Demming-: Process Management

Amity Business School
Process Management
Demming–
“Most quality problems have been due to processes and
seldom have they been due to men – as normally thought”
- Value Chain
- Value Adding Processes
- Support Processes
Process Management (contd.)

Some leading practices:
– Translation of customers requirements into product & service design early

enough in the process taking into account all linkages between product design
requirement, conversion processes, supplier capabilities & legal and
environmental considerations.
– Ensuring that quality is built into the product and services and use proper
technologies, qualitative tools and approaches during the developmental
process.
– Product development process manages cross functional communication, reduce
time, smooth and uninterrupted introduction of product and process.
– Define and Document important product, delivery & support processes and
manage them as an important business process
– Define performance requirement for suppliers, partners and relationships
– Control quality and operational performance, identify significant variations,
analyze root- causes, apply corrections and verify results.
– Continuously improve process
– Innovate for breakthrough performance improvements through benchmarking
and re-engineering.
Types of Processes
• Value-creation processes
– those most important to “running the business”
– Design processes – activities that develop functional
product specifications
– Production/delivery processes – those that create or
deliver product
• Support processes – those most important to an

organization’s value creation processes, employees, and
daily operations
Control vs. Improvement
Out-of-control
Controlled Improvement
process
New zone
of control
Time
4
Product Design Process

Benchmarked Process
• Idea generation
• Preliminary Concept Development CONCEPTUALIZATION
• Product/Process Development
• Full-Scale production
CONVERSION
• Market introduction
• Market evaluation
EXECUTION
Design Approach Considerations
– Performance
– Cost
– Manufacturability/ Serviceability
– Facility, suppliers & partners capability & preparedness
– Safety & environment
Streamlining Design process
– Concurrent engineering/simultaneous engineering
– Reduced Cycle-time
– Cross Functional involvement
Product Development Process

Idea
Idea
generation
generation
Concept
Concept
development
development
Product &
process design
Full-scale
Full-scale
production
production
Product
Product
introduction
introduction
Market
Market
evaluation
evaluation
6
Stages of Technology innovation
Stage Example
Basic research Sake of Knowledge
Applied research Solving society’s problems
Technology development Converts to prototype
Technology implementation Market place
Production Large scale
Marketing Customer embraces technology
Proliferation Wide spread into society
Technology Advancement Competitive edge

INNOVATION
Science How things are

Technology How to do things
Management How things are done
Technology management Doing things
Entrepreneurship Doing things to make
money
INNOVATION DOING
ENTREPRENEURSHIP
Key Idea
Product design can significantly affect the cost of

manufacturing (direct and indirect labor,
materials, and overhead), redesign, warranty, and
field repair; the efficiency by which the product
can be manufactured, and the quality of the
output.
Design for Manufacturability
• DFM – the process of designing a product

for efficient production at the highest level
of quality
Key Idea
DFM is intended to prevent product

designs that simplify assembly operations
but require more complex and expensive
components, designs that simplify
component manufacture while
complicating the assembly process, and
designs that are simple and inexpensive
to produce but difficult or expensive to
service or support.
Design Quality and Social

Responsibility
• Product liability issues
• Environmental issues
– Design for Environment (DfE) - is the explicit
consideration of environmental concerns
during the design of products and processes,
and includes such practices as designing for
recyclability and disassembly.
Streamlining Product
Development
• Competitive need for rapid product
development
• Concurrent (simultaneous) engineering
- A process in which all major functions
involved with bringing a product to market
are continuously involved with the product
development from conception through sales
• Design reviews
13
Concurrent Engineering
‘concurrent engineering’ is used for the product
development which involves
multi-functional team at the start of the product
development to decrease the lead time.
Traditional versus concurrent

