CHAPTER 7

Process Management 2

CHAPTER 7PRIVATE

Process Management

Teaching NotesThis chapter investigates the concept of process and techniques used to design and manage processes. It emphasizes the fact that it is essential to design products and services to meet customer needs. An old, but good, video clip that could be shown with this chapter is the Tom Peters In Search of Excellence segment on 3M Corporation, a company that has a world class reputation for fostering design and innovation champions. The video might be considered dated, but it gives a unique insider look at the product development of CD technology, which was just in its infancy at the time that the film was made.

This chapter introduces the concepts of process design, control, and improvement, including the Japanese kaizen, or continuous improvement, philosophy. Students may have some difficulty in understanding how frequent, gradual changes as an approach to process improvement over the long term, can be successful in our "quick fix" society. What is a quick fix society? Its one that looks for instant answers and is reluctant to search for root causes, because we dont have time for that. Quick fixes for simple problems are not all bad. However quick fixes for complex problems with multiple causes and negative effects can often be costly and are generally ineffective. This chapter focuses on systematic and systemic improvements in processes.

Key objectives for this chapter should include:

To introduce the concept of process management, that involves planning and administering the activities necessary to achieve a high level of performance in value creation and support processes, including their design, control, and improvement. To review a number of leading process management practices related to value creation and support processes in closely coordinated, well structured, and highly effective product design and development systems.

To point out that projects are important value creation processes in many organizations and that project management involves all activities associated with planning, scheduling, and controlling projects. The lifecycle of a typical project includes initiation, planning, quality assurance, quality control, and closure. To focus students attention on process design that begins with the process owner (defined as those who are accountable for process performance and have the authority to manage and improve their process) and is focused on developing an efficient procedure to satisfy both internal and external customer requirements. To impress on students that as customer needs and expectations change, organizations must design processes that are increasingly agile. Agility is a term that is commonly used to characterize flexibility and short cycle times. Flexibility refers to the ability to adapt quickly and 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. In manufacturing, process design usually involves detailed technical analysis of product characteristics, such as technology capabilities, production sequences, ect., using tools such as flow-process charts, assembly charts, and work methods analysis, whereas, in pure service environments, processes are often designed around the five key service dimensions: reliability, assurance, tangibles, empathy, and responsiveness. To define Poka-yoke (POH-kah YOH-kay) as an approach for mistake-proofing processes using automatic devices or methods to avoid simple human error. It might consist of designing potential errors out of a process, identifying potential defects and stopping a process before the defect is produced, or finding defects that enter or leave a process. To learn that control is the activity of ensuring conformance to requirements and taking corrective action when necessary to correct problems and maintain stable performance. The three components of a control system: 1) a standard or goal, 2) a means of accomplishment, and 3) comparison of actual results with the standard to provide feedback for corrective action and how they are used in design as well as throughout a manufacturing or service process.

To emphasize that control is the foundation for organizational learning. Many organizations conduct an after-action review, or debriefing, that consists of understanding what was supposed to happen, what actually happened, why there might have been a difference, and what could be learned from the experience.

To encourage understanding and development of documented control procedures, which are usually written down in a process control plan, in order to provide 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. To explore the concept that process improvement should be viewed as an opportunity, not simply a reaction to problems. Kaizen, the Japanese philosophy of quality improvement, may be used in all areas of business to make small, frequent, and gradual improvements over the long term. A kaizen blitz, which is an intense and rapid improvement process in which a team or a department throws all its resources into an improvement project over a short time period, may sometimes be used, as opposed to traditional kaizen applications, which are performed on a part-time basis. To teach that cycle time is an important concept in process design, and 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 introduce a new product). 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. Other approaches to process design and improvement include: 1) Structured improvement methodologies typically consist of four steps: redefining and analyzing a problem, generating ideas, evaluating and selecting ideas, and implementing ideas. Common approaches are the Deming cycle (plan, do study, act), creative problem solving, Six Sigma DMAIC, TRIZ, and many others; 2) breakthrough improvement that refers to discontinuous change; 3) benchmarking - the search for innovative best practices in any industry, and includes several types of benchmarking; stretch goals, which force an organization to think in a radically different way and to encourage breakthrough improvement; and 4) reengineering, the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in performance. The Instructors Resource website has a number of Baldrige video clips which give an inside view of organizations that have received the Baldrige award. Some of those are especially appropriate for this chapter, having scenes that show how process and supply chain management can enhance an organizations quest for world-class quality.

ANSWERS TO QUALITY IN PRACTICE KEY ISSUESGold Star Chili, Inc.1.The Gold Star Chili, Inc.s organization chart is remarkably similar to Demings view of a production system in Chapter 1. In both, the suppliers appear on the left as inputs to the system. Materials and resources are consumed and/or transformed in the core process through receiving, manufacturing, warehousing, and shipping. Production, assembly, and inspection takes place as described in the narrative, even though some of those processes are hidden in the diagram. The three classes of customers: franchisees, retail/wholesale, and restaurant customers receive products and services, and consumer research is done for design/redesign of the product or service.

2. In a small, privately held organization, such as Gold Star, it is important for the organization to become a learning organization. That means that they must constantly examine their processes to determine whether their processes are effective and efficient. Obviously, the site selection and design process are very up-to-date, with site selection and computer-aided design software being used on a computer. Restaurant processes for restaurant operations are documented and taught through training sessions. Production processes in the Commissary are run with an eye toward consistent quality. Suppliers are selected on the basis of quality and price. Overall, the processes appear to be well thought-out.

A determination of how to constantly improve must be made based on use of data from each process, appropriate levels of cross-functional cooperation and teamwork, and dropping and adding products and services based on customer needs. It may be a good idea for Gold Star to benchmark both its top store operations and others to determine excellent practices and new ideas that can be incorporated. For example, they might want to benchmark a food processor or manufacturer to pick up new ideas for the commissary. Only by building in continuous change and improvement can the companys processes be used as a foundation for success in such a highly competitive environment.

Building Japanese Quality in North America1.The processes to support achievement of high product quality at Lexus Cambridge, Ontario, plant start with training workers on the importance of using their skills and knowledge to make a quality product. Skills are developed via cross-training on various jobs. Knowledge is used to invent new kaizens. In addition, systems support comes in the form of visible production status systems and production line status warnings that tell if the line has been stopped and help to keep production moving smoothly and efficiently. These have been designed in.

Control is achieved through policies, such as no watches, rings, or riveted pants on the production floor, empowerment of workers to stop the line for quality problems, making each worker a quality control inspector, and providing information for on-the-spot decision-making and correction through built-in quality gates as a part of the production system.

Improvement is fostered through the kaizen process. One likely invention was the Raku chair which a worker rides inside the body to install such interior parts as the headliner. New ideas are likely picked up from the shipping quality audits of random samples of cars that undergo more rigorous inspection before being shipped to customers.2. The lessons and practices that might be learned and applied to other companies, even outside the automotive industry include: Dont be stingy with worker training. Build visual systems to help workers and managers keep track of progress.

Empower workers to do a quality job.

Pay attention to small details that may affect quality (workers jewelry and clothing, small blemishes that may affect later processing, etc.)

Design, control, and improvement quality are all important parts of the quality system.

ANSWERS TO REVIEW QUESTIONS

1.There are two major categories of processes - value creation processes and support processes. Four major sub-processes of those categories are: 1) design processes, 2) production/delivery processes, 3) support processes, 4) supplier and partner processes.

