Anda di halaman 1dari 70

Created by: Flo Angus, Feb 2016 1

QUALITY MANAGEMENT
POM3013
UNIT 6: Process
Management – Continuous Process
of Improvement and Performance Measures
Created by: Flo Angus, Feb 2016 2

LEARNING OPPORTUNITIES
Upon completion of this module students should be
able to:
• Define a process and its components
• Describe various types of processes within an organization
• Relate the key process focused practices of quality
management
• Discuss process management and its various activities
• Distinguish between value-creation and support processes
• Relate processes to requirements and measurements
• Analyze the elements of Process Design, Process Control and
Process Improvement
• Determine the use of various benchmarking methods
• Discuss briefly, the management of supply chain processes
Created by: Flo Angus, Feb 2016 3

Process Defined
• A Process is a sequence of linked activities that is
intended to achieve some result, such as producing a
good or service for a customer within or outside the
organization. Evans & Lindsay (2014)
• Generally, processes involve combinations of people,
machines, tools, techniques, materials and improvements
in a defined series of steps or actions.
• Processes are commonly regarded in the context of
production:
• the collection of activities and operations involved in transforming
inputs (physical facilities, materials, capital, equipment, people and
energy) into outputs (goods and services).
Created by: Flo Angus, Feb 2016 4

Example of a Process – Attending a Movie


• A process takes inputs and performs value-added
activities on those inputs to create an output.
• We perform processes every day.
• Going to the movies, for example, requires a process…
 The input required includes information about what are the show
times and locations, who is going and what criteria will be used for
choosing a movie.
 The value-added activities are driving to the cinema, buying a
ticket and watching the move.
 The output is the result, the entertainment value of the movie.
Created by: Flo Angus, Feb 2016 5

Types of Processes
• Companies today may have a catalog website
preparation process, a website distribution process, a
process for obtaining the goods it plans to sell, an
ordering process, a credit-check process, a packaging
process, a mailing process, etc. Summers, C.S. (2009).
• Processes found in any organization:
• Financial management
• Customer service
• Equipment installation
• Maintenance
• Production and inventory control
• Employee hiring
• Training, reviewing, firing, delivery and improvement
Created by: Flo Angus, Feb 2016 6

Key Process Focused Practices for Quality


Management
1. Identify vital work processes that relate to core competencies
and deliver customer value, profitability, organizational
success and sustainability.
2. Determine key work process requirements, incorporating
input from customers, suppliers, partners and collaborators.
3. Design and innovate work processes to meet all
requirements, incorporating new technology, organizational
knowledge, product excellence, the need for agility, cycle
time reduction, productivity, cost control and other efficiency
and effectiveness factors.
4. Seek ways to prevent defects, service errors and rework and
minimize costs associated with inspections, tests and
process or performance audits.
Created by: Flo Angus, Feb 2016 7

Key Process Focused Practices for


Quality Management
5. Implement work processes and control their day-to-day
operation to ensure that they meet design requirements,
using appropriate performance measures along with
customer, supplier, partner and collaborator input as
needed.
6. Improve work processes to achieve better performance,
reduce variability improve goods and services, keep
processes current with business needs and directions,
and share improvements with other organizational units
and processes to drive organizational learning and
innovation.
7. Incorporate effective process management practices in
the overall supply chain.
Created by: Flo Angus, Feb 2016 8

How to Identify Key Processes


• Key Processes are the business processes that have the
greatest impact on customers’ value perceptions about
the product or service and the greatest impact on
customer retention.
• Effective organizations concentrate system and process
improvement efforts on business processes that will increase
their competitiveness.
Created by: Flo Angus, Feb 2016 9

Challenges with Processes


• Implementing systems that reduce the frequency of
human errors
• Devising ways of limiting the consequences of the errors
that occur
Created by: Flo Angus, Feb 2016 10

