Designing, Controlling, and Improving Organizational Processes

 Involves
design, control, and improvement –
the key activities necessary to achieve a high
level of performance in key value creation
and support processes, and identifying
opportunities for improving quality and
operational performance, and ultimately,
customer satisfaction.
 Good
process management begins with good
process design.
 The design of the processes that produce and
deliver goods and services can have a
significant impact on cost, flexibility, and
 The design of a process begins with the
process owner.
Product and Service Design
factors in strategy
 Cost
 Quality
 Time-to-market
 Customer
 Competitive advantage
emphasis on our
attention to:
 Customer
 Reducing
time to introduce new
 Reducing
time to produce product
or service
 Increased
emphasis on our attention to:
 The
organization’s capabilities to produce
or deliver the item
 Environmental
 Designing
products & services that are
“user friendly”
 Designing
products that use less material
 Translate
customer wants and needs into
product and service requirements
 Refine existing products and services
 Develop new products and services
 Formulate quality goals
 Formulate cost targets
 Construct and test prototypes
 Document specifications
 Be
 Increase
business growth & profits
 Avoid
downsizing with development of new
 Improve
product quality
 Achieve
cost reductions in labor or materials
 Development
time and cost
 Product or service cost
 Resulting product or service quality
 Capability to produce or deliver a given product or
 Service
processes often involve both internal
and external activities, a factor that
complicates quality design.
 Services have three basic components:
Physical facilities, processes, and procedures
Employees’ behavior
Employees’ professional judgment.
 Control
is the activity of ensuring
conformance to the requirements and taking
corrective action when necessary to correct
problems and maintain stable performance.
 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.
 Any
process performance measure naturally
fluctuates around some average level.
Abnormal conditions cause an unusual
deviation form this pattern. Removing the
causes of such abnormal conditions and
maintaining level of performance is the
essence of control. Improvement means
changing the performance to a new level.
 To
be able to improve a process, it must be
repeatable and measurable.
 Repeatability means that the process must
recur over time.
 Continuous
improvement to provide quality
to customers is essential to total quality.
 Kaizen strategy is the cumulative effect of
hundreds or thousands of small
improvements that creates dramatic change
in performance.
Kaizen was created in Japan following World War II.
The word Kaizen means "continuous improvement". It
comes from the Chinese characters 改 ("kai") which
means "change" or "to correct" and 善 ("zen") which
means "good".
 Managers
need systematic approaches to
drive continuous improvement programs.
 Some organizations follow some standard and
popular approaches, while others develop
unique approaches to meet their own needs
and cultures.
 Focus
and pinpoint
 Communicate
 Translate and link
 Create a management action plan
 Improve processes
 Measure progress and provide feedback
 Reinforce behaviors and celebrate results
 Lean
production refers to approaches
initially developed by the Toyota Motor
Corporation that focus on the elimination of
waste in all forms including defects requiring
rework, unnecessary processing steps,
unnecessary movement of materials or
people, waiting time, excess inventory, and
 It involves identifying and eliminating nonvalue-added activities throughout the entire
value chain to achieve faster customer
response, reduced inventories, higher
quality, and better human resources.
The 5 S’s
Set in Order
Visual Controls
 Efficient Layout and Standardized Work
 Pull Production
 Total Productive Maintenance
 Source Inspection
 Continuous Improvement
 This
refers to discontinuous change, as
opposed to the gradual, continuous
improvement philosophy of kaizen.
 This results from innovative and creative
thinking; often these are motivated by
stretch goals, or breakthrough objectives.
 2 Approaches: Benchmarking and
 This
is the search for best practices that will
lead to superior performance.
 It helps a company learn its strengths and
weaknesses (as well as those of other
companies) and incorporate the best
practices into its own operations.
 2 major types: Competitive Benchmarking
and Generic Benchmarking
 Competitive
benchmarking usually focuses on
the products and manufacturing of a
company’s competitors.
 Generic benchmarking evaluates processes or
business functions against the best
companies, regardless of their industry.
 This
is focused on breakthrough improvement
to dramatically improve the quality and
speed of work and to reduce its cost of
fundamentally changing the processes by
which work gets done.
 Also known as Process Redesign.
 This is often used when the improvements
needed are so great that incremental
changes to operations will not get the job
done. The goal is to achieve quantum leaps
in performance.
Eliminate steps
Perform steps in parallel
rather than in sequence
Involve key people early
factors critical to the long-term success of
reengineering initiatives:
Breadth – extent to which the process maps onto
the dimensions of the business, from a single
activity in one function to spanning the entire
business unit.
Depth – how many of the depth levers (such as
structure, skills, IT systems, roles,
measurements/incentives, and shared values)
are manipulated