Value creation processes (sometimes called core processes) are those important to running the business and maintaining or achieving a sustainable competitive advantage. 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 design, production/delivery, and other critical business processes. The ultimate value of the product, and hence, the perceived quality to the consumer, depends on both these types of processes. Support processes are those that are important to an organizations value creation processes, employees, and daily operations. They provide infrastructure for value creation processes but generally do not add value directly to the product or service. Their three key components are design, control and improvement of business processes. The importance of process management to businesses lies in its focus on prevention of defects and errors, and elimination of wasteful procedures, resulting in better quality and improved company performance through shorter cycle times and faster customer responsiveness. Supplier and partner processes are generally types of support process and describe how supplier and partner relationships are managed, for instance, how performance requirements are communicated and ensured, mutual assistance and training, etc.

A basic approach to designing value-creating or support processes might involve the one developed by Motorola, with steps of: 1) Identifying the product or service; 2) identifying the customer; 3) identifying the supplier; 4) identifying the process; 5) Mistake-proofing the process; and 6) developing measurements and controls, and improvement goals.

2.In many companies, value creation processes take the form of projects temporary work structures that start up, produce products or services, and then shut down. Some organizations are project-focused because of the nature of their work. They tend to deliver unique, one-of-a-kind products or services tailored to the specific needs of an individual customer. Others simply use projects as necessary to create processes for production and delivery of products or services. Project management involves all activities associated with planning, scheduling, and controlling projects. Good project management ensures that an organizations resources are used efficiently and effectively. Obviously this applies to Six Sigma projects as well as others. See further discussion of the Six Sigma process for projects in question 22, below. 3.Process management involves planning and administering the activities necessary to achieve a high level of performance in a process, identifying opportunities for improving quality and operational performance, and ultimately, customer satisfaction. Processes typically fall into two categories - value creation processes and support processes (see answer to question 1, above).

4.As customer needs and expectations change, organizations must design processes that are increasingly agile. Agility is a term that is commonly used to characterize flexibility and short cycle times. Flexibility refers to the ability to adapt quickly and 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. Flexibility might demand special strategies such as modular designs, sharing components, sharing manufacturing lines, and specialized training for employees. It also involves outsourcing decisions, agreements with key suppliers, and innovative partnering arrangements. Of course, it is also a requirement for a TQ culture in an organization.

Competitive pressures are forcing companies to reduce time to market, another characteristic of agility. The problems incurred in speeding up the process are well known. If done too hastily, the result will be the need to revise or scrap the design, cost increases or project over-runs, difficulty in manufacturing the product, early product failure in the field, customer dissatisfaction, and/or lawsuits due to product liability. One of them most significant impediments to rapid design is poor intra-organizational coordination. Reducing time to market can only be accomplished by process simplification, eliminating design changes, and improving product manufacturability. This requires involvement and cooperation of many functional groups to identify and solve design problems in order to reduce product development and introduction time.

5.The fundamental differences between manufacturing and service processes deserve special attention. This is especially important because support processes are basically services, so manufacturing firms invariably are also required to become involved in service delivery. First, the outputs of service processes are not as well defined as are manufactured products. Another way to think of this is that manufactured goods are tangible, service goods are (at least to some degree) intangible. 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 specific needs for service until after they have some point of reference or comparison.

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. Researchers have suggested that services have three basic components: physical facilities, processes, and procedures; employees behavior; and employees professional judgment. Designing a service essentially involves determining an effective balance of these components. The goal is to provide a service whose elements are internally consistent and directed at meeting the needs of a specific target market segment. Too much or too little emphasis on one component will lead to problems and poor customer perceptions. A useful approach to designing effective services is first to recognize that services differ in the degree of customer contact and interaction, the degree of labor intensity, and the degree of customization.

6.AT&T bases its methodology on the following principles:

Process quality improvement focuses on the end-to-end process.

The mind-set of quality is one of prevention and continuous improvement.

Everyone manages a process at some level and is simultaneously a customer and a supplier.

Customer needs drive process quality improvement.

Corrective action focuses on removing the root cause of the problem rather than on treating its symptoms.

Process simplification reduces opportunities for errors and rework.

Process quality improvement results from a disciplined and structured application of the quality management principles.7.Processes controllable by their owners have three requirements: 1) the owner has to have a means of knowing what is expected of him or her through clear instructions and specifications; 2) he/she must have a means of determining their actual performance via inspection or measurement; 3) they must have a means of making corrections if they discover a variance between what is required (specification) and their actual performance. The implications of owner-controllable requirements are that management must provide (generally with owner assistance) the necessary instructions and specifications, the tools and assistance needed to set up a measurement system, and the training and empowerment to allow operator-owners to take corrective action when there is an error or defective process in operation.

8.Processes need to be repeatable (the process must recur over time) so that enough data can be gathered to show useful information. They must also be measurable so that patterns about the process performance can be made clear. This ability to "predict" performance then leads to ability to detect out-of-control conditions and helps in the search for improvements. Meeting these two conditions ensures that sufficient data can be collected to reveal useful information for evaluation and learning that lead to improvement and maturity.

9. People make inadvertent mistakes for a number of reasons, including the following:

Forgetfulness due to lack of concentration

Misunderstanding because of the lack of familiarity with a process or procedures

Poor identification associated with lack of proper attention

Lack of experience

Absentmindedness

Delays in judgment when a process is automated

Equipment malfunctions

Poka-yoke can help to prevent such errors because it is focused on two aspects: (1) prediction, or recognizing that a defect is about to occur and providing a warning, and (2) detection, or recognizing that a defect has occurred and stopping the process.10. Service poka-yokes are designed to prevent two major classes of errors: server errors and customer errors. Server errors result from the task, treatment, or tangibles of the service. Customer errors occur during preparation, the service encounter, or during resolution.11.The three components of any control system are a standard or goal, a means of measurement of accomplishment, and a way to compare actual results with the standard, along with an appropriate method of feedback of results to form the basis for corrective action.

12.An after action review consists of asking four basic questions:

1. What was supposed to happen?

2. What actually happened?

3. Why was there a difference?

4. What can we learn?

Thus, rather than simply correcting unacceptable events, the focus is on preventing them from occurring again in the future.

13.Prior to the development of the TQ approach, most U.S. managers simply maintained processes until replaced by new technology. Japanese managers generally focused on continually improving products and processes through a process called kaizen. Often in the West, quality improvement (sometimes mistakenly called kaizen by those who dont really understand its philosophy) is viewed as simply making improvements in product quality. In the kaizen philosophy, improvement should take place in all areas of business--cost, meeting delivery schedules, employee safety and skill development, supplier relations, new product development, or productivity-- in order to enhance the quality of the firm. Thus, any activity directed toward improvement falls under the kaizen umbrella. Activities to establish traditional quality control systems, install robotics and advanced technology, institute employee suggestion systems, maintain equipment, and implement just-in-time production systems all lead to improvement. In contrast to seeking improvement through radical technological change, kaizen focuses on small, gradual, and frequent improvements over the long term. Financial investment is minimal. Everyone participates in the process; many improvements result from the know-how and experience of workers. Actually, continuous improvement approaches were developed decades earlier in the U.S. under a number of labels. Work simplification, a program developed by Allan Mogensen, was designed to train workers in the simple steps necessary to analyze and challenge the work they are doing, and thus make improvements when necessary. It has been used for a number of years in such organizations as Texas Instruments and Maytag. Planned methods change, created by Proctor & Gamble, seeks not only to improve processes, but also to replace or eliminate unnecessary operations. This approach relies on forming teams of employees to study the operations, establish dollar goals as to how much of their cost they would try to eliminate through planned change, and provide positive recognition for success.