Process Management
• Process management involves planning and
administering the activities necessary to achieve a high
level of performance in key organizational processes, and
identifying opportunities for improving quality and
operational performance, and ultimately, customer
satisfaction. Evans & Lindsay (2014)
Created by: Flo Angus, Feb 2016 11

Process Management Activities


• There are three major activities:
1. Design – focuses on ensuring that the inputs to the process,
such as materials, technology, work methods and a trained
workforce are adequate; and that the process can achieve its
requirements.
2. Control - focuses on maintaining consistency in output by
assessing performance and taking corrective action when
necessary
3. Improvement – focuses on continually seeking to achieve
higher levels of performance, such as reduced variation,
higher yields, fewer defects and errors, smaller cycle times
and so on.
Created by: Flo Angus, Feb 2016 12

Cycle Time
• Cycle time 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 is delivered, or the total
time needed to introduce a new product).
• Cycle time is one of the most important metrics in process
management.
Created by: Flo Angus, Feb 2016 13

Process Owners
• Process Owners are individuals or groups, accountable
for process performance and have the authority to control
and improve their process.
• They range from high level executives who manage
cross-functional processes to workers who run a
manufacturing cell or an assembly operation on the shop
floor.
• Assigning process owners ensures that someone is
responsible to manage the process and optimize its
effectiveness.
Created by: Flo Angus, Feb 2016 14

Requirements for Process Management


• To apply the techniques of process management,
processes must be repeatable and measureable.
• Repeatable means that the process must recur over
time.
• Measurement provides the ability to capture important
quality and performance indicators to reveal patterns
about process performance.

• Meeting these two conditions ensures that sufficient data


can be collected to reveal useful information for control
and improvement.
Created by: Flo Angus, Feb 2016 15

Identifying Processes and Requirements


• Leading organizations identify important processes
throughout the value chain that affect their ability to
deliver customer value.
• These processes fall into two categories:
1. Value Creation Processes
2. Support Processes
Created by: Flo Angus, Feb 2016 16

Value Creation Processes


• According to AT&T, a process is how work creates value
for customers.
• Value-creation processes (aka core processes) are
those most important to “running the business” and
maintaining or achieving a sustainable competitive
advantage.
• They are aligned closely to an organization’s core
competencies and strategic objectives. Core
competencies refer to an organization’s areas of greatest
expertise that provide a sustainable competitive
advantage in the marketplace or service environment.
Strategic objectives are what an organization must
change or improve to remain or become competitive.
Created by: Flo Angus, Feb 2016 17

Nature of Value Creation Processes


• They drive the creation of goods and services,
• Are critical to customer satisfaction
• Have a major impact on the strategic goals of the firm.
• They include product design and production/delivery
processes.
• Product design processes involve all activities that are
performed to incorporate customer requirements, new
technology and organizational knowledge into the
functional specifications of a manufactured good or
service.
• Production/delivery processes create or deliver the
actual product, examples are manufacturing, assembly,
dispensing medication, teaching a class, etc.
Created by: Flo Angus, Feb 2016 18

Nature of Value Creation Processes


• In many organizations, value creation processes take the
form of projects.
• A project is temporary work structures that start up,
produce goods and services and then shut down.
• Project management involves all activities associated
with planning, scheduling and controlling projects.

• Although every project is unique, many projects have


similar underlying processes; thus, viewing them from a
process management perspective can be beneficial.
Created by: Flo Angus, Feb 2016 19

Support Processes
• Support processes are those that are most important to
an organization’s 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.
• They include: finance and accounting, facilities
management, legal services, human resource services,
public relations and other administrative services.
• Though value creation processes generally require a
higher level of attention, failure to adequately manage
support processes can impede the functioning of value
creation processes.
Created by: Flo Angus, Feb 2016 20

Process Requirements
• Understanding the requirements that processes should
meet is vital to designing them.
• One question that may be asked is: “What are the
customer’s expected outcomes from this process?”
• The answer will be gleaned from customer feedback data,
conducting specialised surveys or focus groups and
including customers on design teams.
• Given the diverse nature of value creation processes, the
requirements and performance characteristics might vary
significantly for different processes.
Created by: Flo Angus, Feb 2016 21

