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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

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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.

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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 organizations value creation processes, employees, and daily operations

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Control vs. Improvement


Out-of-control Controlled process

Improvement

New zone of control Time


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Product Design Process


Benchmarked Process
Idea generation Preliminary Concept Development Product/Process Development Full-Scale production Market introduction Market evaluation

CONCEPTUALIZATION

CONVERSION

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

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Product Development Process


Idea generation Concept development Product & process design Full-scale production Product introduction Market evaluation
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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.

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Design for Manufacturability


DFM the process of designing a product for efficient production at the highest level of quality

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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.

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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.

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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
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Designing Processes for Quality


1. 2. 3.
4. 5.

6.

Identify the product or service: What work do I do? Identify the customer: Who is the work for? Identify the supplier: What do I need and from whom do I get it? Identify the process: What steps or tasks are performed? What are the inputs and outputs for each step? 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? Develop measurements and controls, and improvement goals: How do I evaluate the process? How can I improve further?

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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

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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

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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.

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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.

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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.

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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

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Supplier Partnerships
Jurans Trend in Supplier Relationships
Element No. of suppliers Duration of suppliers Quality Criteria Emphasis on Surveys Quality Planning Pattern of Partnership Traditional/Adversarial Multiple/Many Annual Contracts Conformance to Specifications Procedures, Data & systems Separate Arms Length Secrecy Mutual Supervision TQM- Teamwork Focus Few/Often Single 3yrs. or more Total Alignment Fit for use Process Capability Joint Certification Mutual Visits Disclosures & Transparency Mutual Assistance

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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

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Service Process Design


Three basic components:
Physical facilities, processes and procedures Employee behavior Employee professional judgment

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Key Service Dimensions


Customer contact and interaction

Labor intensity
Customization
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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.

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Process Control
Control the activity of ensuring conformance to requirements and taking corrective action when necessary to correct problems and maintain stable performance

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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.

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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.

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Key Idea
In manufacturing, control is usually applied to incoming materials, key processes, and final products and services.

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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.

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After Action Review


1. 2. 3. 4. What was supposed to happen? What actually happened? Why was there a difference? What can we learn?

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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.

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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.

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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.

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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.

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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 nonvalue-added steps such as rework.

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Breakthrough Improvement
Discontinuous change resulting from innovative and creative thinking, motivated by stretch goals, and facilitated by benchmarking and reengineering

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Key Idea
Stretch goals force an organization to think in a radically different way, and to encourage major improvements as well as incremental ones.

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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.

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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

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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.

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Key Idea

Reengineering involves asking basic questions about business processes: Why do we do it? and Why is it done this way?