14.Cycle time refers to the time it takes to accomplish one cycle of a process-- for instance, the time a customer orders a product to the time that it is delivered, or the time to introduce a new product. 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 processes to eliminate non-value-added steps such as rework. This forces improvements in quality by reducing the potential for mistakes and errors as well as reducing costs. Thus, cycle time reductions often drive simultaneous improvements in organization, quality, cost, and productivity.15.The Deming cycle is a simple, straightforward improvement process, consisting of four steps: plan, do study, and act. The plan stage consists of studying the current situation and describing the process: its inputs, outputs, customers, and suppliers; understanding customer expectations; gathering data; identifying problems; testing theories of causes; and developing solutions and action plans. In the do stage, the plan is implemented on a trial basis, for example, in a laboratory, pilot production process, or with a small group of customers, to evaluate a proposed solution and provide objective data. Data from the experiment are collected and documented. The study stage determines whether the trial plan is working correctly by evaluating the results, recording the learning, and determining whether any further issues or opportunities need be addressed. Often, the first solution must be modified or scrapped. New solutions are proposed and evaluated by returning to the do stage. In the last stage, act, the improvements become standardized and the final plan is implemented as a current best practice and communicated throughout the organization. This process then leads back to the plan stage for identification of other improvement opportunities.

The Deming cycle focuses on both short-term continuous improvement and long-term organizational learning.16.Often, creative ideas come at moments of inspiration, but systematic approaches can refine thinking and help prepare for those moments. An effective problem-solving process that can easily be adapted to quality improvement stems from creative problem-solving (CPS) concepts pioneered by Osborn and refined by Parnes. This strategy consists of the following steps:

Understanding the mess

Finding facts

Identifying specific problems

Generating ideas

Developing solutions

Implementing solutions

17. Stretch goals, also called breakthrough objectives, are urgent, short-term goals for improving products or services which force a company to think radically, different, to encourage major improvements and well as incremental ones. Such goals apply to all areas of a company.

18. Benchmarking is measuring an organizations process performance against that of best-in-class organizations, no matter what the industry, determining how they achieve their performance levels, and using the information to improve on the organizations own targets, strategies, and implementation. Benefits include:

* The best practices from any industry may be creatively incorporated into a company's operations.

* Benchmarking is motivating. It provides targets that have been achieved by others. Resistance to change may be lessened if ideas for improvement come from other industries.

* Technical breakthroughs from other industries that may be useful can be identified early.

Benchmarking broadens peoples' experience base and increases knowledge. To be effective, it must be applied to all facets of a business.

However, mere competitive comparison is not adequate for benchmarking purposes, since a company may be so competitive that they find that they have a slight edge in various practices and are the industry leader. Thus, by concentrating only on competitors, it may not learn about ideas and practices from outside the industry that allow it to surpass the best within its industry and achieve truly distinctive superiority.

19.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. Reengineering's incremental improvement and breakthrough improvement are not incompatible, but rather are complementary approaches that fall under the TQ umbrella; both are necessary to remain competitive. It has been suggested that TQ support is needed for successful reengineering. Reengineering alone is often driven by upper management without the full support or understanding of the rest of the organization, and radical innovations may end up as failures. The TQ philosophy encourages participation and systematic study, measurement and verification of results that support reengineering efforts.20.Strong supplier relationships are based on recognizing the strategic importance of suppliers in accomplishing business objectives, developing win-win relationships through partnerships, and establishing trust through openness and honesty. Supplier certification systems are often used to manage supplier relationships (see next answer for details).

21.The purpose for supplier certification programs is to rate and certify suppliers who provide quality materials in a cost effective and timely manner to their customers. Specific criteria for suppliers generally include:

Certified suppliers experience virtually no product-related lot rejections for a significant time period, usually for 12 months, or in some cases two years.

Certified suppliers have no nonproduct-related rejections for a stated period of time. "Nonproduct-related" means mismarkings on a container, for example.

Certified suppliers precipitate no production-related negative incidents for a stated period of time, usually six months.

Certified suppliers successfully pass on-site quality system evaluation (audit), conducted within the past year.

Certified suppliers operate according to an agreed-on specification. Documentation should not contain ambiguous phrases such as "free of flash" or "no characteristic odor.

Certified suppliers have a fully documented process and quality system, which should include the use of statistical process control and a program for continuous improvement.

Certified suppliers furnish timely copies of certificates of analysis, inspection data, and test results.

Details of supplier certification processes vary by company, and such programs are time-consuming and expensive to administer, but are generally cost effective, in the long run.22.Six Sigma projects generally cut across organizational boundaries and require the coordination of many different departments and functions. Like all other projects, they require good project management to ensure that the organizations resources are used efficiently and effectively. Two of the advantages of Six Sigma are that projects are clearly linked to strategic needs and organizational objectives, and that projects are managed under a common framework. This linkage enables projects to be timely and relevant, and ensures that controls are put in place to leverage the improvements that are identified. The Six Sigma team-project approach provides a natural fit with the requirements of product and process design, control, and improvement. A good system for process management is a prerequisite to Six Sigma. Obviously, to effectively design or improve a process you first need to understand it. The Six Sigma DMAIC process is a systematic approach to improvement that involves Defining, Measurement, Analysis, Improvement, and Control steps in the process. This process goes beyond action planning steps to process improvement and a plan for improving, and then holding the gains, through a control process (steps I and C).23.Category 6 of the 2003 Malcolm Baldrige NQA criteria assesses the key aspects of process management. It examines how an organization identifies and manages its key processes for creating customer value and achieving business success and growth. This includes how an organization incorporates customer and supplier input into determining its key process requirements; how processes are designed to meet these requirements; and how new technology, organizational learning, cycle time, productivity, cost control, and other efficiency and effectiveness factors are designed into processes. This criteria item also seeks to understand how key performance measures and indicators are used for controlling and improving processes, how costs associated with inspections, tests, and audits are minimized, and how defects and rework are prevented. Finally, it calls for information on how value creation processes are improved to achieve better performance, reduce variability, improve products and services, keep processes current with business needs and directions, and how improvements are shared with other organizational units. Item 6.2, Support Processes, calls for similar information about key support processes, particularly on how they are design to meet appropriate internal and external customer requirements, and how they are controlled and improved.

ISO 9000:2000 deals with process management activities (in fact, the entire standards are focused on an organizations ability to understand, define, and document its processes.) For example, one of the requirements is that organizations plan and control the design and development of products and manage the interfaces between different groups involved in design and development to ensure effective communication and clear assignment of responsibility. The standards also address the management of inputs and outputs for design and development activities, and use of systematic reviews to evaluate the ability to meet requirements, identify any problems, and propose necessary actions; purchasing processes; control of production and service, including measurement and process validation; control of monitoring and measuring devices used to evaluate conformity; analysis and improvement; monitoring and measurement of quality management processes; and continual improvement, including preventive and corrective action. The standard requires that an organization use its quality policy, objectives, audit results, data analysis, corrective and preventive actions, and management reviews to continually improve its quality management systems effectiveness.

Six Sigma is based on understanding and improving processes on a project-by-project basis. Two of the advantages of Six Sigma are that projects are clearly linked to strategic needs and organizational objectives, and that projects are managed under a common framework. The Six Sigma team-project approach provides a natural fit with the requirements of product and process design, control, and improvement. A good system for process management is a prerequisite to Six Sigma. Obviously, to effectively design or improve a process you first need to understand it. If an organization does not have an ongoing system of process management, it will be quite difficult to implement Six Sigma. Some key processes that are necessary to implement Six Sigma include the following:Project selection and definition

Financial review

Training

Leadership for project leaders

Project leader mentoring

Certification for Six Sigma specialists

Project tracking and reporting

Information management and dissemination

It is important to note that Six Sigma is not a substitute for continuous improvement. Because of its reliance on specialists the black belts who lead the high-profile projects, it becomes quite easy to ignore simple improvements that can be achieved at the process owner level. In fact, it can easily alienate process owners who, instead of seeking continuous improvements, leave them to the specialists.

