Download - Process-Management Best Practices
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Process-Management Best Practices
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Overview
y
The scope of process management includesprocess in manufacturing and service operations.
y Processes are used to manufacture a product or
to provide a service
y Manufacturing process transform raw materials
into finished goods using labor,equipment,energy
and manufacturing facilities.
y Managements challenge is to control the
process variability so that outputs or outcomes
meet the defined product specifications or
service performance criteria
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Business Process
yA process is a set of interrelated resourcesand activities that transform inputs into
outputs.
yA product or service is the result of activitiesor processes.
yTwo kinds of process models exist: the as
is process model and the to be processmodel.
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Business Process
y The as is process model portrays how abusiness process is currently structured. During
process improvement efforts, The as is model is
used to establish a baseline for measuring
subsequent business improvement actions and
processes.
y The to be process model results from a
business process redesign or reengineringaction. It shows how the business process will
function in the future after the improvement
action is implemented.
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Business Process
yA process owner should be assigned for
major business processes. This owner
should be held accountable and responsiblefor the workings and improvement of one of
the organizations defined-processes and its
related sub processes
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Business Processes
y The process owner should be closely involved in
the re-engineering team
y Organizations should implement the following
best practices to improve business processes:
y Utilize business-process management tools to
understand and evaluate a business process.
y Understand and listen to the voice of the processin order to improve the business process.
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Business Processes
y Increase production throughput by eliminating
bottlenecks in a process,
y Reducing workloads on the bottleneck resource
y Synchronizing process flows, acquiring newer
and faster equipment,streamlining process flows,
rearranging the work cells and giving employees
incentives to work faster and smarter.y Increase service employees productivity through
proper training, motivation and incentives.
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Business Processes
y Decrease product and process cost by focusing
on value added activities such as process
time,assembly time and core production time.y Decrease product and process cost by
eliminating non-value-added activities and repeat
activities and reducing waste.y Decrease investment in inventory and inventory
levels at all storage locations with just in time
methods and quick response system
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Business Process Reengineering
yBusiness process reengineering (BPR) is a
management technique for achieving
dramatic improvements in cost,quality, andcustomer service by making fundamental
changes in the way an organization defines
its mission and performs its work.
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Business Process Reengineering
BPR is typically characterized by the following elements:
y Challenging the current organizational mindset to
become one that is more receptive to customers and the
environment; driven by top-management efforts.y Identifying and analyzing core business processes
y Applying cost/service/quality measures to determine
how effectively they are meeting customer needs
y Making systematic changes to organizations structure ,
culture, roles and responsibilities in order to support
reengineered processes
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Reengineering process
y Process reengineering changes should not be
constrained by the existing organizational
structure,current thinking or culture of the
organization.
y A reengineering project is situational and specific
to each process and to each organization. When
a reenginering project leads to a new informationrequirements, it may be necessary to acquire
new information technology to support those
requirements
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Reengineering principles
World class organizations have developed fiveprinciples for reengineering organizations in orderto increase customer satisfaction and decrease
operating cost by eliminating non-value-addedactivities.
yPrinciple 1: Top management must be supportiveof and engaged in reengineering efforts to remove
barriers and drive success.yPrinciple 2:An organizations culture must bereceptive to reenginering goals,objectives andprinciples.
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Reengineering principles
yPrinciple 3: Major improvements and savings arerealized by focusing on the business from aprocess rather than a functional perspective.
yPrinciple 4: Processes should be selected forreenginering based on a clear notion of customerneeds, anticipated benefits, and potential forsuccess.
y
Principle 5: Process owners should managereenginering projects with teams that are cross-functional, mantain a proper scope, focused oncustomer metrics, and can enforce implementation
timelines and discipline.
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Business process improvement
y It tends to be more of an incremental change that
may affect only a single task or segment of the
organization
y Methodology forBPI- Methodology for business
operations improvements includes BPI, BPR,
business process redesign,benchmarking and
TQM programs or initiatives.
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Business process improvement
y Championing business operations improvements
require the following five elements to be in
place:
y Invest money wisely- If outdated, labor intensive
work process should be automated. It is essential
for organizations to apply process improvement
techniques to work processes . These techniquesare often reffered to as BPR and BPI .
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Business Process Improvement
y Implement change methodologies- Organizationsshould apply methodologies such as BPI orBPRto evaluate targets for change and areas thatcould benefit from application of informationtechnology.
y Implement business process redesign efforts-Process redesign focuses on improving an entirebusiness process where performance
measurement and benchmarking indicate theopportunity or need for significant performancegains.y Because it often requires additional resources or a
redistribution of existing resources,redesignre uires more senior mana ement attention .
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Business Process Improvement
y Implement benchmarking techniques- Inbenchmarking with others, an organizationdetermines how leading organizations perform aspecific process. Compares their method to itsown and uses the information to improve upon oror completely change its process. It is typically ainternal process performed by personnel withinan organization who already have a thorough
knowledge of the process under review.y Implement a TQM program- It is a management
approach that emphasizes improving product orservice quality while decreasing production or
service costs by increasing the efficiency of work
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Business-process management toolsy
Pareto Diagrams- allows management to focus itsefforts on the problems that have the greatest
potential for improvement by showing relative
frequency and/or size in a descending bar graph.
y Root cause analysis- study of the original reason for
nonconformancewith a process. When the rootcause
is removed or corrected, the nonconformance can be
eliminated. It is a technique used to identify theconditions using who, what,when,where,why and
how to better understand the root causes of issues
and problems
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Business-process management tools
y Flowcharting- can be used to document every
phase of a companys operation.
y Flow charting is a first step toward the
documentation of a process required for ISO
9000 and other quality awards.
y In this way, problems can be traced quickly to the
right source and corrected properly.y Also, The flowcharts can be used as a training
tool or a reference document on the job
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Business-process management tools
y Cause-and-effect diagrams used when a series
of events or steps in a process creates a problem
and it is not clear which event or step is the major
cause of the problem.
y Stratification- a procedure used to describe the
systematic subdivision of population or process
data to obtain a detailed understanding of thestructure of the population or process.
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Business-process management tools
y Tree diagrams- Graphically shows any broad
goal divided into different levels of detailed
actions. It encouragesteam members to expand
their thinking when creating solutions.
y Process-MappingAnalysis- is an illustrated
description of how things get done, which
enables team participants to visualize an entireprocess and identifies areas of strength and
weaknesses.
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Business process management tools
y Check Sheets- used for collecting data in alogical and systematic manner. Data collectedcan be used in constructing a quality control
chart, pareto diagram, or histogram. Mostimportant use is that it enables the user to gatherand organize data in a format that permitsefficient and easy analysis of data.
y Value analysis and value engineering- theorganized and systematic study of every elementof cost in a part, material, or service to makecertain it fulfills its function at the lowest possible
cost.
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Business process management tools
y Run Charts- shows performance measuresmonitored overtime to display variability inprocess output across time periods. Trend and
seasonality factors can be observed.y Histograms- a bar chart showing the frequency
distribution of observed performancecharacteristics such as weights, volume,
response time, cost and customer experienceswith the ordering process.
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Business process management tools
y Scatter diagrams- shows the strength of two
variables of interest in a process under study.
y Control charts - monitors variance in a process
overtime and alert managements to unexpected
variance, which may cause defects. A control
chart is like a run chart and contains an upper
control limit or lower control limit.
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Business process management tools
y Statistical process control- is the application of
statistical methods to analyze data and to study
and monitor process capability and performance.