KEYNOTE
Value-creation process requirements are driven by
consumer or external customer needs.
Support process requirements are driven by internal
customer needs and must align with the needs of key value-
creation processes.
Identifying process requirements provides the basis for
measuring process performance.
Created by: Flo Angus, Feb 2016 22

Examples of Process Requirements


1. If hotel customers expect fast, error-free check-in, then
the check-in process must be designed for speed and
accuracy. (value-creation)
2. Information technology processes at a hotel must
support the check-in process requirements of speed
and accuracy; this would require real-time information
on room availability. (support)
Created by: Flo Angus, Feb 2016 23
Created by: Flo Angus, Feb 2016 24
Created by: Flo Angus, Feb 2016 25
Created by: Flo Angus, Feb 2016 26

Process Design
• The goal of process design is to develop an efficient
process that satisfies both internal and external customer
requirements and is capable of achieving the requisite
level of quality and performance.
• Other factors include safety, cost, variability, productivity,
environmental impact, “green” manufacturing,
measurement capability and maintainability of equipment.
• Processes generally cut across traditional organizational
functions and rarely operate in isolation, therefore designs
must be considered in relation to other processes that
impact them.
Created by: Flo Angus, Feb 2016 27

Process Design
• Process design begins with understanding:
• its purpose and requirements,
• who the customer is
• What outputs are produced.

• Technology is an integral part of process design that


makes today’s service and manufacturing processes
operate productively and meet customer needs better
than ever.
• For example, fast food restaurants have carefully designed their
food preparation and delivery processes for a high degree of
accuracy and fast response time. New hand-free intercom
systems, better microphones that reduce ambient kitchen noise
and screens that display a customer’s order are all focused on
these requirements.
Created by: Flo Angus, Feb 2016 28

Process Mapping
• Designing a process requires a systematic approach.
• For most processes, this includes defining the sequence
of steps that need to be performed, along with formal
documentation of procedures and requirements.
• To describe the specific steps in a process and their
sequence, we generally develop a process map or
flowchart, along with standard operating procedures and
work instructions.
• As design tools, flowcharts enable management to study
and analyse processes prior to implementation in order to
improve quality and operational performance.
Created by: Flo Angus, Feb 2016 29

Process Mapping Methodology


• The AT&T Customer-Supplier Model provides a
way of building detailed process flow charts.

1. Start with the outputs or customer requirements,


2. Move backwards through the process to identify the
key steps needed to produce each output
3. Stop when the process reaches the supplier input
stage
Created by: Flo Angus, Feb 2016 30

Process Mapping Methodology


• After a flowchart is developed, several fundamental
questions can be asked to analyze the process and
create a more effective design:
Are the steps in the process arranged in logical sequence?
Do all steps add value? Can some be eliminated and others
added?
Are capacities of each step in balance, that is, do bottlenecks exist
which could delay customers?
What skills, equipment and tools are required at each step of the
process?
At which points in the system might errors occur that would result in
customer dissatisfaction, and how might these errors be corrected?
At which point or points should quality be measured?
Where interaction with the customer occurs, what procedures and
guidelines should employees follow to present a positive image?
Created by: Flo Angus, Feb 2016 31

Process Design for Services


• Most cross-functional business value-creation processes
and all support processes are primarily service-oriented,
thus it is important to understand the fundamental
differences between manufacturing and service
processes.
1. The outputs of service processes are not as well defined as
manufactured products.
2. Most service processes involve a greater interaction with the
customer, often making it easier to identify needs and
expectations.
3. Customers often cannot define their needs for service until after
they have some point of reference or comparison
Created by: Flo Angus, Feb 2016 32