ANSWERS TO DISCUSSION QUESTIONS1.Godfrey painfully, but effectively, points out the blinds spots of process management that many organizations have. The three issues of overscheduling, lack of effective capacity planning, and unwillingness of departments to work together create costly delays, waste, lost time, and hard feelings. Overscheduling can occur in such situations as putting tickets on sale at a single location for sporting events, such as the World Series, or the Super Bowl; lack of capacity planning can take place when there are insufficient doses of a flu vaccine available during the flu season; and unwillingness of departments to work together is frequently seen when local governments refuse to work together to develop an integrated system of permits for building construction projects. 2. Key business processes for sales and marketing could include the process for identifying and selling products/services to customers and another one for order handling and processing for repeat sales; supply chain management requires processes for ordering routine and special materials and supplies; information technology management requires processes to develop computer systems and programs and other processes to handle routine, repetitive processing jobs, such as payrolls; and HRM requires processes for recruiting, hiring, orienting new hires, performance review, and employee separation, among others. See below for a more extensive view.

Understanding Markets and Customers (UMC)Developing Visionand Strategy (DVS)Selling andCustomer Service(SCS)Acquiring Materialsand Supplies (AMS)ManagingInformationTechnology (MIT)

Determiningcustomers' needs and wantsMonitoring theexternal environmentResponding tocustomer inquiriesEvaluating andselecting suppliersPlanning forinformation systemsand technology

Monitoring changes in market or customer expectations Defining the business concept and organizational strategyTaking and processing ordersPurchasing materials and suppliesDeveloping and deploying enterprise support systems

Marketing products Designing the productsor services for relevant organization customerstructure segmentsDefining the organizationstructureProviding after-salesserviceAcquiring and deploying appropriate technologyImplementing systems, security and controls

Providing technical support relevant to customer marketsDeveloping andsetting organizationalgoalsReconciling orderexceptionsManaging supplierrelationshipsSupportinginformation systemsand technology

Identifying andsecuring newsuppliersImproving customerprocessesManaging inventoryFacilitatinginformation sharingand storage retrieval

Negotiating andmonitoring supplierparticipationManaging customersegmentationProviding internalcustomer servicesManaginginformation andstorage retrieval

Measuring customersatisfactionManaging facilities,network, operatingsystems andtechnology

ManagingMovement of Inventories andMaking Deliveries (MId)Managing IntegratedSupply (MIS)Developing andManaging HumanResources (DHR)Managing Financialand PhysicalResources (MFR)Managing QualityImprovement andChange (MIC)

Receiving/Stocking Marketing and salesManagingdeployment ofpersonnelManaging financialresourcesDeveloping anddeploying theQuality Plan

Controlling inventoryAcquiring materialsand suppliesInterpretingpersonnel policiesProcessing financeand accountingtransactionsMeasuringorganizationperformance

Picking material Managing customerinventoriesEnsuring associatewell-being andsatisfactionReporting financialinformationBenchmarkingperformance

Shipping, delivery and pickupFulfilling customerrequisitionsManaging worker'scompensation claimsManaging the taxfunctionImproving processesand systems

Acquiring MIDmaterials and processessupplies Improving customerprocessesProviding requiredbasic safety trainingfor all associatesImplementing TQM

Managing facilities and equipmentImplementing improvementsDeveloping and Maintaining a humanresource informationsystemMaintaining 1S0 9000 registration and conducting qualityassessments

Complying with allgovernmentreportingTraining

3. Processes should be repeatable (the process must recur over time) so that enough data can be gathered to show useful information. They must also be measurable so that patterns about the process performance can be made clear. This ability to "predict" performance then leads to ability to detect out-of-control conditions and helps in the search for improvements. An example of the types of processes that are repeatable and measurable might include the time required to register for a class using a telephone or internet-enabled process. An example of a non-repeatable, non-measurable process would be painting a picture of a landscape. Other examples will vary according to student understanding and interests.

4. Some processes that students perform are often included on Personal TQM projects (see Chapter 1). These might include going to the gym three times per week for exercise, studying at least 2 hours per day, five days a week, etc. These are repeatable and measurable, and they may be improved upon by using a PTQM checklist to record whether they have been accomplished or not. The answers will vary here, depending on students' perspectives.

5. Typically, examinations are a means of control (or appraisal, in quality cost terms). They could be used as a means for gathering data to discover areas for improvement. An advantage of the "English system" of examinations is that classroom examinations are separated from comprehensive examinations. Classroom examinations (if they are given) are developmental, and have no direct bearing on class rank or the comprehensive exam "grade." Individual professors do not prepare the comprehensive examinations. Therefore, professors are seen more as "tutors," "lecturers," or "mentors" in the classroom setting as opposed to "quality control" police.

6.Companies today face incredible pressures to continually improve the quality of their products while simultaneously reducing costs, to meet ever-increasing legal and environmental requirements, and to shorten product life cycles to meet changing consumer needs and remain competitive. The ability to achieve these goals depends on a large extent on product design. The complexity of todays products makes design a difficult activity; a single state-of-the-art integrated circuit may contain millions of transistors and involve hundreds of manufacturing steps. Nevertheless, improved designs not only reduce costs, but also increase quality.

7.As indicated in the answer to Review Question 13, above, the kaizen philosophy, improvement in all areas of business enhance the quality of the firm. Thus, any activity directed toward improvement falls under the kaizen umbrella. Applying this concept to the classroom would mean that students would search for improvement opportunities in every area, from study skills to improving the quality and readability of their written reports, as well as the professor's handouts.

8.Other excuses for not wanting to engage in improvement include: Weve tried that before and it didnt work; Im not paid to improve the process its not my job; We never do it that way twice, so it cant be improved; The boss wont let us change it; Government regulations prohibit that from being changed (maybe they do, but no one has ever looked up the regulation!)

9.One of the authors was actually involved in this type of process at both the program level and the course level. At that time, prior to the growing popularity of Six Sigma, he attempted with some success, to use TQ principles and tools in the course design process. The process should begin with problem definition and development of a list of customer needs and expectations (CTQ issues) as well as team formation in the Define stage, move on to Measurement of what is currently done and required metrics, Analysis to determine where improvements might be made, investigation of possible Improvements and whether they solve the perceived problem, and ending with Control of the new process so that what the customer sees and believes the quality of the product to be (perceived quality) will be continually delivered.

10.The first task of the producer (university administrators and faculty) is to identify customer needs and expectations. The university must focus on the key dimensions that are reflected in specific customer needs. If these expectations are not identified correctly or are misinterpreted, then the final product will not be perceived to be of high quality by customers. A university has two primary customers (and many other customer groups). The primary customers are the students and the employers of graduates.

Technical requirements determine the design quality of the product. Process (or course) designers' perceptions of customers' needs can often differ from their actual needs. For instance, the "average" customer might need course content that is general enough for use in any organization. A "design" decision might be made in a computer course to teach AUTOCAD, rather than a common spreadsheet program. If the intent is to prepare business (not engineering) students to work in business organizations, then the "product (student who graduates)" may be said to "fail prematurely" under normal use. If course designers never have an opportunity to interact with customers (employers), the probability that they will not understand or misinterpret the expected quality is greatly increased.

Next, product designs are transferred to people or organizational units responsible for delivering the service. Poor attention to customer needs can affect the perceived quality. For example, if the system is not designed to assure conformance to the technical specifications, then the actual quality produced may not be the same as the design quality. The fundamental equation that relates these different levels of quality is: perceived quality = actual quality - expected quality.

11.Researchers have suggested that services have three basic components: physical facilities, processes, and procedures; employees behavior; and employees professional judgment. Designing a service essentially involves determining an effective balance of these components. The goal is to provide a service whose elements are internally consistent and directed at meeting the needs of a specific target market segment. Too much or too little emphasis on one component will lead to problems and poor customer perceptions. For example, too much emphasis on procedures might result in timely and efficient service, but might also suggest insensitivity and apathy toward the customer. Too much emphasis on behavior might provide a friendly and personable environment at the expense of slow, inconsistent, or chaotic service. Too much emphasis on professional judgment might lead to good solutions to customer problems but also to slow, inconsistent, or insensitive service.

