process-management best practices

8/3/2019 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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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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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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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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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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y Statistical process control- is the application of

statistical methods to analyze data and to study

and monitor process capability and performance.

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