GROUP 5 – PROCESS MANAGEMENT
BUSINESS PROCESSES
Common business process include acquiring customer and
market knowledge, strategic planning, research and development,
purchasing, developing new products or services, fulfilling customer
orders, managing information, measuring and analyzing performance,
and employees, to name just a few:
Customers
• Market knowledge on the
product
Managing
Information
• The use ofIT, measuring,
analyzing performance, training
Two Major Types of Processes: (Senior Managers)
Value-creation Processes
Sometimes called core processes
Those important in “running the
business” and maintaining or
achieving a sustainable competitive
advantage.
Relate to organization’s core
competencies and strategic
objectives
Drive the creation of products and
services for customers satisfaction
Includes product design (processes
involve all activities that are
performed to incorporate customer
requirements, new technology, and
organizational knowledge into the
functional specifications of a product
manufactured good or service.)
And production/delivery processes
(processes that create or deliver the
actual product.) Example:
Manufacturing, assembly,
dispensing medications , teaching a
class, etc.
In non-profit organizations, value-
creation processes include
fundraising, media relations, and
public policy advocacy.
Process Requirements:
- Value-creation process requirements usually
significantly on product and service characteristics.
- Support process requirements usually depend on internal
Strategic Planning
• Business development
Planning, Marketing Planning,
or long term planning
Future Plan
• Prediction of future business,
business expansion and
enhancing cash flow
Support Process
Provide infrastructure to value-
creation processes, employees,
and daily operations.
Include processes for finance,
and accounting, facilities
management, legal services,
human resources services,
public relations and other
administrative services.
Value-creation processes are
driven by external customer
needs, whereas support
processes are driven by internal
customer needs.
They help companies create
competitive advantage in
delivery, flexibility, and cost
reduction
Includes project management
(involves activities associated
with planning, scheduling, and
controlling projects. It is
important for six sigma to cut
across organizational
boundaries and requires the
coordination of many different
departments and functions.
depend
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requirements, and they must be coordinated and integrated to
ensure efficient and effective linkage and performance.
PROCESS MANAGEMENT FRAMEWORK
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
Goal of Process Management
To achieve the highest level of process performance
Three important activities:
1. Design - ensures that inputs to the process are adequate, and that
the process steps are well-defined, mistake-proofed, sequenced
properly, lean and understood for consistent and effective execution
2. Control - assesses the process performed is as planned and the
output is on target.
3. Improvement - continue to seek high level of performance in the
process
Application of techniques in Process Management
1. Repeatable - process must recur over time
2. Measurable - provides the ability to capture important quality and
performance indicators to reveal patterns about process performance
PDCA CYCLE (Plan-Do-Check-Act Cycle/Deming Cycle)
- Implementing new ideas in a controlled way
- Encourages you to be methodical in your approach to
problem solving and implementing solutions.
DESIGNING WORK PROCESSES
The Goal of process design – Is to develop efficient procedure to
satisfy both internal and external customer.
Flexibility – Refers to the ability to adapt Quality and effectively to
changing requirements.
Agility – Is a term commonly used to characterized flexibility and start
cycle times.
Mistake Proofing Processes
- Human Beings tend to Mistakes in advertently.
Typical Mistakes in production are omitted processing
 Processing errors
 Set up errors missing parts
 Wrong part and adjustment errors
Poka-Yoke (POH-kah YOH-key) is an approach for mistake proofing
using automatic devices or methods to avoid simple human errors.
The Poh kah yoh key concept was develop and refined in the early
1960s by the late Shigeo Shingo
a Japanese manufacturing engineer who develop the toyota
production system.
Poh kah yoh key is focused on two aspects:
 Prediction or recognizing that defect is about to occus and
providing a warning
 Defection that a defect has occurred and stopping the
process.
The level of Mistake Proofing with increasing cost associated with
them.
1. Designing potential errors out of the process.
2. Identifying potential defects and stopping a process before the
defect produced
3. Finding defects that enter or leave a process
 GROUP 5 – PROCESS MANAGEMENT 2

- In this philosophy, improvement in all areas of

The list summarizes the typical types of service errors and related business—cost, delivery, schedules, employee salary
poka yoke. and skill development, supplier relations, new product
development, or productivity--- serve to enhance the
 Task errors quality if the firm.
 Treatment errors - Kaizen focuses on small, gradual and frequent
 Tangible errors improvements over the long-term with minimum financial
 Customer errors in preparation investment, and participation by everyone in the
 Customer errors during an encounter organization
 Customer errors at the resolution stage of a service - The kaizen institute suggests some basic tips for
encounter implementing kaizen. These fixed ideas : thinking how to
PROCESS CONTROL do something, not why it cannot be done, not making
excuses, but questioning current practices and seeking
Importance of Process Control the “wisdom of ten people rather than the knowledge of
one” By instilling kaizen into people and training them
1. Process control methods are the basis for effective daily with basic quality improvement tools, workers can build
management of processes. this philosophy into their work and continually seek
2. Long-term improvements cannot be made to a process unless improvement in their job. This process-oriented
the process is brought under control
approach to improvement encourages constant
Control VS Improvement communication among workers and managers