A useful approach to designing effective services is first to recognize that services differ in the degree of customer contact and interaction, the degree of labor intensity, and the degree of customization. For example, a railroad is low in all three dimensions. On the other hand, an interior design service would be high in all three dimensions. A fast-food restaurant would be high in customer contact and labor intensity, but low in customization.

Services that are low in all three dimensions of this classification are more similar to manufacturing organizations. The emphasis on quality should be focused on the physical facilities and procedures; behavior and professional judgment are relatively unimportant. As contact and interaction between the customer and the service system increases, two factors must be taken into account. In services low in labor intensity, the customers impression of physical facilities, processes, and procedures is important. Service organizations must exercise special care in choosing and maintaining reliable and easy-to-use equipment. With higher levels of contact and interaction, appropriate staff behavior becomes increasingly important.

As labor intensity increases, variations between individuals become more important; however, the elements of personal behavior and professional judgment will remain relatively unimportant as long as the degrees of customization and contact and interaction remain low. As customization increases, professional judgment becomes a bigger factor in the customers perception of service quality. In services that are high in all three dimensions, facilities, behavior, and professional judgment must be equally balanced.

12.Traditionally, there have been high "walls" built between design engineers and manufacturing engineers. In fact, in many companies, there is a saying that Design develops the product requirements and "throws the new design over the wall" for Manufacturing to make. The implication is that neither side has wanted to talk to, or cooperate with, the other. Quality assurance personnel may be able to "bridge the gap" or "tear down the walls" between these groups by focusing on the needs of the organization to design a product with the customer in mind, where the customer can be seen as the immediate group (Manufacturing) by the design engineers, as well as the ultimate customers or consumers of the finished product.

13.a. Legal Sea Foods designs their process to include major steps of: 1) Supplier specifications (fresh, local products from government certified beds) carefully monitored. 2) Closely controlled initial processing (cutting and filleting in an environmentally controlled facility with an in-house microbiology laboratory) that assures high quality raw materials. 3) Acceptance and in-process inspections (total of eight) that are consistently performed. 4) Customer-focused order taking and processing (cooked to order and delivered individually) using teamwork to assure freshness at the customers' tables. The three components of any control system are a standard or goal, a means of measurement of accomplishment, and a way to compare actual results with the standard, along with an appropriate method of feedback of results to form the basis for corrective action. Legal Sea Foods process seems to be designed to ensure control.

b. In terms of a 3-dimensional classification of: customer contact/interaction, labor intensity, and customization, Legal Sea Foods would probably rank moderately high in customer contact/interaction (not as high as a fine restaurant), moderately high in labor intensity (teamwork required to serve the meal), and medium on customization. It would certainly not be the same as fast food services or of fine restaurants. Their process design appears to be consistent.

14.The Circle H "case" problem is designed to give students a "feel" for the types of challenges that are faced by quality auditors, who must act as "detectives" to determine what problem exists before they can recommend how it is to be fixed. In this case, there are many questions raised by the data from the customer survey. The main question in this case is "how to define the problem." answers to associated questions are:

A number of questions about the problem must be raised, and appropriate data must be gathered inside and outside the company, before the solution can be found. Among these are:

How many people were included in the survey at the three former customer's companies, from which the survey data was compiled? What were their titles and what specifically did they say about the three top complaint categories?

If detailed information on complaint categories is available from the customers, what data can they provide on the way in which the packaging was inconvenient (wrong sizes, way the order was packed and shipped from the plant, etc.)? What data is available on delivery and restocking time? Has this changed recently, or was it always "too slow"? What information can be provided about the lack of availability of preferred items? Was their customer representative aware that this was a problem? What was done to communicate and handle the problems?

What internal company information is available from the shipping department on the way the product is packed before sending the product to the customer? Have customer preferences in packaging been communicated to shipping?

What information is available from the ordering and production control departments on the former customers' preferences for certain products versus production scheduling and run sizes? Are these products running into capacity bottlenecks, constantly sold out, or delayed during production due to chronic production problems?

The same type of questions used above could be extended to the investigation of whether the credit approval process significantly affected the order processing time. Specifically, you would need to know when the customers became aware of the fact that delivery and restocking were "too slow." Then the following line of investigation should be taken in the company, by asking:

What information is available from all affected departments on the complete process used to enter and process orders, up to and including the new delay for credit checking of restock orders, and how are controls set up to ensure that the orders are shipped in a timely and complete fashion?

Were any of the former customers involved in the delinquent accounts receivable category? Was there a way to avoid having every restock order to be scrutinized by the credit department, such as having a code on the order for "good" customers and a separate code for "delinquent" customers?

If there are problems in order processing and accounts receivable, as there appear to be, the next step is to analyze their processes, determine what controls are in place, find out why the controls aren't giving satisfactory results, and organize a team composed of representatives from both departments to take quick corrective action.

15.This expensive experiment of McDonalds may have violated many of the rules of process design and/or improvement. It can only be speculated what went wrong without more facts. Even a basic understanding of Demings PDCA model would have provided some protection against this type of problem, if it had been done systematically. It is unclear what kinds of market testing were done, but it is not likely that they did an extensive full-scale test of the concept in the field for very long. Chances are they did 4.5 years of testing in the lab and 0.5 year in an actual outlet. Did the plan for the process change include workers, store managers, and a cross section of customers? Did the do step calculate possible risk factors and include simulations? Did the study step allow for adequate time to analyze the data from the tests? Did the act phase obtain feedback before the entire changeover was made?

16.The billing and service information system at Cincinnati Water Works appears to be extremely sophisticated and comprehensive for a utility, such as a water department. The technology that they designed has removed many of the most obvious hassles and delays for customers, while providing the opportunity for extensive productivity improvement for the department. It appears that the system would contribute to quality, time, and productivity improvements, simultaneously. It has individualized account history for customer satisfaction and cycle time reduction; trouble-shooting and repair capability, including locators and GPS, for quality and productivity improvement; personpower scheduling capacity for both call center representatives and maintenance personnel which also improves quality, cycle time and productivity; productivity enhancement for meter readers and repair people; and its primary function, billing customers and handling account queries. This type of system might be used by almost any type of utility, but could possibly be adapted to transportation systems such as airlines, freight handlers, and passenger transportation organizations.

17.Below is a diagram that represents a complete process:

18.The PepsiCo flowchart explicitly contains three of the elements of Demings plan-do-study-act cycle (Deming cycle). Planning involves a customer focus, analysis of the current steps in the process, and proposing an improved process, with process measures. Doing involves pilot testing the new process, implementing stabilizing it, and continuously improving it (repeating the cycle). After the pilot test, it is assumed that one would study the results for flaws or necessary corrections before full implementation takes place. This is not stated explicitly. In contrast with the Deming cycle, there is a definite customer focus that is a unique part of the planning process.

PepsiCos process has several features that are similar to the Juran improvement program, as well. The process flowchart seems to emphasize the steps in the diagnostic journey, the remedial journey, and holding the gains that Juran developed.

19.Defects to consider might include:

Metropolitan Bus Service Lack of available buses to cover all routes

Lack of available drivers to cover all routes

Lack of maintenance personnel to service buses.

Unsafe or defective transmissions on buses

Lack of customer accommodations (i.e. bike racks, priority seating for elderly) on buses.

Lack of handicapped facilities (i.e. wheelchair loading ramps) on buses.

Lack of routes available for rural areas outside the metropolitan area

Poorly developed time schedules for buses that do not take local driving conditions (i.e. traffic congestion, weather) into account.

