COSC 23 Quality Consciousness, Habits and Processes

PAGE 22COSC23 Quality Consciousness, Habits and Processes

Chapter III Business Process

1. Finance responsible for securing financial resources at favorable prices and allocating those resources throughout the organization2. Operations responsible for producing the goods or providing the services offered by the organization

3. Marketing responsible for the selling and promotions of the product

Production of Goods vs Delivery of Services

(Manufacturing) (Service)

goods-oriented act-oriented

Differences:

1. degree of customer contact

Service involves much higher degree of customer contact than manufacturing because the performance of a service often occurs at the point of consumption. Otherwise, the manufacturing allows a separation between production and consumption and therefore occurs away from the customer

2. uniformity of input

Job requirements for manufacturing are generally more uniform than for services.

3. labor content of jobs

Many services involve higher labor content than manufacturing operations

4. uniformity of output

Uniformity of output is more visible in manufacturing

5. measurement of productivity

Measurement of productivity is more straightforward in manufacturing due to the high degree of uniformity of most manufactured items.

6. production and delivery

Customers receive the service as it is performed

7. quality assurance

Quality at the point of creation is typically more evident for services than for manufacturing, where errors can be corrected before the customer receives the output.8. amount of inventory

Manufacturing have more inventory (raw materials, partially completed items, finished goods) on hand

9. evaluation of work

Evaluation is much easier in manufacturing since tangible output is easier to evaluate or to test than intangible output.

TRENDS IN BUSINESS

Business organizations must be updated of current trends and take them into account in their strategic planning.

Major Trends

1. Internet

E-business involves the use of the Internet to transact business

E-commerce customer business transactions such as buying online or requesting information

2. Management of Technology

Technology application of scientific discoveries to the development and improvement of goods and services

3 Kinds of Technology

a. Product and Service Technology discovery and development of new products and services

b. Process Technology development of new methods, procedures and equipment used to produce goods and provide services

c. Information Technology science and use of computers and other electronic equipment to store, process and send information

Computers have a tremendous impact on businesses in many ways, including new product and service features, process management, advances in materials, methods and equipment.

However, technological advances also place a burden on management. Example, management must keep abreast of changes and quickly assess both their benefits and risks. New technologies often carry a high price tags and usually a high cost to operate or repair. And in case of computer operating systems, as new systems are introduced, support for older versions is discontinued, making periodic upgrades necessary.

3. Management of supply chain

Supply chain sequence of activities and organizations involved in producing and delivering a good or service

The sequence begins with the basic supplier of raw materials and extends all the way to the final customer.

4. Outsourcing

buying goods or services rather than producing goods or performing services within the organization

5. Agility

ability of an organization to respond quickly to demands or opportunities

strategy that involves maintaining a flexible system that can quickly respond to changes in either the volume of demand or changes in product or service offerings

6. Ethical Behavior

Competitiveness

how effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services.

Business organizations compete through some combination of their marketing and operations functions.

Marketing influences competitiveness in several ways:

1. Identifying customer wants and needs basic input in an organizations decision making process

2. Pricing usually a key factor in consumer buying decisions

3. Advertising and Promotion ways organizations can inform potential customers about features of their products or services and attract buyers

Operations influences competitiveness through:

1. Product and Service Design special characteristics or features of a product or service2. Cost of an organizations output affects pricing decisions and profits

3. Location must be accessible and conveniently located

4. Quality materials, workmanship, design and service

5. Quick Response quickly bringing new or improved products or services to the market

quickly deliver existing products and services to a customer after they are ordered

quickly handling of customer complaints

6. Flexibility ability to respond to changes (alterations in design features of a product or service)

7. Inventory management supplies of goods must be equal to the demands

8. Supply chain management timely and cost-effective delivery of goods

9. Service after sale activities (setup, warranty work and technical support)

10. Managers and workers people considered as the heart and soul of an organization

BUSINESS PROCESS a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer

a series of steps designed to produce a product or service

a set of linked activities that take an input and transform it to create an output

List of characteristics for a business process

1. Definability It must have clearly defined boundaries, input and output

2. Order It must consist of activities that are ordered according to their position

3. Customer There must be a recipient of the process outcome, a customer4. Value-adding The transformation taking place within the process must add value to the customer

5. Embeddedness A process cannot exist in itself, it must be embedded in an organizational structure.

6. Cross-functionality A process regularly can span several functions.

Business Process Automation (BPA)

- consists of integrating applications, and using software applications throughout the organization

Techniques for delivering automation in a process

1. Extension of existing IT systems extends the functionality to enable the desired automation

2. Purchase of a specialist BPA tool

Specialist companies are now bringing toolsets to market which are purpose built for the function of BPA. It attempts to provide automation by exploiting the user interface layer rather than going deeply into the application code or databases sitting behind them. They also simplify their own interface to the extent that these tools can be used directly by non-technically qualified staff.

Business Process Reengineering (BPR)

is a management approach aiming at improvements by means of elevating efficiency and effectiveness of the processes that exist within and across organizations.

Hammer & Champy (1993) identified several so called disruptive technologies that were supposed to challenge traditional wisdom about how work should be performed.1. Shared databases, making information available at many places

2. Expert systems, allowing generalists to perform specialist tasks

3. Telecommunication networks, allowing organizations to be centralized and decentralized at the same time

4. Decision-support tools, allowing decision-making to be a part of everybody's job

5. Wireless data communication and portable computers, allowing field personnel to work office independent

6. Interactive videodisk, to get an immediate contact with potential buyers

7. Automatic identification and tracking, allowing things to tell where they are, instead of requiring to be found

Business Process Modeling

is the activity of representing both the current ("as is") and future ("to be") processes of an enterprise, so that the current process may be analyzed and improved

an anticipation of what the process will look like

is typically performed by business analysts and managers who are seeking to improve process efficiency and qualityThe goals of a process model are to be:

Descriptive

Track what actually happens during a process.

Takes the point of view of an external observer who looks at the way a process has been performed and determines the improvements that have to be made to make it perform more effectively or efficiently.

Prescriptive

Defines the desired processes and how they should/could/might be performed.

Lays down rules, guidelines, and behavior patterns which, if followed, would lead to the desired process performance. They can range from strict enforcement to flexible guidance.

Explanatory

Provides explanations about the rationale of processes.

Explore and evaluate the several possible courses of action based on rational arguments.

Establish an explicit link between processes and the requirements that the model needs to fulfill.

Pre-defines points at which data can be extracted for reporting purposes. Business Process ImprovementSet priorities for small, focused problems to solve, and when effective solutions are found, aggressively institute the changes. The classic Plan, Do, Check and Act is a simple and effective improvement process to follow:

PLAN by flow-charting the current business process, analyzing the root cause of problems and determining a course of action.

DO carry out the planned changes.

CHECK to see if the changes solve the problem.

ACT to make refinements, if necessary and close improvement.

When problems start disappearing one by one, everyone can take pride in their accomplishments. If improvements are made every month, within a year noticeable improvements can be made throughout the business. Each improvement will get each manager closer to being a full-time manager and leader.

Business Organization

Finance

Operations

Marketing

Cavite State University Cavite City Campus