Process Design for Services


• Service processes often involve both internal and external
activities, a factor that complicates design for quality.
• For example:
• in a bank, poor service can result from the way that tellers treat
customers and also from poor quality of information systems and
communications equipment beyond the control of the tellers.
• Internal activities are primarily concerned with efficiency
(quality of conformance), while external activities – with direct
customer interaction – require attention to effectiveness (quality
of design).
• Often, workers involved in internal operations (back office) do
not understand how their performance affects the customers
they do not see.
• The success of the process depends on everyone – workers
involved in internal as well as external activities –
understanding that they add value to the customer.
Created by: Flo Angus, Feb 2016 33

The Basic Components of Services


• Services have three basic components:
1. Physical facilities, processes and procedures
2. Employee behaviour
3. Employee professional judgment

• Designing a service essentially involves


achieving an effective balance among all
three of these. Too much or too little
emphasis on one component will lead to
poor quality or inefficiency.
Created by: Flo Angus, Feb 2016 34

How Services Differ from Manufacturing


1. Customer contact and interaction
2. Labour Intensity
3. Customization

• For example:
• A railroad is low in all three dimensions.
• An interior design service would be high in all three dimensions
• A typical fast-food restaurant would be medium in customer
contact, high in labour intensity and low to medium in
customization.
Created by: Flo Angus, Feb 2016 35

Varying Dimensions of Services


• Services low in all three dimensions would be similar to
manufacturing organizations. The emphasis on quality should
be focused on the physical facilities and procedures; behaviour
and professional judgment are relatively unimportant.
• As contact and interaction between the customer and the
service system increases, the customer’s impression of
physical facilities, processes and procedures becomes more
important, as does the behaviour of employees.
• As labour intensity increases, variations between individuals
become more important; however, the elements of personal
behaviour and professional judgment will remain relatively
unimportant as long as the degrees of customization and
contact and interaction remain low.
Created by: Flo Angus, Feb 2016 36

Varying Dimensions of Services


• As customization increases, professional judgment
becomes a bigger factor in the ability to provide high
quality service.
• In services that are high in all three dimensions, facilities,
behaviour and professional judgment must be equally
balanced.
Created by: Flo Angus, Feb 2016 37

Design for Agility


• AGILITY is a term that is commonly used to characterize
flexibility and short cycle times. E.g., e-commerce
requires more rapid, flexible and customized responses
than traditional market outlets.
• FLEXIBILITY refers to the ability to adapt quickly and
effectively to changing requirements. Flexibility might
demand special strategies such as modular designs,
sharing components, sharing manufacturing lines and
specialized training for staff.
Created by: Flo Angus, Feb 2016 38

Agility
Enablers of Agility Uses of Agility

• Close relationships with • Agility is crucial to


customers to understand customer-focused
their emerging needs and
requirements strategies such as:
• Empowering employees as • Mass customization –
decision makers providing personalized,
custom-designed products to
• Effective manufacturing and meet individual customer
information technology
preferences at prices
• Close supplier and partner comparable to mass-
relationships produced items.
• Breakthrough improvement
Created by: Flo Angus, Feb 2016 39

Mistake-Proofing Processes
• Human beings are prone to make errors.
• Typical mistakes in production include omission of steps
in a process, setup errors, missing parts, wrong parts and
so on.
• Errors can arise from any of the following factors:
• Forgetfulness due to lack of reinforcement or guidance
• Misunderstanding or incorrect identification because of the lack of
familiarity with a process or procedures
• Lack of experience
• Absentmindedness and lack of attention, especially when a
process is automated.
• Blaming workers lowers morale and usually does not
address the source of the problem. Both Deming and
Juran stated that the fault usually lied in the system
Created by: Flo Angus, Feb 2016 40