Control – the activity of ensuring conformance to the requirements and Successful Kaizen Program
taking corrective action when necessary to correct problems and
maintain stable performance. 1. Operating practices
- Operating practices expose new improvement
Improvement – changing the average performance to a new level of opportunities. Practices such as JIT reveal
reducing variation, around the current average performance. waste and inefficiency as well as poor quality
2. Total involvement
4 Elements in a Control System:

1. Standard or goal - Every employee strives for improvement. Top

2. Means of measuring accomplishment management views improvement as an
3. Comparison of results with the standard to provide feedback inherent component of corporate strategy and
4. Ability to make corrections as appropriate provides support to improvement activities by
allocating resources effectively and providing
Reasons why high rates of error occur in visual interpretation of product reward structures that are conducive to
characteristics or in manual reading of gauges: improvement. Middle Management can
implement top management’s improvement by
1. Complexity – more parts and less orderly arrangement
2. Defect rate – when the product defect rate is low, inspector improving cooperation between departments;
tend to miss more defects than when the defect rate is higher. and by making employees conscious of their
3. Inspection rate – inspector’s performance degrades rapidly as responsibility for improvement and developing
the inspection rate increases their problem-solving skills through training.
Supervisors can direct more of their attention
PROCESS IMPROVEMENT to improvement rather than “supervision”
which in turn, facilitates communication and
Continuous Improvement - It is an on-going effort to improve products,
services, or processes. offers better guidance to workers
- One of the foundations of total quality management
3. Training
History - Workers can engage in improvement through
1894 - National Cash Register Company suggestions systems and small group
Lincoln Electric (Focused on activities, self-development programs that
Productivity & Cost) teach practical problem-solving techniques
Procter & Gamble (Focused on
Productivity & Cost) and enhanced job performance skills. All
1946 - Toshiba these improvements require significant
1950 - Matsushita Electric training, both in the philosophy and in tools
1951 - Toyota - JUST-IN-TIME and techniques.