Defective equipment on buses (i.e. speaker systems that are too loud or too soft for passenger comfort.)

Customer service issues (i.e. bus drivers who are surly; tour guide drivers who feel obliged to keep up a running dialogue instead of concentrating on driving the bus, etc.)

A Local Department Store Lack of advertisement for store products and events (sales, etc.)

Lack of customer service and store personnel to handle store sales volume.

Poorly developed layout of store, which causes confusion among customers.

Lack of customer accommodation (i.e. available parking, shopping bags or carts, handicapped facilities.)

Customer service issues (i.e. sales personnel who are surly, sales personnel who are TOO friendly, sales personnel who ask you Are you finding everything okay? soon after you walk up to the counter, etc.)

An Electric Power Company Lack of adequate power sources to cover peak demand

Lack of sufficient maintenance crews to handle emergencies (i.e. blackouts, etc.)

Consistently defective billing services

Customer service issues (i.e. lack of people to handle the customer service call center; customer service personnel who are not trained to properly answer the phone or deal adequately with customer problems, etc.)

A theme or amusement park, such as Walt Disney World, Kings Island, or Six Flags. Defective or unsafe rides and attractions.

Lack of maintenance personnel to service rides and attractions.

Lack of customer accommodations (i.e. sufficient parking, first aid services, handicapped services, etc.)

Lack of sufficient personnel to handle admission booths, rides, food services, etc.

Crowd-control issues (i.e. long lines for rides, attractions, restrooms, etc.)

Customer service issues (i.e. customer service personnel who are not trained to properly answer general questions or deal adequately with customer problems.)

Your college or university Lack of sufficient student accommodations (i.e. dormitory rooms, parking) on campus.

Poorly developed course registration systems.

Lack of student employment opportunities

Lack of public facilities (i.e. public parking spaces, trash cans, etc.) on campus

Lack of school supplies or books for courses, at the campus bookstore.

20.The Siemens Energy and Automation and Lucas Sumitomo Brakes, Inc. case studies reveal two similar situations in which the Deming cycle and creative problem-solving process resulted in significant process improvements and savings.

1a) The Deming cycle (plan-do-study-act) required the Siemens team to go through the cycle twice. First, they planned to simply try to reduce the negative appearance of the E-Frame breaker. Although details werent given, they began gathering data on the problem, found after a brief study that they could possibly eliminate the operation, and acted on that information to redefine the problem and begin the cycle again. They then planned to gather data, gathered it and determined costs and customer requirements, studied the operation using a fishbone analysis, extended the study to consider alternatives, and implemented their recommendation, with follow-up (action step).

1b) A broader picture using the 6-step creative problem-solving process consists of:

1. Understand the mess

2. Find facts

3. Identify specific problems

4. Generate ideas.

5. Develop solutions

6. Implement the best solution

Obviously, the Siemens team took time to understand the mess. This resulted in a problem re-definition that saved both time and considerable costs. In Step 5, the time spent to determine the five possible alternative solutions [ a) constant airflow; b) shop vacuum; c) deflashing parts; e) ionizer (mousetrap); and e) air hose at press] was probably time well spent. The best solution was determined to be e). It was implemented and data on its usefulness was gathered before the old process was dismantled.

2a) The Deming cycle (plan-do-study-act) required the Lucas-Sumitomo team to look at the big picture of factory downtime. They too had to plan and do data gathering, study data to narrow their focus, and act to focus on reducing downtime on the high-pressure washing machines. They began the next cycle with a better view of the major part of the focus.

It is easy to see that the Lucas-Sumitomo team had a big mess in looking at the complex problem of reducing downtime, so they needed to focus on a significant segment of that. This was seen in setting a goal to reduce downtime on the washers by 40% in the short term and 70% in the long term. Steps 2 and 3 of the creative problem solving process took extensive data gathering and fact-finding in order to identify specific problems. Techniques that were used included brainstorming, fishbone (cause-effect) diagrams, and use of the 5 Whys to get to root causes. Ideas were generated, potential solutions for multiple problems were listed and tested, and implementation was done, with follow-up. The changes required included a) relocating switches and wires on the machines, b) changing materials and specifications of o-rings, seals, and tubing, and implementing a preventive maintenance program to rebuild rotary joints during scheduled downtime. The results were that downtime was decreased more than the targeted amount in the short run. It continues to be increased over time.

21.These are not easy problems for libraries to solve. The following are only top of the head suggestions. They have not been reviewed by librarians.

a. Some low tech approaches might include sorting books on carts according to the sections where they must be returned to, providing a checklist to shelvers to remind them of steps needed to ensure proper placement, and/or providing marking on shelves (numbers or color codes) to match similar codes on the books. Of course, a more high tech solution might be to barcode the books and have matching barcodes on the shelves.

b. Check ins should be easier to mistake proof than shelving accuracy. Some solutions would be to have a check in bin located close to the checkout station, have library clerks check in the books, just in time, as they are submitted, and place the books on carts to be reshelved as soon as possible. Again, automation through barcodes would help to ensure process speed and accuracy.

22.For the Hensley automobile dealership problem, a comprehensive analysis is required. Chase and Stewart point out that ...poke-yokes are either warnings that signal the existence of a problem or controls that stop production until the problem is resolved. The authors provide an interesting classification of the type of poke-yokes that are relevant in services. These are included here, with an example, rather than trying to provide an exhaustive list of those for Rick Hensleys automobile dealerships service. However see the Figure 7.11, and the Sloan Management Review article for a more detailed listing of process steps and examples.

Classification of Errors

Poka Yoke Fix Examples

Task

Color-coded tags on vehicle roof to identify service order / advisor

TreatmentSmile, greeting with, Hello, Ms. Smith. Welcome to Hensley.

Tangible Clean uniforms; waiting areas clean, with rugs, fresh coffee

PreparationAppointment reminder calls; customer to bring warranty paperwork

EncounterStaple correct (legible) copy (not companys copy) of credit card

receipt to customers bill

ResolutionCustomer satisfaction card given to customer when keys returned

23.As can be seen on the flowchart, below, the medication administration process offers numerous possibilities for error at every step. The physician may not write legibly (probably the most frequent source of physician error), or even specify the wrong drug or dosage. The secretary may not transcribe the order correctly. The reviewing nurse may approve an order that is not correct. The pharmacist may not read or interpret the prescription correctly, or may mix up orders. And the attending nurse may give the wrong medication, or the wrong amount, to the patient.

A Medication Error Committee at one hospital identified the highest ranked problems that were deemed to be the most critical in causing severe errors as follows:

Having lethal drugs available on floor stocks.

Mistakes in math when calculating doses.

Doses or flow rates calculated incorrectly.

Not checking armbands (patient identity) before drug administration.

Excessive drugs in nursing floor stock.

To reduce possible critical errors at the point of medication, these poka-yokes could be applied:

Remove lethal and excessive drugs from floor stock.

Standardize infusion rates and develop an infusion handbook

Educate nurses to double-check rates, protocols, and doses

24. The flowchart for this process is as follows:

Possible sources of error include customer error, teller error, or processing error. Some Poke-Yokes are:

Check addition and subtraction with calculator, regardless of cash back, or not

Check cash-out ticket to verify correct account number and amount

Count checks and cash twice to ensure that the tally is correct

Train new employees, using a flowchart

Have new employees work with veteran employees for a specified period to learn operations well and prevent processing errorsSUGGESTIONS FOR PROJECTS, ETC.

1. Processes that students might encounter at their college or university due to direct contact or part-time work on campus might include accounting, budgeting, purchasing, training and development, and research. Non-educational institutions that might be benchmarked might be hospitals (accounting); relief agencies, such as the Red Cross (budgeting); discount stores (purchasing); consulting firms (training and development); and pharmaceutical firms (research and development).