How to Prevent Mistakes


1. Designing potential defects and errors out of the
process. This approach is most preferred since it
eliminates any possibility that the error or defect will
occur.
2. Identifying potential defects and errors and stopping a
process before they occur. It may prevent defects and
errors, but results in some non-value added time.
3. Identifying defects and errors soon after they occur and
quickly correcting the process. This can avoid large
amounts of costly defects and errors in the future, but
does result in some scrap, rework and wasted
resources.
Created by: Flo Angus, Feb 2016 41

Poka-yoke
• An approach for mistake-proofing processes using automatic
devices or simple methods to avoid human error.
• It is focused on two aspects:
1. Prediction, or recognizing that a defect is about to occur and
providing a warning
2. Detection, or recognizing that a defect has occurred and stopping
the process.
• Poka-yoke concept was developed and refined in the early
1960s by the late Shigeo Shingo, a Japanese manufacturing
engineer who developed the Toyota production system.
• Many applications of poka yoke are deceptively simple,
inexpensive to implement and often quite creative.
• It is a good way of engaging workers in continuous
improvement activities.
Created by: Flo Angus, Feb 2016 42

Applying Poka-Yoke to Services


• According to Chase and Stewart, the major differences
are that service mistake-proofing must account for the
customers’ activities as well as those of the producer, and
for interactions between the customer and provider.
• They classify service poka yokes by the type of error they
are designed to prevent: server errors and customer
errors.
• Customer errors occur during preparation, the service
encounter or during resolution.
Created by: Flo Angus, Feb 2016 43

Typical Server Errors and Related


Poka Yokes
• Task Errors – doing work incorrectly, work not requested,
work on the wrong order, or working too slowly.
• Related Poka Yoke Device – color coded cash register keys,
measuring tools such as a French-fry scoop, and signaling devices.
• Treatment Errors – arise in the contact between the
server and the customer, such as lack of courteous
behaviour, and failure to acknowledge, listen or react
appropriately to a customer.
• Related Poka Yoke Device – a bank encourages eye contact by
requiring tellers to record the customer’s eye colour on a check list
as they start the transaction. To promote friendliness at a fast food
restaurant, trainers provide the four specific cues for when to smile:
when greeting the customer, when taking the order, when telling
about the dessert special and when giving the customer change.
Created by: Flo Angus, Feb 2016 44

Typical Server Errors and Related


Poka Yokes
• Tangible Errors – those physical elements of the service,
such as unclean facilities, dirty uniforms, inappropriate
temperature, and document errors.
• Related Poka Yoke Device – hotels wrap paper strips around
towels to help the housekeeping staff identify clean linen and show
which ones should be replaced.
Created by: Flo Angus, Feb 2016 45

Typical Customer Errors and Related


Poka Yokes
• Customer Errors during the encounter – can be due to inattention,
misunderstanding or a memory lapse, and include failure to
remember steps in the process or to follow instructions.
• Related Poka Yoke Device – height bars at amusement rides that indicate
rider size requirements or beepers that signal customers to remove cards from
ATM machines.
• Customer Errors at the resolution stage – of a service encounter
include failure to signal service inadequacies, to learn from
experience to adjust expectations and to execute appropriate post-
encounter actions.
• Related Poka Yoke Device – hotels might enclose a small gift certificate to
encourage guests to provide feedback.
• Customer Errors in preparation – include the failure to bring
necessary materials to the encounter, to understand their role in the
service transaction and to engage the correct service.
• Related Poka Yoke Device – a computer manufacturer provides a flowchart to
specify how to place a service call. It prompts them to have the necessary
information before calling.
Created by: Flo Angus, Feb 2016 46

Process Control
• Control is the activity of ensuring conformance to the
requirements and taking corrective action when
necessary to correct problems and maintain stable
performance.
• Any process performance measure naturally fluctuates
around some average level.
• Abnormal conditions or unusual events may cause a
departure from this pattern.
• Removing the causes of such abnormalities and
maintaining consistent performance is the essence of
control.
Created by: Flo Angus, Feb 2016 47

