Chapter 5 - Process Focus

After you read this chapter, you should be able to

 Define process as a sequence of linked activities that is to intended to achieve some result.
 Discuss the concept of process management which involves planning and administration
including design, control, and improvement.
 Define the value-creation processes
 Understand project management
 Explain the concept of continuous improvement
 Discuss the concepts of suppliers, supply chain management, and supplier certification

Core Values
“For I know the plans I have for you, declares the LORD, plans for welfare and not for evil, to give you a
future and a hope.” - Jeremiah 29:11

Learning Activities and resources

J.R. Evans, W.M. Lindsay. (2019). Total Quality Management. Cengage
DA Collier, J. Evans, W. Lindsay. (2020). Operations Management and Total Quality Management. Cengage

Introduction
The former President of Texas Instruments Defense Systems and Electronics Group (now part of
Raytheon) had a sign in his office that read: “Unless you change the process, why would you expect the
results to change?”. Deming and Juran observed that the overwhelming majority of quality problems are
associated with processes; few are caused by the workforce directly. Thus, it is vital to understand how
design, manage, and improve processes, and this responsibility belong to management.

What is Process?
A process is a sequence of linked activities that is intended to achieve some result.
Processes involve combinations of people, machines, tools, techniques, materials, and improvements in
a defined series of steps or actions.
Common types of production processes include:
 Machining
 Mixing
 Assembly
 Filling orders,
 Approving loans
However, nearly every major activity within the organization involves a process that crosses traditional
boundaries as illustrated in Figure below. For example, an order fulfilment process might involves 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 distribution and logistic personnel; invoicing by
finance; and illustrations by field service engineers. A process perspective links together all necessary
activities and increase one’s understanding of the entire system, rather that focusing on only a small part.
Many of the greatest opportunities for improving organizational performance lie in the organizational
interfaces – those spaces between the boxes on the organization chart.
 Process Versus Function

In this chapter, we focus on the importance of understanding and managing processes for quality.

Key Process Management Principles for Performance Excellence

 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, cycle time, 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, and 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 business processes, and identifying opportunities for improving quality and
operational performance, and ultimately, customer satisfaction.

Process Management Activities

Design
 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
 Maintaining consistency in output by assessing performance and taking corrective action when
necessary.
Improvement
 Continually seeking to achieve higher levels of performance in the process, such as reduced variation,
higher yields, fewer defects and errors, smaller cycle times, and so on.

Process Management and ISO 9000

 The entire set of standards is focused on an organization’s ability to understand, define,
document, and manage its processes.
 Organizations must plan and control the design and development of products and manage the
interfaces between different groups involved in design and development to ensure effective
communication and clear assignment of responsibility.
 The standards address a wide variety of process management activities, including control of
production and service, control of monitoring and measuring devices, and improvement of quality
management system effectiveness.

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 drive 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 the 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
identifying 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.
Types of Processes
 Value-creation processes – those most important to “running the business” and maintaining or
achieving a sustainable competitive advantage. They drive the creation of products and services, are
critical to customer satisfaction, and have a major impact on the strategic goals of an organization.
For example, Corning Telecommunications Products Division identified and documenter more that
800 processes in all areas of its business, of which 50 were designated as core business processes
that merit special emphasis. Each core process is owned and managed by a key business leader.
 Design processes – involve all activities that are performed to incorporate customer
requirements, new technology, and organizational knowledge into the functional specifications
of a manufactured goods or service.
 Production/delivery processes – those that create or deliver products, this process create or
deliver the actual product. Examples are manufacturing, assembly, dispensing medication,
teaching class and so on.
 Support processes – those most important to an organization’s value creation processes, employees,
and daily operations. Support process might include processes for finance and accounting, facilities
management, legal services, human resource service, public relations and other administrative
services. In an school system, for example, support process might include transportation, custodial,
central store, information technology and maintenance.

Projects as Processes
 In many companies, value-creation processes take the form of projects—temporary work
structures that start up, produce products or services, and then shut down.
 Project management involves all activities associated with planning, scheduling, and controlling
projects.

Process Requirements
 Value creation process requirements usually depend on consumer or external customer needs.
 Support process requirements are driven by internal customer needs and must be aligned with
the needs of key value-creation processes

Value Creation Processes for Pal’s Sudden Service

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 considerations include safety, cost, variability, productivity, environmental impact,
“green” manufacturing, measurement capability, and maintainability of equipment.

Process Mapping
Designing a Process requires systematic
approach. For most of the processes, this
includes defining the sequence of steps
that need to be performed, along with
formal documentation of procedures and
requirements. To describe specific steps
in a process and their sequence, we
generally develop Process map or
flowchart, along with standard operating
procedures and work instruction.
Example of A Process Map for Training
Printing Press Operator.