Just in Time – Companies could make products
efficiently with virtually zero defects. JIT
established a philosophy of improvement, which
the Japanese called Kaizen.
KAIZEN
- Gradual and orderly continuous improvement
Although kaizen is meant to be a part of daily work, many
organizations are faced with quality performance issues that
require immediate attention. As a result, kaizen concepts
have been incorporated into a team- and project driven rapid
improvement initiative called kaizen blitz.
Kaizen Blitz
 GROUP 5 – PROCESS MANAGEMENT
- Is an intense and rapid improvement process or which
a team or a department throws all its resources into an
improvement project over a short time period, as
opposed to traditional kaizen applications which are
performed on a part-time basis.
- Blitz teams are generally comprised of employees from
all areas involved in the process who understand it and
can implement changes on the spot. Improvement is
immediate, exciting and satisfying for all those involved
in the process.
Improvement Opportunities
Many opportunities for improvement exist; the most obvious
being is reductions in manufacturing defects or service errors.
Another important business metric is cycle time.
CYCLE TIME refers to the time it takes to accomplish one
cycle of process. Reductions in cycle time serve 2 purposes:
1. They speed up work processes so that customer
response is improved
2. Reductions in cycle time can only be accomplished
by streamlining and simplifying processes to
eliminate non-value-added steps such as rework.
- This approach forces improvements in quality by
reducing the potential for mistakes and errors, by
reducing non-value-added steps, costs are reduced
as well.
*Thus cycle time reductions often drive
simultaneous improvements in organization,
quality, cost, and productivity.
Improvement should be a proactive task of management and
be viewed as an opportunity, not simply as a reaction to
problems and competitive threats.
PROCESS IMPROVEMENT METHODOLOGIES
Process improvement methodologies are used to identify, analyze and
improve existing processes within an organization to meet new goals
and objectives.
Tools and Techniques used in Process Improvement:
 Drive
It is an approach to problem solving and analysis that can be
used as part of process improvement.
Define the scope of the problem the criteria by which success
will be measured and agree the deliverables and success
factors.
Review the current situation, understand the background,
identify and collect information, including performance,
identify problem areas, improvement and “quick wins”.
Identify improvements or solutions to the problem, required
changes to enable and sustain the improvements.
Verify check that the improvements will bring about benefits
that meet the defined success criteria, prioritize and pilot the
improvements.
Execute plan the implementation of the solutions and
improvements, agree and implement them, plan a review,
gather feedback and review.
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 Process Mapping
One of the initial steps to understand or improve a process is
Process Mapping. By gathering information, we can construct
a “dynamic model” – a picture of the activities that take place
in a process. Process maps are useful communication tools
that help improvement teams understand the process and
identify opportunities for improvement.
ICOR (input, controls, output and resources) is an
internationally accepted process analysis methodology for
process mapping. It allows processes to be broken down into
simple, manageable and more easily understandable units.
The maps define the inputs, outputs, controls and resources
for both the high level process and the sub-processes.
Process mapping provides a common framework, discipline
and language, allowing a systematic way of working. Complex
interactions can be represented in a logical, high visible and
objective way. It defines where issues or “pinch points” exist
and provides improvement teams with a common decision
making framework.
To construct a process map:
1. Brainstorm all activities that routinely occur within the
scope if the process
2. Group the activities into 4-6 key sub-processes
3. Identify the sequence of events and links between the
sub-processes
4. Define as a high level process map and sub-process
maps using ICOR
Process maps provide a dynamic view of how an organization
can deliver enhanced business value.
“What if” scenarios can be quickly developed by comparing
maps if the process “As is” with the process “To be”.
BREAKTHROUGH IMPROVEMENT
Involves major improvements in key business areas. Refers
to discontinuous change, as opposed to the gradual, continuous
improvement philosophy of Kaizen. Breakthrough improvements
result from innovative and creative thinking; motivated by Stretch
goals, or Breakthrough objectives.
Benchmarking
It is the search for the best practices that will lead to superior
performance. It also defined as “measuring your performance
against that of best-in-classc companies, determining how best-
in-class achieve those performance levels.
3 Major Types of Benchmarking
1. Competitive Benchmarking
Involves studying products, processes, or the
business performance of the competitors in the same
industry.
2. Process Benchmarking
It identifies the most effective practices in companies
that perform similar functions, no matter in what industry. It
centers on key work processes such as distribution, order
entry, or employee training.
 GROUP 5 – PROCESS MANAGEMENT
3. Strategic Benchmarking
Examines how the companies compete and seeks the
winning strategies that have led to competitive advantage
and market success.
Benchmarking process can be described by the process used at AT&T:
- Project Conception: Identify the need and decide to benchmark.
- Planning: Determine the scope and objectives, and develop a
benchmarking plan.
- Preliminary Data Collection: Collect data on industry companies
and similar processes as well as detailed data on your own
processes.
- Best - in - class - Selection: Select companies with best-in-class
processes.
- Best - in - class - Collection: Collect detailed data from
companies with best-in-class processes.
- Assessment: Compare your own and best-in-class processes
and develop recommendation
- Implementation Planning: Develop operational improvement
plans to attain superior performance.
- Implementation: Enact operational plans and monitor process
improvements.
- Recalibration: Update benchmark findings and assess
improvements in processes.
Reengineering
"Process re-design" It improves the quality and speed of
work and to reduce its cost by fundamentally changing the
processes by which work gets done. Reengineering involves
asking basic questions about business processes: Why do we do
it? And, Why is it done this way?
PROCESS MANAGEMENT IN BALDRIGE CRITERIA,
ISO 9000 AND SIX SIGMA
Malcolm Baldrige National Quality Award
- is the national quality award that recognizes U.S.
organizations in the business, health care, education, and non-profit
sectors for performance excellence.
Baldrige Excellence Framework
Early History of the Baldrige Program
-In the early and mid-1980s, many U.S. industry and
government leaders saw that a renewed emphasis on quality was
necessary for doing business in an ever-expanding and more
competitive world market. But many U.S. businesses either did not
believe quality mattered for them or did not know where to begin.
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Public-Private Partnership
 Foundation for the Malcolm Baldrige National Quality Award
 National Institute of Standards and Technology
 American Society for Quality
 Board of Overseers
 Board of Examiners
 Alliance for Performance Excellence
 Award recipients
Process Management in ISO 9000:2000
• The entire set of standards is focused on an organization’s
ability to understand, define and document the processes.
• The standards also address the following:
• Management of inputs and outputs of the design
and development of activities.
• Use of systematic reviews to evaluate the ability to
meet requirements and identify problems and
propose necessary actions.
• Purchasing process 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 measuring of quality management
processes and continual improvement including
preventive and corrective action.
• The standards require that an organization use its policy,
objectives, audit results, data analysis, corrective and
preventive actions.
Process Management in Six Sigma
• Six Sigma is based on understanding and improving
processes on a project by project basis.
• Advantage of Six Sigma:
• Projects are clearly linked to strategic needs and
objectives
• Projects are managed under a common framework
• It provides a neutral fit with the requirements of product and
process design, control and improvement.