Elements of a Control System


• There are four elements, namely:
1. A standard or goal – defined during planning and design
processes.
2. A means of measuring accomplishment – established by
goals, reflected by measurable quality characteristics, such as
product dimension. Measuring quality characteristics may be
accomplished through an inspection activity.
3. Comparison of results with the standard to provide
feedback – to determine whether corrective action is needed.
Statistical process control is used to signal when deviations
require corrective action.
4. The ability to make corrections as appropriate.
Created by: Flo Angus, Feb 2016 48

Process Control in Manufacturing


• In manufacturing, control is usually applied to incoming
materials, key processes and final products and services.
• Control in manufacturing starts with purchasing and
receiving processes.
• If incoming materials are of poor quality, the final product
would be equally poor.
• The burden of supply high-quality product rests with
suppliers, chiefly.
• Occasional inspection might be used to audit compliance,
but suppliers should be expected to provide
documentation and statistical evidence that they are
meeting specifications.
Created by: Flo Angus, Feb 2016 49

Process Control in Services


• For many services, process control follows the same
sequence as in manufacturing. (see above)
• However, in services, with higher customer contact,
labour intensity, and/or customization, control can be
challenging.
• Human behaviour – both the customers’ and the service
provider’s is more difficult to control than mechanical or
automated processes.
Created by: Flo Angus, Feb 2016 50

Process Improvement
• Continuous Improvement refers to both incremental
changes, which are small and gradual, and breakthrough
improvements, which are large and rapid.
• Continuous improvement is one of the foundation
principles of total quality.
Created by: Flo Angus, Feb 2016 51

Importance of Continuous Improvement


• Continuous improvement is an important business
strategy in competitive markets because:
1. Customer loyalty is driven by delivered value
2. Delivered value is created by business processes
3. Sustained success in competitive markets requires a business to
continuously improve delivered value
4. To continuously improve value creation ability, a business must
continuously improve its value creation processes.

• Improvement should be a proactive task of


management and be viewed as an opportunity, not
simply as a reaction to problems and competitive
threats.
Created by: Flo Angus, Feb 2016 52

Examples of Improvement
• New and improved products and services
• Reductions in waste and cost
• More efficient manufacturing systems
• Increased productivity and effectiveness in the use of all
resources
• Improved responsiveness
• Cycle time performance
Created by: Flo Angus, Feb 2016 53

Cycle Time
• An important area for improvement is reducing cycle time.
• Reductions in cycle time serve two 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.

• Cycle time reductions drive simultaneous improvements


in organization, quality, cost and productivity.
• Significant reductions are generally achieved by focusing
on cross-functional processes, not only on individual sub-
processes.
54

Breakthrough Improvement
• Breakthrough improvement implies a one-time change
that is ‘discontinuous’. This contrasts the concept of
‘continuous improvement’ purported by quality
management and the ‘kaizen’ principle.
• Breakthrough improvement is the product of stretch
goals and breakthrough objectives.
• Stretch goals force organizations to think radically and
encourage major improvements.
55

Approaches to Breakthrough
Improvement

• There are two approaches for breakthrough


improvement that help firms achieve stretch
goals –
1. Benchmarking
2. Reengineering
56

What is Benchmarking?
• Benchmarking is defined as “measuring your performance
against that of best-in-class companies, determining how
the best-in-class achieve those performance levels and
using the information as a basis for your own company’s
targets, strategies and implementation.” (Pryor, 1989).
Put another way,
• It is “the search of industry best practices that lead to
superior performance.”
57

What are ‘Best Practices’?