Concurrent engineering and

product life cycle
Designing Processes for Quality

1. Identify the product or service: What work do I do?
2. Identify the customer: Who is the work for?
3. Identify the supplier: What do I need and from whom do I
get it?
4. Identify the process: What steps or tasks are performed?
What are the inputs and outputs for each step?
5. Mistake-proof the process: How can I eliminate or simplify
tasks? What “poka-yoke” (i.e., mistake-proofing) devices
(see Chapter 13) can I use?
6. Develop measurements and controls, and improvement
goals: How do I evaluate the process? How can I improve
further?
Support Processes
Basic Understanding of significant ones;
– Human Resources Processes

– Information Technology Processes
– Finance & Accounts
– Project Management
Exercise: How the above processes get influenced by TQM culture
– Customer Orientation
– Strategic Fit
– Cross Functional Alignment
– Data Analysis
– Measurement and Controls
– Continuous Improvement
Projects as Value-Creation
Processes
• Projects - temporary work structures that
start up, produce products or services, and
then shut down.
• Project management – all activities
associated with planning, scheduling, and
controlling projects
Key Idea
Successful project managers have four

key skills: a bias toward task completion,
technical and administrative credibility,
interpersonal and political sensitivity,
and leadership ability.
Project Life Cycle Management

(1 of 2)
• Project Quality Initiation: Define directions,

priorities, limitations, and constraints.
• Project Quality Planning: Create a blueprint
for the scope of the project and resources
needed to accomplish it.
• Project Quality Assurance: Use
appropriate, qualified processes to meet
technical project design specifications.
Project Life Cycle Management

(2 of 2)
• Project Quality Control: Use appropriate

communication and management tools to
ensure that managerial performance,
process improvements, and customer
satisfaction is tracked.
• Project Quality Closure: Evaluate
customer satisfaction with project
deliverables and assess success and
failures that provide learning for future
projects and referrals from satisfied
customers.
Product life cycle

Supplier & Partnership Processes

• Decentralization & Strategic Outsourcing
– Adding new dimension to the significance
– Competency development, Talent retention & cost of ownership
– Flexibility & Speed to market
• Supplier Involvement
– Product Development
– From Design to Delivery
– Service & Spare parts
– Bench marking on Technology, Materials, Practices & Designs
• Guiding Principles
– Realization of the strategic importance of suppliers
– Developing win-win relationship with suppliers
– Establishing trust through transparency leading to mutual benefits
Exercise: On customer orientation of suppliers
Supplier Partnerships
Juran’s Trend in Supplier Relationships
Element Traditional/Adversarial TQM- Teamwork Focus
• No. of suppliers Multiple/Many Few/Often Single

• Duration of suppliers Annual Contracts 3yrs. or more
• Quality Criteria Conformance to Total Alignment
Specifications Fit for use
• Emphasis on Surveys Procedures, Data & Process Capability
systems
• Quality Planning Separate Joint Certification
• Pattern of Partnership Arms Length Mutual Visits
Secrecy Disclosures & Transparency
Mutual Supervision Mutual Assistance
Service Processes
• Service Product Design:
– Exercise on application of TQM requirement checks
– On how it can influence the Delivery Process
– Typical Customer requirement to be converted in product & delivery
• How Service Processes are ‘unique’

– Measurements are not always possible
– Dealing with softer side of life
– There is no standard customer
• Delivery of Front-end contacts getting influenced by:

– Too many things which are beyond his control or influence
– Physical Facility
– Professional Judgment
– Personal Behaviors
Service Process Design
• Three basic components:

– Physical facilities, processes and procedures
– Employee behavior
– Employee professional judgment
Key Service Dimensions
Customer contact and interaction
Labor intensity
Customization 28
Key Idea
Service process designers must

concentrate on doing things right the
first time, minimizing process
complexities, and making the process
immune to inadvertent human errors,
particularly during customer interactions.
Process Control
• Control – the activity of ensuring

conformance to requirements and taking
corrective action when necessary to
correct problems and maintain stable
performance
Key Idea
Process control is important for two

reasons. First, process control methods
are the basis for effective daily
management of processes. Second,
long-term improvements cannot be
made to a process unless the process is
first brought under control.
Components of Control
Systems
• Any control system has three
components:
1. a standard or goal,
2. a means of measuring accomplishment, and
3. comparison of actual results with the
standard, along with feedback to form the
basis for corrective action.
Key Idea
In manufacturing, control is usually

applied to incoming materials, key
processes, and final products and
services.
Effective Control Systems

• documented procedures for all key processes;
• a clear understanding of the appropriate
equipment and working environment;
• methods for monitoring and controlling critical
quality characteristics;
• approval processes for equipment;
• criteria for workmanship, such as written
standards, samples, or illustrations; and
• maintenance activities.
After Action Review
1. What was supposed to happen?

