CHAPTER 5:

PROCESS FOCUS
Process - 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.
■ Generally, process involve combinations of people, machines, tools, techniques,
materials, and improvements in a defined series of steps or actions. We typically
think of processes 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 (products and services).
■ Common types of production processes include machining, mixing, assemble,
filling orders, or approving loans. However, nearly every major activity within an
organization involves a process that crosses traditional organizational
boundaries.
■ For example, an order fulfillment process might involve a salesperson placing the order;
a marketing representative entering it on the company’s computer system; a credit
check by finance; picking, packaging, and shipping by distribution and logistics
personnel; invoicing by finance; and installation by field service engineers.
■ A process perspective links together all necessary activities and increases one’s
understanding of the entire system, rather than focusing on only a small part.
Figure 5.1 Process Versus Function
CEO

Functional Focus
Vice President Vice President

Department Department Department Department Department

Manager Manager Manager Manager Manager

Process A
Process B
Process Focus

Process C

Process D

Process E
 Key Process-Focused Practices for Quality
Management
■ Identify vital work processes that relate to core competencies and deliver
customer value, profitability, organizational success, and sustainability
■ Determine key work process requirements incorporating input from
customers, suppliers, partners, and collaborators
■ 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
■ Seek ways to prevent defects, service errors, and rework and minimize
costs associated with inspections, tests, and process or performance
audits
■ 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
■ Improve work processes to achieve better performance, reduce
variability, improve products 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
■ Incorporate effective process management practices in the overall
supply chain
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. Process management consists of three major activities: design, control and
improvement.
■ 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
■ Control – focuses on maintaining consistency in output by assessing performance and
taking corrective action when necessary
■ Improvement – focuses on continually seeking to achieve higher levels of performance,
such as reduced variations, higher yields, fewer defects and errors, smaller cycle times, and
so on.
■ 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 it is delivered, or
the total time needed to introduce a new product)
- one of the most important metrics in process management
 Nearly every leading company views process management as a
fundamental business activity. AT&T, for example, identified the following
principles to guide their process management activities:
■ Process improvement focuses on the end-to-end process
■ The mind set of quality is one of prevention and continuous improvement
■ Everyone manages a process at some level and is simultaneously a
customer and a supplier
■ Customer needs derive process improvement
■ Corrective action focuses on removing the root cause of the problem
rather than on treating its symptoms
■ Process simplification reduces opportunities for errors and rework
■ Process improvement results from a disciplined and structured
application of quality management principles
Identifying Processes and Requirements

Nearly everything an organization does can be viewed as a

process. Common processes include acquiring customer and market
knowledge, strategic planning, research and development, purchasing,
developing new products or services, manufacturing and assembly,
fulfilling customer orders, managing information, measuring and
analyzing performance, and training employees, to name just a few.
Leading organizations identify important processes throughout the value
chain that affect their ability to deliver customer value. These processes
typically fall into two categories: value-creation processes and support
processes.
 Value-Creation Processes
■ According to AT&T, a process is how work creates value for customers.
■ Value-creation processes (sometimes called core processes) are those most important to
“running the business” and maintaining or achieving a sustainable competitive advantage.
■ Value-creation processes frequently align closely to an organization’s core competencies
and strategic objectives. They derive the creation of products and services, are critical to
customer satisfaction, and have a major impact on the strategic goals of an orgaization.
■ Value-creation process typically 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.
■ In many organizations, value-creation processes take the form of projects – temporary work
structures that start up, produce products or services and then shut down. Some
organizations focus exclusively on projects because of the nature of their work. They tend to
deliver unique, one-of-a-kind products or services tailored to the specific needs of an
individual customer.
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.
■ Support processes might include processes for finance and
accounting, facilities management, legal services, human resource
services, public relations, and other administrative services. In a
school system, for example, support processes might include
transportation, custodial, central stores, information technology, and
maintenance.
■ A process such as an order entry that might be thought of as a value-
creation process for one company (e.g. a direct mail distributor) may
be considered a support process for another (e.g. a custom
manufacturer).
Process Requirements
■ Understanding the requirements that processes should meet is vital to
designing them.
■ Given the diverse nature of value-creation processes, the requirements
and performance characteristics might vary significantly for different
processes.
■ In general, value-creation process requirements are driven by consumer or
external customer needs. For example, if hotel customers expect fast,
error-free check-in, then the check-in process must be designed for speed
and accuracy.
■ Support process requirements, on the other hand, are driven by internal
customer needs and must be aligned with the needs of key value-creation
processes. For example, 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.
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.
■ Process design begins with understanding its purpose and requirements, who the
customer is, and what outputs are produces.
■ Technology – an integral part of process design that makes today’s service and
manufacturing processes operate productively and meet customer needs better
than ever.
Process Mapping
■ Designing a process requires a systematic approach. For most processes, this
includes designing the sequence of steps that need to be performed, along with
formal documentation of procedures and requirements.
■ Process map – or flowchart, used to develop in order to describe the specific steps
in a process and their sequence
 Poka-yoke
(POH-kah YOH-kay)
An approach for mistake-proofing process using automatic
devise or simple methods to avoid human errors or remove
human element completely.