2. This exercise is designed to further students' awareness of the breadth of the "quality movement" and help them confirm how and whether the theory of quality is being applied in a practical settings in business and industry. Process design concepts are fairly widely known among trained quality managers, but it varies widely depending on the size of the firm and the industry.

3. Design for environment is becoming more important in US firms, as well as abroad. Many European firms are certified under ISO 14000 and more and more US firms are being certified, each year. This will be an interesting exercise to take the pulse of socially responsible managers in local industries.

4.For Christina Clark to mistake-proof these steps in each process, will require the application of poke-yoke principles. For example, the Receiving and Storage steps could be mistake-proofed by putting a clipboard on the refrigerator door as a reminder of the requirement to check the temperature of incoming hotdogs and the temperature of the refrigerator. Columns on the form would require signoff on the two temperatures, the date and time, and the name of the associate checking in the product. Similar sign-offs could be required for the other processes of cooking, cooked storage and re-heating. In addition, other HACCP requirements (see Bonus Materials for a review of these requirements) would have to be met. HACCP involves these seven principles:

Analyze hazards. Potential hazards associated with a food and measures to control those hazards are identified. The hazard could be biological, such as a microbe; chemical, such as a toxin; or physical, such as ground glass or metal fragments.

Identify critical control points. These are points in a food's production--from its raw state through processing and shipping to consumption by the consumer--at which the potential hazard can be controlled or eliminated. Examples are cooking, cooling, packaging, and metal detection.

Establish preventive measures with critical limits for each control point. For a cooked food, for example, this might include setting the minimum cooking temperature and time required to ensure the elimination of any harmful microbes.

Establish procedures to monitor the critical control points. Such procedures might include determining how and by whom cooking time and temperature should be monitored.

Establish corrective actions to be taken when monitoring shows that a critical limit has not been met--for example, reprocessing or disposing of food if the minimum cooking temperature is not met.

Establish procedures to verify that the system is working properly--for example, testing time-and-temperature recording devices to verify that a cooking unit is working properly.

Establish effective record keeping to document the HACCP system. This would include records of hazards and their control methods, the monitoring of safety requirements and action taken to correct potential problems. Each of these principles must be backed by sound scientific knowledge: for example, published microbiological studies on time and temperature factors for controlling food borne pathogens. 5.Answers will vary depending on the individual/group efforts of the students.

6.Answers will vary, depending on the individual processes of the students. Such an instrument for evaluating the process orientation of an organization might be built on leading process management practices including:

* Translating customer requirements into product and service design requirements, taking into account linkages between product design requirements and manufacturing process requirements, supplier capabilities, and legal and environmental issues.

* Ensuring that quality is built into products using appropriate engineering and quantitative tools

* Effective management of the product development process to enhance cross-functional communication, reduce product development time, and ensure trouble-free introduction of products and services.

* Defining and documenting important production/delivery and support processes, and managing these as important business processes.

* Defining performance requirements for suppliers, ensuring that requirements are met, and developing partnering relationships with key suppliers and other organizations.

* Controlling quality and operational performance of all key business processes, using systematic methods to identify significant variations in operational performance and output quality, determine root causes, make corrections, and verify results.

* Continuously improving processes to achieve better quality, cycle time, and overall operational performance.

* Innovating to achieve breakthrough performance using such approaches as benchmarking and reengineering.

7. This project is designed to encourage students to consider what steps are required to develop a process manual. Some ideas on what such a manual contains might be found in the Gold Star Chili QIP case.8. This project is designed to help the student to find which techniques are used in businesses to improve their processes. Results will vary, but often related to the quality focus in the firm. Most companies now chart some output measures. How an organization approaches problem solving is not as critical as doing it in a systematic fashion, whether they use the Deming cycle, CPS, or some other variation. Dont expect to see sophisticated approaches or complex statistical tools except in the most advanced quality-minded organizations (for example, those with a Six Sigma program.)9. This project will take significant time to develop, but can pay tremendous dividends in learning how to use quality tools for problem solving and improvement. It would also help to get school administrators involved in systematic quality improvement processes. This would be a good term project for a student.

10. Results will vary, depending on the personal problem chosen. See Review Question 15, for a frame of reference for this project.

11. This is also a good community service project, similar to project 9 that will also provide excellent experience for students in applying the process improvement concepts and tools of quality.

12. Students can often identify a number of objectives for improvement when they do a personal TQM project in this or a related course (see Chapter 1 for details). Some typical objectives are get up on time (no snooze alarm), study chapters before coming to class, eat no more than one junk food item out of the vending machine each day, etc. Poka-yoke devices to at least remind them of each objective would be: place the alarm clock on the far side of the room, so that one has to walk over to turn it off; place a reminder note on the refrigerator to remind one to study the chapters, the night before a class; put change for one snack in a special change purse or pocket, which will be empty after the student eats the one junk food item for the day.

13. Results will vary, depending on the manager who is interviewed and the type of company or industry that is chosen.

14. Results will vary, depending on the quality improvement tool chosen. This will help expose students to some of the dozens of improvement techniques that are available.

15.Results will vary, depending on the article that is chosen for review from Grouts website.

ANSWERS TO CASE QUESTIONSI. The State University Experience

1.The prospective student experienced a number of service quality defects in trying to navigate "the system" at State College. First, the tour guide was not well trained, thus creating a poor initial impression.

The admissions process obviously needed improvement. The application form was confusing, a transcript was lost, the choice of major by the applicant was miscoded, and the confirmation form contained redundant information that had been requested on the previously submitted application form.

The billing and financial aid processes were also uncoordinated. The systems for payment seemed to have some unresolved problems, which created errors and confusion.

2.To fix the problems with the systems at State University, administrators should begin with customer focus. They need to understand the problems of the average 18-25 year old prospective student, and design their processes to be user-friendly. This would require them to chart the processes (such as admissions, financial aid and billing), analyze them for unnecessary steps and overlap (such as the same information required on the application and the acceptance form), gather data on the problems and perhaps analyze them using Pareto analysis, and redesign the system to simplify it. With this approach, customer satisfaction could certainly be improved.

II. The PIVOT Initiative at Midwest Bank Part I

The Define Process

1. It appears that preparation of the team members gave them the basic tools needed to undertake the challenge of finding a solution to a significant bank problem. The project team received valuable training in the Yellow Belt stage that allowed them to calculate the initial process capability in terms of the sigma level. In addition, a trained Six Sigma analyst was in charge of data integrity, graphical analysis, and data stratification. Other team members were selected for the contributions that they could make to defining, collecting, and interpreting data and coming up with possible solutions to the problem.

2. The roles for Midwest Banks team members were not as clear-cut as those in the Team Member Roles, Responsibilities, and Performance Attributes (Table 6.1). The team consisted of six members, excluding the project champions. Besides the Champions, other roles listed in the table can be identified. Key roles of team members were: Team Leader (called the Project Coordinator by Midwest), the facilitators (process owners described as the Assistant Vice President and team Supervisor from CPD), the technical facilitator (the Project /Six Sigma Analyst for CPD), and various other Core Team members (Operations Finance Manager and the other Project Coordinator). While not specifically named, it is likely that a timekeeper and scribe were appointed, perhaps on a meeting-by-meeting basis.The team makeup differs from the conventional Six Sigma team roles because Midwest Bank was in the process of setting up their own version of a Six Sigma process and they wanted to avoid duplicating the exact terminology of a General Electric or other similar processes. Further support for this theory can be provided by the fact that they called their process the PIVOT process, not the Midwest Six Sigma process.

One puzzling omission from the team was the absence of line employees. It would appear in hindsight that first line bank employees could have provided valuable insights into the process, potential sources of errors, and how improvements would be accepted and supported.