2. What actually happened?
3. Why was there a difference?
4. What can we learn?
Importance of Process
Improvement
• Customer loyalty is driven by delivered value.
• Delivered value is created by business
processes.
• Sustained success in competitive markets
requires a business to continuously improve
delivered value.
• To continuously improve value creation ability, a
business must continuously improve its value
creation processes.
Key Idea
Improvement should be a proactive

task of management and be viewed as
an opportunity, not simply as a reaction
to problems and competitive threats.
Kaizen
• Kaizen – a Japanese word that means
gradual and orderly continuous
improvement
• Focus on small, gradual, and frequent
improvements over the long term with
minimum financial investment, and
participation by everyone in the
organization.
Kaizen from Japan

Kaizen
Flexibility
• Flexibility – the ability to adapt quickly and

effectively to changing requirements.
– rapid changeover from one product to
another,
– rapid response to changing demands,
– the ability to produce a wide range of
customized services.
Cycle Time
• Cycle time – the time it takes to
accomplish one cycle of a process
• Reductions in cycle time serve two
purposes
– First, they speed up work processes so
that customer response is improved.
– Second, reductions in cycle time can only
be accomplished by streamlining and
simplifying processes to eliminate non-
value-added steps such as rework.
Breakthrough Improvement
• Discontinuous change resulting from
innovative and creative thinking, motivated
by stretch goals, and facilitated by
benchmarking and reengineering
Key Idea
Stretch goals force an organization to

think in a radically different way, and to
encourage major improvements as well
as incremental ones.
Benchmarking
• Benchmarking – “the search of industry best
practices that lead to superior performance.”
• Best practices – approaches that produce
exceptional results, are usually innovative in
terms of the use of technology or human
resources, and are recognized by customers or
industry experts.
Types of Benchmarking
• Competitive benchmarking - studying products,
processes, or business performance of
competitors in the same industry to compare
pricing, technical quality, features, and other
quality or performance characteristics of products
and services.
• Process benchmarking – focus on key work
processes
• Strategic benchmarking – focus on how
companies compete and strategies that lead to
competitive advantage
Reengineering
• Reengineering – the fundamental

rethinking and radical redesign of
business processes to achieve dramatic
improvements in critical, contemporary
measures of performance, such as cost,
quality, service, and speed.
Key Idea
Reengineering involves asking basic

questions about business processes:
Why do we do it? and Why is it done
this way?
Human Resource Development & Management
• Alignment with the Strategy

‘The competition can copy everything, but for the edge that your people can create. It is only them who can make
2+2 more than Four’
– Satisfaction, loyalty and commitment of customer possible only through satisfied,

loyal & committed employees
– Only Loyal employees can create Loyal customers
• Change of Paradigm
– Human Resource Management from Personnel Admin & Management
– From watch dog to strategic leadership through
developing, coaching, training, teamwork, motivation & recognition
• Exercise Traditional versus Total Quality Human Resource Paradigm (table)

