MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 1 Chapter 7 Process Management

MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 1

Chapter 7Chapter 7

Process

Management


Wisdom from Texas Instruments

“Unless you change the process, why would you expect the results to change”


Key Idea

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.


AT&T Process Management Principles

• Focus on end-to-end process• Mindset of prevention and continuous

improvement• Everyone manages a process at some

level and is a customer and a supplier• Customer needs drive the process• Corrective action focuses on root

cause• Process simplification reduces errors


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.


Types of Processes

Value-creation processes – those most important to “running the business” Design processes – activities that develop

functional product specifications 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


Control vs. ImprovementControl vs. Improvement

Controlled process

Improvement

Time

New zoneof control

Out-of-control


Leading Practices (1 of 2)Leading Practices (1 of 2)

Define, document, and manage important value creation and support processes

Translate customer requirements and internal capabilities into product and service design requirements early in the process

Ensure that quality is built into products and services and use appropriate tools during development

Manage product development process to enhance communication, reduce time, and ensure quality


Leading Practices (2 of 2)Leading Practices (2 of 2)

Define performance requirements for suppliers and ensure that they are met

Control the quality and operational performance of key processes and use systematic methods to identify variations, determine root causes, and make corrections

Continuously improve processes to achieve better quality, cycle time, and overall operational performance

Innovate to achieve breakthrough performance using benchmarking and reengineering

Plan and ensure continuity of operations


Product Development ProcessProduct Development Process

Ideageneration

Ideageneration

Conceptdevelopment

Conceptdevelopment

Product &process design

Full-scaleproduction

Full-scaleproduction

Productintroduction

Productintroduction

Marketevaluation

Marketevaluation


Key Idea

Product design can significantly affect the cost of manufacturing (direct and indirect labor, materials, and overhead), redesign, warranty, and field repair; the efficiency by which the product can be manufactured, and the quality of the output.


Design for ManufacturabilityDFM – the process of designing a

product for efficient production at the highest level of quality


Key Idea

DFM is intended to prevent product designs that simplify assembly operations but require more complex and expensive components, designs that simplify component manufacture while complicating the assembly process, and designs that are simple and inexpensive to produce but difficult or expensive to service or support.


Design Quality and Social ResponsibilityProduct liability issuesEnvironmental issues

Design for Environment (DfE) - is the explicit consideration of environmental concerns during the design of products and processes, and includes such practices as designing for recyclability and disassembly.


Streamlining Product DevelopmentStreamlining Product Development

Competitive need for rapid product development

Concurrent (simultaneous) engineering - a process in which all major functions involved with bringing a product to market are continuously involved with the product development from conception through sales

Design reviews


Designing Processes for Quality1. 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 are the inputs and outputs for each step?

5. Mistake-proof the process: How can I eliminate or simplify tasks? What “poka-yoke” (i.e., mistake-proofing) devices (see Chapter 13) can I use?

6. Develop measurements and controls, and improvement goals: How do I evaluate the process? How can I improve further?


Service Process DesignThree basic components:

Physical facilities, processes and procedures

Employee behavior Employee professional judgment


Key Service DimensionsKey Service Dimensions

Customer contact and interaction

Labor intensity

Customization


Key Idea

Service process designers must concentrate on doing things right the first time, minimizing process complexities, and making the process immune to inadvertent human errors, particularly during customer interactions.


Projects as Value-Creation ProcessesProjects - temporary work structures

that start up, produce products or services, and then shut down.

Project management – all activities associated with planning, scheduling, and controlling projects


Key Idea

Successful project managers have four key skills: a bias toward task completion, technical and administrative credibility, interpersonal and political sensitivity, and leadership ability.


Project Life Cycle Management (1 of 2)

Project Quality Initiation: Define directions, priorities, limitations, and constraints.

Project Quality Planning: Create a blueprint for the scope of the project and resources needed to accomplish it.

Project Quality Assurance: Use appropriate, qualified processes to meet technical project design specifications.


Project Life Cycle Management (2 of 2)

Project Quality Control: Use appropriate communication and management tools to ensure that managerial performance, process improvements, and customer satisfaction is tracked.

Project Quality Closure: Evaluate customer satisfaction with project deliverables and assess success and failures that provide learning for future projects and referrals from satisfied customers.


Process ControlControl – the activity of ensuring

conformance to requirements and taking corrective action when necessary to correct problems and maintain stable performance


Key Idea

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 Any control system has three

components:1. a standard or goal,

2. a means of measuring accomplishment, and

3. comparison of actual results with the standard, along with feedback to form the basis for corrective action.


Key Idea

In manufacturing, control is usually applied to incoming materials, key processes, and final products and services.


Effective Control Systems 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.


After Action Review

1. What was supposed to happen?

2. What actually happened?

3. Why was there a difference?

4. What can we learn?


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

Improvement should be a proactive task of management and be viewed as an opportunity, not simply as a reaction to problems and competitive threats.


KaizenKaizen – 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.


FlexibilityFlexibility – the ability to adapt quickly

and effectively to changing requirements. rapid changeover from one product to

another, rapid response to changing demands, the ability to produce a wide range of

customized services.


Cycle Time

Cycle time – the time it takes to accomplish one cycle of a process

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.


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.


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.


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


Reengineering

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?


Process Management in the Baldrige Award Criteria

The Process Management Category examines the key aspects of an organization’s process management, including key product, service, and business processes for creating customer and organizational value and key support processes, encompassing all key processes and work units.

6.1 Value Creation Processes 6.2 Support Processes and Operational Planning

Documents

MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 1 Chapter 7 Process Management