Module 7
Process Management
1
Wisdom from Texas Instruments
“Unless you change the process, why would
you expect the results to change”
2
Scope of Process Management
• Process Management: planning and
administering the activities – design,
control, and improvement – necessary to
achieve a high level of performance
• Four types of key processes
– Design processes
– Production/delivery processes
– Support processes
– Supplier processes
3
Leading Practices (1 of 2)
• Translate customer requirements and internal
capabilities into product and service design
requirements early in the process
• Ensure that quality is built into products and services
and use appropriate tools during development
• Manage product development process to enhance
communication, reduce time, and ensure quality
• Define, document, and manage important
production/delivery and support processes
4
Leading Practices (2 of 2)
• Define performance requirements for suppliers and
ensure that they are met
• Control the quality and operational performance of
key processes and use systematic methods to
identify variations, determine root causes, and make
corrections
• Continuously improve processes to achieve better
quality, cycle time, and overall operational
performance
• Innovate to achieve breakthrough performance using
benchmarking and reengineering
5
Product Development Paradigms
Traditional Approach
• Design the product
• Make the product
• Sell the product
Testing, feedback
& redesign are
key!
Which sounds like?
Continuous Improvement!
•
•
•
•
•
Deming’s Approach
Design the product
Make it with
appropriate tests
Put it on the market
Conduct consumer
research
Redesign with
improvements
6
Product Development Process
Idea
generation
Concept
development
Product &
process design
Full-scale
production
Product
introduction
Market
evaluation
7
Quality Engineering
• System Design
– Functional performance
• Parameter Design
– Nominal dimensions
• Tolerance Design
– Tolerances
8
Loss Functions
Traditional
View
loss
no loss
loss
nominal
tolerance
Taguchi’s
View
loss
loss
Loss is progressive as variation increases.
9
Taguchi Loss Function Calculations
L(x) = k(x - T)2
Example: Specification = .500  .020
Failure outside of the tolerance range costs $50
to repair. Thus, 50 = k(.020)2. Solving for k
yields k = 125,000. The loss function is:
L(x) = 125,000(x - .500)2
Where:
L = Loss (in Dollars)
x = Quality characteristic (Diameter, concentration, etc.)
T = Target value for x
k = Constant
10
House of Quality
Interrelationships
Technical requirements
Voice of
the
customer
Customer
requirement
priorities
Relationship
matrix
Technical requirement
priorities
Competitive
evaluation
11
Quality Function Deployment
technical
requirements
component
characteristics
process
operations
quality plan
12
Motorola’s Approach
to Process Design
1.
2.
3.
4.
5.
6.
Identify the product or service
Identify the customer
Identify the supplier
Identify the process
Mistake-proof the process
Develop measurements and control, and
improvement goals.
13
Evaluating a Process
• Are steps arranged in logical sequence?
• Do all steps add value? Can some be eliminated or
added? Can some be combined? Should some be
reordered?
• Are capacities in balance?
• What skills, equipment, and tools are required at
each step?
• At which points might errors occur and how can they
be corrected?
• At which points should quality be measured?
• What procedures should employees follow where
customer interaction occurs?
14
Basic Components of Services
• Physical facilities, processes, and
procedures
• Employee behavior
• Employee professional
judgment
15
Key Service Dimensions
Customer contact and interaction
Labor intensity
Customization
16
Control
• The continuing process of evaluating process
performance and taking corrective action when
necessary
• Components of control systems
– Standard or goal
– Means of measuring accomplishment
– Comparison of results with the standard as a basis
for corrective action
A well-controlled system is predictable
17
After Action Review
1.
2.
3.
4.
What was supposed to happen?
What actually happened?
Why was there a difference?
What can we learn?
18
Supplier and Partnering Processes
• Recognize the strategic importance of
suppliers
• Develop win-win relationships through
partnerships
• Establish trust through openness and
honesty
19
Supplier Certification Systems
• “Certified supplier” – one that, after
extensive investigation, is found to
supply material of such quality that
routine testing on each lot received is
unnecessary
20
Benefits of Effective Supplier Process
Management
•
•
•
•
•
Reduced costs
Faster time to market
Increased access to technology
Reduced supplier risk
Improved quality
21
Process Improvement
• Productivity improvement
• Work simplification
• Planned methods change
•
•
•
•
Kaizen
Stretch goals
Benchmarking
Reengineering
Traditional
Industrial
Engineering
New approaches from
the total quality
movement
22
Stretch Goals
• "An organizational goal with an objective probability of
attainment that may be unknown but is seemingly impossible
given current capabilities.“ ~ Sim Sitkin
• Stretch goals are ambitious goals that challenge current
assumptions and processes, and inspire teams to re-imagine
what they previously thought possible. They differ from regular
goals because of this level of difficulty; stretch goals seem
impossible at the outset, while regular ones are perceived as
challenging but achievable.
23
Breakthrough Improvement
• Discontinuous change resulting from innovative
and creative thinking
• Benchmarking – the search of industry best
practices that lead to superior performance
– Competitive benchmarking
– Process benchmarking
– Strategic benchmarking
• Reengineering – radical redesign of processes
24
Information Management
• If you don’t measure results, you can’t tell
success from failure
• If you can’t see success, you can’t reward it –
and if you can’t reward success, you are
probably rewarding failure
• If you can’t recognize failure,
you can’t correct it
25
Process Flow
Measurement
Data
Analysis
Information
26
Use of Information and Analysis
Validation
Customer
Requirements
Prediction
Measurements
Control
Processes
Results
Design
Measurement supports executive performance review
and daily operations and decision making.
27
Benefits of
Information Management
• Understand customers and customer
satisfaction
• Provide feedback to workers
• Establish a basis for reward/recognition
• Assess progress and the need for corrective
action
• Reduce costs through better planning
28
Example: Federal Express
• “We measure everything.
Then…we prioritize what
processes are key to the
company.”
• Most data collection systems are
automated, making it fast and
easy.
• Seeks internal measures that are
predictors for external measures.
29
Example: Ritz-Carlton
• “We only measure what we must.
But, we make sure that what we
measure is important to our
customers.”
• 50% marketing and financial data;
50% quality-related productivity
data.
• Cost of quality is top priority. Are
improvements important to
customers, providing a good return,
and done quickly?
30
The Cost of Quality (COQ)
• COQ – the cost of avoiding poor quality,
or incurred as a result of poor quality
• Translates defects, errors, etc. into the
“language of management” – $$$
• Provides a basis for identifying
improvement opportunities and success
of improvement programs
31
Quality Cost Classification
•
•
•
•
Prevention
Appraisal
Internal failure
External failure
32
Return on Quality (ROQ)
• ROQ – measure of revenue gains against
costs associated with quality efforts
• Principles
– Quality is an investment
– Quality efforts must be made financially
accountable
– It is possible to spend too much on quality
– Not all quality expenditures are equally valid
33