3. The decision to include the $280,000 anomaly was a difficult judgment call. While it might possibly never happen again, the existing system was not strong enough to prevent it. Another reason could have been based on managerial politics. If a sound Six Sigma solution to the problem was found, it is likely that other departments would notice the success and be more likely to want to undertake their own projects, using this project as a model.

Another approach to roles and accountability at various stages of the life-cycle of a Six Sigma project was provided by the following table, which can be found in the previous edition of our textbook, as well as in the reference for which it was originally developed. Table 7.4 Project Lifecycle Accountability Matrix

(From Chapter 7 in the 7th edition of Managing for Quality and Performance Excellence)

Stage

Role \Project

Quality

InitiationProject

Quality

PlanningProject

Quality

AssuranceProject

Quality

ControlProject

Quality

Closure

ChampionSelect project

manager, promote Six Sigma use, align and select project, commit to charterDetermine

decision-making

authority, commit

to plan, allocate resources needed for project successConduct

external customer

communications,

mentor project

manager, clear

obstacles as

neededConduct

external customer

communications,

mentor project

manager, approve or reject process improvements,

clear obstacles as

neededSign off on completed project, recognize and

reward participants,

assess project to

improve system

External

Customer (or Process Owner)Identify and

prioritize

expectations,

commit to charterContribute process knowledge, identify customer satisfaction

standards and tradeoff values, commit to planParticipate in

ongoing

communications, assist in obtaining approvals for changes in processesConfirm ongoing

satisfaction level,

accept deliverablesVerify when usage training and support are completed, assess

project to improve

system, ensure that new processes are implemented, signoff

Master Black Belt (Technical Consultant)Assist in strategic project selection, promote Six Sigma vision, tools, and processAssist in identifying data collection and analysis needs, provide training resources, ensure that processes are statistically soundParticipate in ongoing communications, mentor project manager, facilitate cross-project sharing and learningProvide expertise in design of process improvements, support project manager (SSBB and/or SSGB)Assist in development of management presentations, do project signoffs, ensure that project results are publicized, disseminate best practices and lessons learned

Project

Manager

(SSBB and/or SSGB)Select core team,

identify risks,

empower

performance,

commit to charterIdentify customer

satisfaction

standards and

tradeoff values, plan for short-term training if needed,

develop quality and

communications

plans, commit so

planConduct customer/manage-ment communi-cations, select tools, confirm qualified

processes used, oversee data gathering and analysis, manage quality audits and planningTrack progress, critical success factors, and costs versus plan; implement mid-course corrections; measure customer satisfaction;

manage process

improvementsNotify champion of project completion, recognize and

reward participants,

assess project to

improve system

Core TeamDetermine team

operating

principles, flowchart

project, identify

lessons learned,

commit to charterPlan project, contribute special expertise,

identify suppliers,

qualify the process,

identify data to

collect, commit to

planUse qualified

processes, gather

data, find root

causes, conduct

quality audits, plan

future work.Measure customer

satisfaction, test

deliverables,

correct defects,

endorse

deliverablesProvide customer

support and

training, assess

project to improve

system

Source: Adapted from Timothy J. Kloppenborg and Joseph A. Petrick. Managing Project Quality. Vienna, VA: Management Concepts, 2003, p. 11, used with permission.

IV. Novel Connect

Although not required for this exercise, the feedback report comments for this case, based on the 2008 Baldrige criteria and the Baldrige Training Feedback Report, are enlightening and serve the purpose of addressing the issues of the Category 6 response of Novel Connect. The companys response in their application will not be duplicated here.Category 6 Process Management

6.1 Work Systems Design

STRENGTHS

Novel Connects four core competencies (Figure 6.1-1) were established during a two day workshop in 2000, and they have been reviewed annually since 2002. Review inputs include data from customer focus groups, surveys, sales trend analysis, and call center data. The data are integrated and validated using a quality function deployment (QFD) matrix. The reviews are conducted as part of the SPP cycle, and the process aligns with the voice of the customer, which helps ensure that the core competencies evolve with changing customer needs. Further, the QFD matrix is used as part of the analysis to determine if processes remain internal or use external resources. The analysis determines correlations among process performance, customer satisfaction, and a current competency.

Key work process requirements are initially defined in individual process flow diagrams by process owners using a standard approach that includes collecting requirements from both internal and external customers. These process requirements are maintained by the respective process owners, who use an annual evaluation and update process to assess how well the process is meeting the requirements. For example, through this process, improvements were made to the Internet order fulfillment process and the returns process. Requirements for all value creation and value stream support processes are identified in Figure 6.1-2.

Novel Connect uses the PFPD Process (Figure 6.1-4) to design new products, features, and process options. The PFPD Process is used to transform data and requirements into sample products and to test production runs. The resulting challenge tests are performed by a sample group of internal or external customers.

As part of Novel Connects Emergency Preparedness Process (EPP), a formal risk assessment for all physical operations and daily process activities is conducted annually by a Risk Assessment Team (RAT), and results are entered into a risk management matrix. These assessments are augmented with job safety analyses, monthly safety training, and annual drills. The RATs list of contingent actions for medium- and high-level risk items is compared against the current process, and revisions are made as appropriate. In 2005, the process was improved to include the technology infrastructure. The EPP supports Novel Connects core values of valuing employees/partners and sustainability.

OPPORTUNITIES FOR IMPROVEMENT

The SLT uses performance information related to meeting customer expectations, coupled with a process synergy map (Figure 6.1-3), to design and innovate the overall work system. However, it is not clear (1) whether the steps and methods used by the SLT are systematic or (2) whether they are integrated with establishing the roles of the workforce, suppliers, and partners in producing and delivering products and services. The lack of a systematic approach to designing the overall work system may limit Novel Connects ability to realize its success factors of responding rapidly to marketplace changes with new products and optimizing process performance to maintain strong margins.

While Novel Connect uses input from customers to define and maintain process requirements, it is not evident that input from key suppliers and partners is sought and used in this process. Without such input, Novel Connect may have difficulty ensuring that its processes are responsive to all stakeholders, including critical partners such as its cell carrier and retailers, and Novel Connect may not be able to fully leverage its strategic advantage of lowered costs from offshore suppliers.

It is not clear how the PFPD Process (Figure 6.1-4) systematically incorporates all key requirements, agility, new technology, and organizational knowledge, as well as cycle time, productivity, cost control, and other efficiency/effectiveness factors, into process design. Without a systematic approach for consideration of these factors, Novel Connect may have difficulty ensuring that its processes are optimized, which may in turn impact its ability to address the strategic challenge of volatility in niche markets.

6.2 Work Process Management and Improvement

STRENGTHS

To help ensure that work processes meet key design and process requirements, process owners (identified for all key processes) monitor key process data and performance daily. In process metrics (Figure 6.1-2) include safety, quality, staffing, cost, and cycle-time indicators. Indicators such as cycle times and error rates for processes are tracked and trended to help ensure that daily operations meet key process requirements. Key process diagrams are reviewed and updated annually. Alignment with stakeholders is facilitated through the annual Improvement Day, which is led by the respective process owners. Outputs are maintained in MAP, allowing integration with Novel Connects other performance management system areas.

To help prevent defects, service errors, and rework, process owners are required to share significant beneficial or adverse trends determined from their daily monitoring, as well as improvement efforts. This information can in turn be used to generate preventive actions. The information is stored in a database and is shared during daily process owner meetings, which last five to ten minutes and may be conducted virtually. In addition, the PFPD Process includes a formal challenge test step that may identify defects that could lead to service errors, rework, and warranty costs.

The PIP (Figure 6.2-1) is used to improve process performance. Components include annual process reviews, the annual Improvement Day with stakeholders, and the use of crossfunctional teams where necessary. Trends and improvement efforts are shared at Triple-M meetings and are st