Service Process Design

Most cross-functional business value creation processes and all support processes are primarily service
oriented. Thus, it is important to understand the fundamental differences between manufacturing and
service process. First, the output of service processes are not as well defined, as are manufactured
products. For example, even thought banks offer similar tangible goods such as checking, loans,
automated teller, the real differentiating factor among banks is the service they provide. Second, most
service processes involve a greater interaction with the customer, often making it easier to identify needs
and expectations. On other hand, customer often cannot define their needs for service until after they
have some point of reference or comparison. Three basic components:
 Physical facilities, processes and procedures
 Employee behavior
 Employee professional judgment
Designing a service essentially involves determining an effective balance among all three of these.
A useful approach to designing services is to recognize that service differ in three dimensions:
1. Customer and contact and interactions,
2. Labor and intensity, and
3. Customization

Key Questions for Service Process Design

 What service standards are required to be met?
 What is the final result of the service to be provided?
 At what point does the service begin, and what signals its completion?
 What is the maximum waiting time that a customer will tolerate?
 How long should it take to perform the service?
 Who must the consumer deal with in completing the service?
 What components of the service are essential? Desirable? Superfluous?
 Which components can differ from one service encounter to another while still meeting
standards?

Design for Agility

As customer needs and expectations change, organizations must design processes that are increasingly
agile.
 Agility refers to flexibility and short cycle times.
 Flexibility refers to the ability to adapt quickly and effectively to changing requirements.
 Examples:
 rapid changeover from one product to another
 rapid response to changing demands
 the ability to produce a wide range of customized services
 Agility is crucial to such customer-focused strategies as mass customization.

Mistake-Proofing Processes
Human beings tend to make mistakes inadvertently. Typical mistakes in production are omitted steps in
a process, set-up errors, missing parts, wrong parts, or incorrect adjustments.
Typical reasons for mistakes and errors:
 Forgetfulness due to lack of reinforcement or guidance
 Misunderstanding or incorrect identification because of the lack of familiarity with process or
procedures
 Lack of experience
 Absentmindedness and lack of attention, especially when a process is automated
Blaming worker not only discourages them and lowers morale, but usually does not address the source of
the problems, which, as Deming and Juran often stated, is usually in the system.

Preventing Mistakes
 Designing potential defects and errors out of the process. This eliminates any possibility that the
error or defect will occur and will not result in rework, scrap, or wasted time.
 Identifying potential defects and errors and stopping a process before they occur. Often results in
some non-value-added time.
 Identifying defects and errors soon after they occur and quickly correcting the process. Results in
some scrap, rework, and wasted resources.
Good design can eliminate many defects and errors, but still cannot account for the human factor.
Poka-Yoke
It is an approach for mistake-proofing processes using automatic devices or simple methods to avoid
human error. Based on:
 Prediction, or recognizing that a defect is about to occur and providing a warning
 Detection, or recognizing that a defect has occurred and stopping the process.
Examples:
 Many machines have sensors that would be activated only if the part was placed in the correct
position.
 A device on a drill counts the number of holes drilled in a work piece; a buzzer sounds if the work
piece is removed before the correct number of holes has been drilled.
 Computer programs display a warning message if a file that has not been saved is to be closed.
 Passwords set for web accounts are entered twice.
 Orders for critical aircraft parts use pre-fit foam forms that only allow the correct part to be placed
in them, ensuring that the correct parts are shipped.
 Associates at Amazon sort products into bins that weigh them and compare the weight to the
order; if there is an inconsistency, the associate is prompted to verify the items.

Types of Service Errors

 Task errors include doing work incorrectly, work not requested, work on the wrong order, or
working too slowly.
 Treatment errors in the contact between the server and the customer, such as lack of courteous
behavior, and failure to acknowledge, listen, or react appropriately to the customer.
 Tangible errors, such as unclean facilities, dirty uniforms, inappropriate temperature, and
document errors.
 Customer errors in preparation such as the failure to bring necessary materials to the encounter,
to understand their role in the service transaction, and to engage the correct service.
 Customer errors during an encounter such as inattention, misunderstanding, or simply a memory
lapse, and include failure to remember steps in the process or to follow instructions.
 Customer errors at the resolution stage of a service encounter include failure to signal service
inadequacies, to learn from experience, to adjust expectations, and to execute appropriate post-
encounter actions.

Process Control
Control – the activity of ensuring conformance to requirements and taking corrective action when
necessary to correct problems and maintain stable performance. However, even a controlled process that
has to much variation can be detrimental to customer satisfaction and financial performance. For
example, research in the airline industry has shown that lack of service consistency (with respect to arrival
times) has a definite impact on customer dissatisfaction. Process consistency was found to be at least as
important as average performance for better-performing firms where customer expectations are high.
Process control is the responsibility of those who directly accomplish the work, such as machine operator,
order- fulfillment workers, and so on.
Elements of Control Systems
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, and
(4) the ability to make corrections as appropriate.
 Processes and Control Measures in the City of Coral Springs, FL

Process Control in Manufacturing

In manufacturing, Control is usually applied to incoming materials, key processes, and final products and
services. Control in manufacturing starts with purchasing and receiving processes.
Effective quality control systems include:
 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.

