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
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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).
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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
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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)
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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.
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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.
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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.
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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.
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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.
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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.
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Process Design
• Process design begins with understanding:
• its purpose and requirements,
• who the customer is
• What outputs are produced.
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.
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• 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.
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Agility
Enablers of Agility Uses of Agility
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
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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.
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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.
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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.
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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
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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.
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.
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Approaches to Breakthrough
Improvement
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.”
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Types of Benchmarking
• Internal
• External
• Functional
• Competitive
• Process
• Strategic
• International
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Internal Benchmarking
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
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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.
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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
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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.
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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
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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.
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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.
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END OF LECTURE 4 Pt 1
• Any Questions?