Toyota Georgetown
• “We’ve got nothing, technology-wise, that

anyone else can’t have. There’s no secret
Toyota Quality Machine out there. The
quality machine is the workforce -- the team
members on the paint line, the suppliers, the
engineers -- everybody who has a hand in
production here takes the attitude that we’re
making world-class vehicles.”
Key Idea
Businesses are learning that to satisfy

customers, they must first satisfy
employees.
Objectives of HRM
• To build a high-performance workplace

and maintain an environment for quality
excellence to enable employees and the
organization to achieve strategic
objectives and adapt to change.
Key Activities in HRM
• Determine organization’s HR needs to

build a high-performance workplace
• Assist in design of work systems
• Recruit, select, train & develop, counsel,
motivate, and reward employees
• Act as liaison with unions & government
• Handle other matters of employee
well-being
54
Leading Practices (1 of 2)
• Promote cooperation and skill sharing across
work units and locations
• Design work and jobs to promote cooperation,
initiative, empowerment, innovation, and
organizational culture
• Empower individuals and teams to make
decisions that affect quality and customer
satisfaction
• Develop effective performance management
systems, compensation, and reward and
recognition approaches
55
Leading Practices (2 of 2)
• Effective processes for hiring and career progression
• Make extensive investments in training and
education
• Motivate employees to develop and use their full
potential
• Maintain a work environment conducive to the well-
being and growth of all employees
• Monitor extent and effectiveness of HR practices and
measure employee satisfaction
56

(Linking HR Plans to Business Strategy)
How do the Leading Company’s do it;
• Integrate human resources plans with strategic objectives and action plans to
fully address the needs and development of entire workforce
• Design work and jobs to promote organizational learning, innovation and
flexibility for ever changing business needs.
• Develop effective performance management plans, compensation, reward and
recognition approaches to support high performance and motivate employees.
• Promote cooperation and collaboration through teamwork
• Empower individuals and teams to make decisions that impact quality and
customer satisfaction
• Make extensive investment in training, education and development
• Maintain work environment conducive to well-being & growth of all employees
• Monitor the extent and effectiveness of human resources practices & measure
employee satisfaction as a means to continuous improvement.

(Linking HR Plans to Business Strategy)
Roadmap
Corporate operating principles to provide full opportunity to Human Resource impacting
employees to reach their full potential by developing a high Business Strategy
performance culture to support its vision, mission & goals
Attract, develop, challenge & retain a diverse workforce to Staffing & Development
have skills in the organization to build business
Involve & empower employees to improve processes & Involved Employee

participation in decisions that impact business
Recognize & reward performance that contribute to the

Recognition & Reward business strategy and goals
Continuous Improvement Continuously improve those elements of the work environment

That enhance employees well-being, satisfaction and productivity
Teams
• Team - a small number of people with
complementary skills who are committed to a
common purpose, set of performance goals,
and approach for which they hold themselves
mutually accountable
59
Types of Teams
• Management teams
• Natural work teams
• Self managed teams
• Virtual teams
• Quality circles
• Problem solving teams
• Project teams
60
Key Idea
The three basic functions of quality

circles and problem-solving teams are to
identify, analyze, and solve quality and
productivity problems.
Functions of Teams
Identify
Implement problems Select
solutions problem
Identify
Develop Collect
follow-up Solve data
plan
Analyze
Focus
Pick best attention
solution Find
Develop causes
solutions 62
Key Idea
The key stages of a team’s life cycle are

called forming, storming, norming,
performing, and adjourning.
Ingredients for Successful

Teams (1 of 2 )
• Clarity in team goals
• Improvement plan
• Clearly defined roles
• Clear communication
• Beneficial team behaviors
64
Ingredients for Successful

Teams (2 of 2)
• Well-defined decision procedures

• Balanced participation
• Established ground rules
• Awareness of group process
• Use of scientific approach
65
Six Sigma Project Teams

• Champions – senior managers who promote Six
Sigma
• Master Black Belts – highly trained experts
responsible for strategy, training, mentoring,
deployment, and results.
• Black Belts – Experts who perform technical
analyses
• Green Belts – functional employees trained in
introductory Six Sigma tools
• Team Members – Employees who support specific
projects
High Performance Work Systems
Work and Job Flexibility Compensation

Design and
Innovation recognition
Health and Knowledge and skill
safety sharing
Organizational Empowerment
Suggestion alignment
systems Customer focus
Employee
Training and Rapid response Involvement
Education
Teamwork and Cooperation
Designing High Performance