Process Control in Services

Example: The Ritz-Carlton Hotel Company
 Self-control of the individual employee based on their spontaneous and learned behavior.
 Basic control mechanisms, which are carried out by every member of the workforce. The first
person who detects a problem is empowered to break away from routine duties, investigate and
correct the problem immediately, document the incident, and then return to their routine.
 Critical success factor control for critical processes. Process teams use customer and
organizational requirement measurements to determine quality, speed, and cost performance.
These measurements are compared against benchmarks and customer satisfaction data to
determine corrective action and resource allocation. In addition, The Ritz-Carlton conducts both
self-audits and outside audits.
 Process Improvement

Deming’s View of a Production System

Continuous Improvement
Refers to both incremental changes, which are small and gradual, and breakthrough improvements, which
are large and rapid. Continuous improvement is important 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.
Many opportunities for improvement exist, the most obvious being reductions in manufacturing defects
or service errors. One example occurred at Dell. Although it has 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.27 Other
examples of improvements include 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, and improved responsiveness and cycle time performance for such processes as resolving
customer complaints or new product introduction. Organizations should also consider improving all
managerial practices such as leadership and strategic planning, which we will address in Part III of this
book.
Real improvement depends on Learning, which means understanding why changes are successful through
feedback between practices and results, leading to new goals and approaches. A learning cycle consists
of four stages:
1. Planning
2. Execution of plans
3. Assessment of progress
4. Revision of plans based upon assessment findings

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 Blitz
It is an intense and rapid improvement process in which a team or a department throws all its resources
into an improvement project over a short time period, as opposed to traditional kaizen applications, which
are performed on a part-time basis. Blitz teams are generally comprised of employees from all areas
involved in the process who understand it and can implement changes on the spot.

Breakthrough Improvement
Refers to discontinuous change, as opposed to the gradual, continuous improvement philosophy of
kaizen. Breakthrough improvements result from innovative and creative thinking; often these are
motivated by stretch goals, or breakthrough objectives. Example (Motorola): Improve product and
services quality ten times within two years, and at least 100-fold within four years.

Benchmarking
Benchmarking is defined as “measuring your performance against that of best-in-class companies,
determining how the best-in-class- achieve those performance level, and using the information as a basic
for your own company’s targets, strategies and implementation.” 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 or business results against competitors to
compare pricing, technical quality, features, and other quality or performance characteristics.
 Process benchmarking – identifying the most effective practices in key work processes in
organizations that perform similar functions, no matter in what industry.

Reengineering
Reengineering is 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. Reengineering involves asking basic questions about business processes:
 Why do we do it?
 Why is it done this way?
Managing Supply Chain Processes
 Suppliers include not only companies that provide materials and components, but also
distributors, transportation companies, and information, health care, and education providers.
 Many companies segment suppliers into categories based on their importance to the business
and manage them accordingly.

Supply Chain Management Principles

1. Recognizing the strategic importance of suppliers in accomplishing business objectives,
particularly minimizing the total cost of ownership,
2. Developing win-win relationships through long-term partnerships rather than as adversaries, and
3. Establishing trust through openness and honesty, thus leading to mutual advantages.

Supplier Certification
Supplier Certification is designed to rate and certify suppliers who provide quality materials in a cost-
effective and timely manner. For example, 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 processes can be time-consuming and expensive to administer. Using a uniform set
of standards such as ISO 9000 can reduce costs.

Summary
 Process focus in a factory; these processes might be departments devoted to welding, grinding, and
painting. In an office the processes might be accounts payable, sales, and payroll. In a restaurant, they might
be bar, grill, and bakery. The process focuses on low volume, high variety products are also called job shop.
These facilities are process focus in terms of equipment, layout, and supervision.
 Repetitive focus; falls between the product and process focus. The repetitive process is a product-oriented
production process that uses modules. Modules are parts or components of a product previously
manufactured or prepared, often in a continuous process. Fast-food firms are an example of repetitive
process using modules.
 Product focus are high volume, low variety processes; also called continuous processes. Products such as
light bulbs, rolls of paper, beer, and bolts are examples of product process. This type of facility requires a
high fixed cost, but low costs. The reward is high facility utilization.
 Mass customizations focus; is rapid, low-cost production that caters to constantly changing unique
customer desires. This process is not only about variety; it is about making precisely what the customer
wants when the customer wants it economically. Achieving mass customization is a challenge that requires
sophisticated operational capabilities.

Review questions:
1. Define process management and list the major activities involved in process management?
2. Differentiate between value-creation processes and support processes.
3. Why do organizations focus on improving the agility and flexibility of their processes?
4. Describe the various elements of a control system.
5. What is a supplier certification process? What is the purpose of this process?