to facilitate this process or remove
the human element completely.
MISTAKE-PROOFING PROCESSES
The following list summarizes the typical types of service
errors and related poka-yokes:
Task errors
Treatment errors
Tangible errors
Customer errors in preparation
Customer errors during an encounter
Customer errors at the resolution stage of a service
encounter
PROCESS CONTROL
It focuses in maintaining the consistency in output by assessing the
performance and taking action when it is needed.
Control is the activity of ensuring conformance to the requirements
and taking corrective action when necessary to correct problem and
maintain stable performance.
 PROCESS CONTROL
The distinction of control and improvement is:

Improvement- can mean changing the average performance

to a new level or reducing the current average performance
Process control- responsibility of those who directly
accomplish the work, such as machine,operators, order-
fulfillment workers, and so on.
 PROCESS CONTROL
Any control system has four (4) elements:

A standard or goal
A means of measuring accomplishment
Comparison of results with the standard to provide feedback,
and
The ability to make corrections as appropriate.
PROCESS CONTROL
Any control system has four (4) elements:

1.) A standard or goal - defined during planning and design

process. They established what is supposed to be accomplished.
2.) A means of measuring accomplishment- These goals and
standards are reflected by measurable quality characteristics,
such as product dimensions, service times, or employee
behavior.
 PROCESS CONTROL
Any control system has four (4) elements:

3.) Comparison of results with the standard to provide feedback- by

comparing results with the standards or goals, one can determine
whether corrective action is needed.
4.) The ability to make corrections as appropriate- corrective action
entails adjusting machine settings or refraining employees.
After-action review / debrief questions.
what was supposed to hapen?
what actually happened?
Why was there a difference?
What can we learn?
PROCESS CONTROL
in MANUFACTURING

-Control is applied to incoming materials, key processes, and final products

and services. Control in manufacturing starts with purchasing and receiving
process. If the incoming materials are if poor quality, then the final procuts
will be no better. But if the quality of purchased materials is consistently
good, customers should not worry or rely on heavy inspection. In- process
control is needed throughout the production process in manufacturing
facilities to control quality. Final inspection represents the last point in the
manufacturing process at which the producer can verify that the product
meets customer requirements.
 PROCESS CONTROL
in MANUFACTURING

-effective quality control system includes documented procedure 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.

-Documented control procedure are written down in a PROCESS CONTROL

PLAN to monitor accuracy and variability of equipment, and environmental
factors such as time and temperature.
PROCESS CONTROL
in SERVICES

It follows the same paradigm as in manufacturing: define a standard or

goal, measure accomplishment, compare results with the standard, and
make corrections if needed. In services with high customer contact, labor
intensity, and/or customization, control can be challenging. Human
behavior- both the customer's and the service provider's- is more
difficult to control than mechanical or automated processes.
PROCESS IMPROVEMENT
In 1950, W. Edwards Deming emphasized the importance of
continuous improvement in Japan's postwar rebuilding efforts.
He presented a diagram illustrating the relationships among
inputs, processes, outputs, consumer roles, organizational
processes, consumer research, and the importance of
continuous improvement. Deming predicted that Japanese
manufacturers would produce high-quality products within five
years, but by applying these ideas, they penetrated multiple
global markets in less than four years.
-Continuous improvement, encompassing both incremental and
breakthrough changes, is a fundamental principle of total quality
and a crucial business strategy in competitive markets.

•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.
learning cycle consists of four stages:
1. Planning
2. Execution of plans
3. Assessment of progress
4. Revision of plans based upon assessment findings
 CONTINUOUS IMPROVEMENT
The concept of continuous improvement has its roots in the United
States, with the National Cash Register Company (NCR) being one of
the earliest examples. NCR implemented improvements such as better
lighting, safety devices, ventilation, and offering evening classes to
improve employee skills. Other companies like Lincoln Electric and
Procter & Gamble also developed innovative approaches, focusing on
productivity and cost. Toyota pioneered just-in-time (JIT), establishing
the philosophy of kaizen.
Process benchmarking identifies the most effective practices in key
work processes in organizations that perform similar functions, no
matter in what industry.

Reengineering has been defined as “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.
 MANAGING SUPPLY CHAIN
PROCESSES
Supply chains are crucial business processes that encompass key value-
creation and support processes like supplier selection, certification,
purchasing, logistics, receiving, and performance measurement. They help
create a competitive advantage in delivery, flexibility, and cost reduction.
Companies that excel in supply chain operations also perform better in
other financial measures of success.
SUPPLIER PARTNERSHIPS

Suppliers include not only companies that provide materials and

components, but also distributors, transportation companies, and
information, health care, and education providers. Key suppliers might
provide unique design, technology, integration, or marketing
capabilities that are not available within the business, and therefore
can be critical to achieving such strategic objectives as lower costs,
faster time-to-market, and improved quality.
Effective supply chain manangement is based on three guiding
principles:

1. Recognizing the strategic importance of suppliers in accomplishing

business objectives, particularly minimizing the total cost of ownership,
2. Developing win-win relationships through long-term partnerships
rather than as adversaries, and
3. Establishing trust through openness and honesty, thus leading to
mutual advantages.
SUPPLIER CERTIFICATION

Supplier certification processes are used by companies to manage their

supply chain by grading and certifying suppliers who provide quality
materials cost-effectively and timely. These processes motivate high-
quality suppliers to improve and attract more business.
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