Two aspects are:

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.
Typical types of Service Errors
1. Task Errors – doing work incorrectly, like work on wrong order.
2. Treatment errors – arise in the contact between the server and customer, such as failure
to acknowledge or listen.
3. Tangible errors – those in physical elements of service, such as dirty uniforms or
document errors.
4. Customer errors in preparation – the failure to bring necessary materials to the
encounter.
5. Customer errors during an encounter – failure to remember steps or follow
instruction to the process.
6. Customer errors at the resolution stage of service – failure to signal inadequacies, to
learn from experience, to execute appropriate post-encounter actions.
 ■ Control is the activity of ensuring
conformance to the requirements and
Process Control taking corrective action when necessary to
correct problems and maintain stable
performance.
■ Process control is the responsibility of
those who directly accomplish the work
■ Control should be the foundation for
organizational learning
■ Any control system has four elements:
1. a standard or goal
2. a means of measuring
accomplishment
3. comparison of results with the
standard to provide feedback
4. The ability to make corrections as
appropriate
 Process Improvement
1. 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.
■ It is an important business strategy in competitive markets because:
■ 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

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
■ A philosophy of improvement.
■ It means gradual and orderly continues improvement.
■ Kaizen Institute, suggest some basic tips in implementing kaizen, such as
discarding conventional fixed ideas; thinking of how to do something; not
making excuses and seeking the “wisdom of ten people rather than the
acknowledge of one”.
 One example occurred at Dell. Although it had some of the highest
quality ratings in the PC industry, CEO Michael Dell became obsessed
with finding ways to reduce machine failure rates. He concluded that
failures were related to the number of times a hard drive was handled
during assembly, and insisted that the number of “touches” be reduced
from an existing level of more than 30 per drive. Production lines were
revamped and the number was reduced to fewer than 15. Soon after, the
reject rate of hard drives fell by 40 percent and the overall failure rated
dropped by 20 percent.
 One important area for improvement is reducing cycle time. Reductions in
cycle time served 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

■ This approach forces improvements in quality by reducing the potential for

mistakes and errors. By reducing non-value added steps, costs are reduced as
well.
■ Thus, cycle time reductions often drive simultaneous improvements in
organization, quality, cost and productivity. Significant reductions in cycle time
cannot be achieved simply by focusing on individual subprocesses; cross-
functional process must be examined all across the organization.
2. Breakthrough improvement – refers to discontinuous change, as opposed to
the gradual continuous improvement philosophy.

■ Breakthrough improvements result from innovative and creative thinking;

often these are motivated by stretch goals or breakthrough objectives.

■ Stretch goals – force an organization to think in a radically different

way and to encourage major improvements as well as incremental
ones. When a goal of 10 percent improvement is set, managers or
engineers can usually meet it with some minor improvements.
However, when the goal is 1,000 percent improvement, employees
must be creative and think “outside the box.”
■ For stretch goals to be successful, they must derive unambiguously
from corporate strategy. Organizations must not set goals that result
in unreasonable stress to employees or punish failure. In addition,
they must provide appropriate help and tools to accomplish the task.
 Two approaches for breakthrough improvement that help companies
achieve stretch goals are benchmarking and reengineering.

■ Benchmarking – 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” or more simply, “the search of industry best
practices that lead to superior performance”.
■ The term “best practices”refers to approaches that produce
exceptional results, are usually innovative in terms of the
use of technology or human resources, and are recognized
by customers and industry experts.
1. Competitive benchmarking – studying products or business
results against competitors to compare pricing, technical quality,
features and other quality or performance characteristics.
2. Process benchmarking – identifies the most effective practices in
key work processes in organizations that perform similar
functions, no matter in what industry.

■ Reengineering – is a systematic starting over and reinventing the

way a firm, or a business process, gets its work done.
- as defined by Michael Hammer and James Champy
(in their 1993 book ‘Reengineering The Corporation’) as
fundamental rethinking and radical redesign of business process to
achieve dramatic improvements in critical measures of performance
such as cost, service and speed.