• Best Practices refer to approaches that produce
exceptional results, are usually innovative in terms of use
of technology or human resources, and are recognized by
customers or industry experts.
• By studying outside best practices, a company can
identify and import new technology, skills, structures,
training and capabilities.
58

The Purpose of Benchmarking

• Used to compare key measures of performance with


those of others, in order to determine where improvement
opportunities exist.
• Measures an organization against recognized standards
or the best-performing companies in the industry
59

The Benchmarking Process

• During a benchmarking process, a company compares its


performance against a set of standards or against the
performance of best-in-field companies.
• With the information provided by the comparison, a
company can determine how and where to improve its
own performance.
• Benchmarks serve as reference points.
60

Types of Benchmarking
• Internal
• External
• Functional
• Competitive
• Process
• Strategic
• International
61

Internal Benchmarking

• Involves benchmarking businesses or operations from


within the same organization, for example business units
in different countries
• One shortfall with internal benchmarking is that Real
innovation may be lacking, and best in class
performance is more likely to be found through external
benchmarking
62

External Benchmarking
• External Benchmarking can be either competitive or
functional.
• Performance or Competitive benchmarking focuses
on companies within their own market, sometimes direct
competitors, studying they business performance and
processes.
• Functional benchmarking is performed by companies
wanting to study a particular process. They choose
organizations with similar processes regardless of their
industry
63

Competitive Benchmarking
• Used when businesses wish to consider their position in
relation to performance characteristics of key products
and services, benchmarking partners are drawn from the
same sector
• This type of analysis is often undertaken through trade
associations or third parties to protect confidentiality
Most appropriate for...
• Assessing the relative level of performance in key areas
or activities in comparison with others in the same sector,
and finding ways of closing gaps in performance.
64

Process Benchmarking
• Focuses on improving specific critical processes and
operations
• Benchmarking partners are sought from best practice
organizations that perform similar work or deliver similar
services
• Involves producing process maps to facilitate comparison
and analysis
• Often results in short term benefits
Most appropriate for...
• Achieving improvements in key processes to obtain quick
benefits
65

Strategic Benchmarking
• Used when businesses need to improve overall
performance, strategic benchmarking examines the long-
term strategies and general approaches that have
enabled high-performers to succeed.
• It involves considering high level aspects such as core
competencies, developing new products and services,
and improving capabilities for dealing with changes in the
external environment.
• Changes resulting from this type of benchmarking may be
difficult to implement and take a long time to materialise.
66

International Benchmarking
• Best practitioners are identified and analysed
elsewhere in the world, perhaps because there
are too few benchmarking partners within the
same country to produce valid results
• Globalization and advances in information
technology are increasing opportunities for
international projects. However, these can take
more time and resources to set up and
implement, so the results may need careful
analysis due to national differences
Created by: Flo Angus, Feb 2016 67

Managing Supply Chain Processes


• Supply chains are among the most important business
processes and can be viewed as encompassing many
key value-creation and support processes such as
supplier selection and certification, purchasing, logistics,
receive and performance measurement.
• Supply chains help to create competitive advantage in
delivery, flexibility and cost reduction.
Created by: Flo Angus, Feb 2016 68

Suppliers
• Suppliers include not only companies that provide
materials and components, but also distributors,
transportation companies, information, health care and
education providers.
• Key suppliers might provide unique design, technology,
integration or marketing capabilities that are not available
within the business and therefore can be critical to
achieving such strategic objectives as lower costs, faster
time to market and improved quality.
• Many companies segment suppliers into categories based
on their importance to the business and manage them
accordingly.
Created by: Flo Angus, Feb 2016 69

Supplier Certification
• Many companies use some type of supplier certification
process to help management their supply chain.
• These processes are designed to rate and certify suppliers who
provide quality materials in a cost-effective and timely manner.
• The Pharmaceutical Manufacturers Association defines a
certified supplier as one that, after extensive investigation, is
found to supply material of such quality that routine testing on
each lot received is unnecessary.
• Supplier certification is driven by performance measurement
and rating processes. For example, at Boeing, suppliers are
rated on delivery – the percentage of pieces the supplier
delivered on time to Boeing during a 12-month period.
• Supplier certification processes are time consuming and
expensive to administer.
Created by: Flo Angus, Feb 2016 70

END OF LECTURE 4 Pt 1
• Any Questions?

Anda mungkin juga menyukai