Business Process

Unless you change the process, why would you expect the results to change
- President of Texas Instruments Defense
Systems and Electronic Group
Value-creation Processes
Also called Core Processes
Are 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.
Product Design - Involve all activities that are performed to incorporate customer
requirements, new technology, and organizational knowledge into the functional
specifications of the product.
Production Delivery - create or deliver the actual product.
Support Processes
Are those that are most important to an organizations 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.
Includes processes for finance and accounting, facilities management, legal services,
human resource services, public relations and other administrative services.
Project Management
Involves all activities associated with planning, scheduling and controlling projects.
Requires the coordination of many different department and functions.
In many companies, Value Creation Processes take the form of projects
The goal of process management is to achieve the highest level of process
performance.
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 Principles
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.
3 Important Activities of Process Management
Design Focuses on ensuring that the inputs to the process. (Defines the process)
Control Focuses on assessing whether the process performed as planned and the
process output is on target. (Measure the process)
Improvement Focuses on continually seeking to achieve higher levels of
performance in the process. (Improve the process)

Designing Work Process

Agility is a term that is commonly used to characterize flexibility and short cycle
times.
Flexibility refers to the ability to adapt quickly and effectively to changing
requirements.
Poka-yoke
Is an approach for mistake-proofing processes using automatic devices or methods to
avoid simple human error.
Concept was developed and refined in the early 1960s by Shigeo Shingo, a Japanese
manufacturing engineer who developed the Toyota production system.
KAIZEN
Japanese word that means gradual and orderly continuous improvement.
Encompasses all business activities and everyone in an organization.
Kaizen blitz
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.
Cycle time
Refers to the time it takes to accomplish one cycle of a process
DEMING CYCLE
Is a simple methodology for improvement that was strongly promoted by W. Edwards
Deming.
It was originally called the Shewhart Cycle after its original founder, Walter
It was known as the PDCA Cycle
BREAKTHROUGH IMPROVEMENT
Refers to discontinuous change
Result from innovative and creative thinking
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.
Two approaches for breakthrough improvement that help companies achieve
stretch goals are:
Benchmarking & Reengineering
BENCHMARKING
Benchmarking- is defined as measuring your performance against that of the best-in-class
companies, determining how the best-in-class achieve those performance levels, and using
the information as a basis for your own companys targets, strategies, and implementation
-or more simply, the search of industry best practices that lead to superior performance
The term best practices to 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.
3 Major types of Benchmarking have emerged in business:
1. Competitive benchmarking- involves studying products, process, 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.

2. Process benchmarking- it centers on key work processes such as distribution,

order entry, or employee training.
3. Strategic benchmarking- examines how companies compete and seek the winning
strategies that have led to competitive advantage and market success.
REENGINEERING
The process of reengineering has been defined as 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? and Why is it done this way?
Benchmarking can greatly assist reengineering efforts.