Work Systems
• Work design - how employees are

organized in formal and informal units
(departments, teams, etc.)
• Job design - responsibilities and tasks
assigned to individuals
68
Key Idea
The design of work should provide

individuals with both the intrinsic and
extrinsic motivation to achieve quality
and operational performance objectives.
Hackman / Oldham Model

Core job Critical
characteristics psychological Outcomes
states
Skill variety Experienced

High motivation
Task identity meaningfulness
Task significance of work
High satisfaction
Experienced
Autonomy responsibility High work
effectiveness
Feedback Knowledge of
from job actual results
Moderators 70
Enhancing Work Design
• Job enlargement – expanding workers’

jobs
• Job rotation – having workers learn
several tasks and rotate among them
• Job enrichment – granting more authority,
responsibility, and autonomy
Managing Change
• Cross Functionalism of TQM

• New culture demanding on ‘Organizational Change’
• Type of Changes;
Developmental
Transitional
Transformational
• Dissatisfaction with the STATUS QUO
Frog Example ‘the frog can’t realize the transition from comfort to danger’
• Dissatisfaction with the NEW SITUATION

– Cross functional attention (apply the product development lense)
– Live to change in customer & market expectations
– Quality, cost, productivity & customer delivery focus
Managing Change
New Model of Managing
 Vision communication
Clear, concise & easily understandable
Memorable
Exciting & inspiring
Challenging
Excellence centered
Stable but flexible
Implementable & Tangible
 Specify Key Success Factors (KSF)
 Implementation Plan
Managing Change
TEN COMMANDMENTS OF CHANGE
• Analyze the organization & its need for change

• Create a shared vision and common direction
• Separate from the past
• Create a sense of urgency
• Support a strong leader role
• Line up political sponsorship
• Graft an implementation plan
• Develop enabling structures
• Communicate, involve people & be honest
• Reinforce & institutionalize the change
Traditional versus Total Quality Human Resource Paradigm
(table)
(PLEASE SEE THE WORD DOCUMENT ATTACHED)

Employee Involvement
• Any activity by which employees
participate in work-related decisions and
improvement activities, with the objectives
of tapping the creative energies of all
employees and improving their motivation
76
Key Idea
EI approaches can range from simple

sharing of information or providing input on
work-related issues and making
suggestions to self-directed responsibilities
such as setting goals, making business
decisions, and solving problems, often in
cross-functional teams.
Advantages of EI
• Replaces • Helps people
adversarial mentality understand quality
with trust and principles and
cooperation instilling them into
the organization’s
• Develops skills and culture
leadership abilities • Allows employees to
• Increases morale solve problems at
and commitment the source
• Fosters creativity • Improves quality
and innovation and productivity
Levels of Employee Involvement

LEVEL ACTION PRIMARY
OUTCOME
Information Sharing Managers decide and inform employees Conformance
Dialogue Managers get input and then decide Acceptance
Special Problem Managers assign one time problems to selected Contribution

Solving employees
Intra Group Problem Intact groups meet weekly to solve local problems Commitment
Solving
Inter Group Problem Cross functional teams meet to solve mutual problems Cooperation
Solving
Focused Problem Intact groups deepen daily involvement in a specific Concentration
Solving issue
Limited Self Teams at selected sites function full time with minimum Accountability
Direction supervision
Total Self Direction Executives facilitates self management in an all team Ownership
company
Empowerment
• Giving people authority to make

decisions based on what they feel is
right, to have control over their work,
to take risks and learn from mistakes,
and to promote change.
“A sincere belief and trust in people.”

Successful Empowerment
• Provide education, resources, and

encouragement
• Remove restrictive policies/procedures
• Foster an atmosphere of trust
• Share information freely
• Make work valuable
• Train managers in “hands-off” leadership
• Train employees in allowed latitude
81
Key Idea
Meeting and exceeding customer

expectations begins with hiring the
right people whose skills and attitudes
will support and enhance the
organization’s objectives.
Training and Education

• Quality awareness • Meeting customer
• Leadership requirements
• Project management • Process analysis
• Communications • Process
• Teamwork simplification
• • Waste reduction
Problem solving
• • Cycle time reduction
Interpreting and
using data • Error proofing
Key Idea
Customer needs and strategic directions

should drive training strategies.
Compensation and Recognition

• Compensation
– Merit versus capability/performance
based plans
– Gain-sharing
• Recognition
– Monetary or non-monetary
– Formal or informal
– Individual or group
85
Key Idea
Recognition provides a visible means of

promoting quality efforts and telling
employees that the organization values
their efforts, which stimulates their
motivation to improve.
Effective Recognition and Reward

Strategies
• Give both individual and team awards
• Involve everyone
• Tie rewards to quality
• Allow peers and customers to nominate and
recognize superior performance
• Publicize extensively
• Make recognition fun
87
Motivation
• Motivation - an individual’s response to
a felt need
• Theories
– Content Theories (Maslow; MacGregor;
Herzberg)
– Process Theories (Vroom; Porter &
Lawler)
– Environmentally-based Theories (Skinner;
Adams; Bandura, Snyder, & Williams)
Key Idea
There is no such thing as an unmotivated

employee, but the system within which
people work can either seriously impede
motivation or enhance it.
Performance Appraisal
• How you are measured is how you perform!
• Conventional appraisal systems
– Focus on short-term results and individual behavior;
fail to deal with uncontrollable factors
• New approaches
– Focus on company goals such as quality and
behaviors like teamwork
– 360-degree feedback; mastery descriptions
Key Idea
Performance appraisals are most effective

when they are based on the objectives
that support the strategic directions of the
organization, best practices, and
continuous improvement.
Measuring Employee
Satisfaction and Effectiveness
• Satisfaction
– Quality of worklife, teamwork,
communications, training, leadership,
compensation, benefits, internal suppliers
and customers
• Effectiveness
– Team and individual behaviors; cost,
quality, and productivity improvements;
employee turnover; suggestions; training
effectiveness
Key Idea
HR measures allow companies to predict

customer satisfaction, identify those
issues that have the greatest impact on
business performance, and allocate
appropriate resources.

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Amity Business School

Process Management (contd.)

– Translation of customers requirements into product & service design early

• Support processes – those most important to an

Control vs. Improvement

Product Design Process

Product Development Process

Stages of Technology innovation

Basic research Sake of Knowledge

Applied research Solving society’s problems

Technology development Converts to prototype

Technology implementation Market place

Production Large scale

Marketing Customer embraces technology

Proliferation Wide spread into society

Technology Advancement Competitive edge

Science How things are

Product design can significantly affect the cost of

Design for Manufacturability

• DFM – the process of designing a product

DFM is intended to prevent product

Design Quality and Social

Traditional versus concurrent

Concurrent engineering and

Designing Processes for Quality

– Human Resources Processes

Exercise: How the above processes get influenced by TQM culture

Successful project managers have four

Project Life Cycle Management

• Project Quality Initiation: Define directions,

Project Life Cycle Management

• Project Quality Control: Use appropriate

Product life cycle

Supplier & Partnership Processes

Element Traditional/Adversarial TQM- Teamwork Focus

• No. of suppliers Multiple/Many Few/Often Single

• How Service Processes are ‘unique’

• Delivery of Front-end contacts getting influenced by:

Service Process Design

• Three basic components:

Key Service Dimensions

Customer contact and interaction

Service process designers must

• Control – the activity of ensuring

Process control is important for two

In manufacturing, control is usually

Effective Control Systems

After Action Review

1. What was supposed to happen?

Improvement should be a proactive

Kaizen from Japan

• Flexibility – the ability to adapt quickly and

Stretch goals force an organization to

• Reengineering – the fundamental

Reengineering involves asking basic

Human Resource Development & Management

• Alignment with the Strategy

– Satisfaction, loyalty and commitment of customer possible only through satisfied,

• Exercise Traditional versus Total Quality Human Resource Paradigm (table)