IA
L
ELEMENT
6
TE
R
PROCESS DESIGN
LEARNING OUTCOMES
On completion of this element, you should be
able to:
zz Understand process design and improvement.
Use a process flow diagram to illustrate the
––
stages of a process.
Describe the design and implementation of a
process applying the principles of the PDCA
cycle.
RR
C
SA
MP
L
E
MA
––
© RRC International CQI Unit 304 - Element 6: Process Design
| 6-1
IA
L
Contents
PROCESS DESIGN AND PROCESS FLOW DIAGRAMS
Process Design within an Organisation
Porter’s Value Chain
Process Mapping
Revision Questions
6-3
6-3
6-5
6-6
6-12
TE
R
PROCESS DESIGN AND THE PDCA CYCLE
Process Design Scenario
Revision Questions
6-13
6-13
6-15
RR
C
SA
MP
L
E
MA
SUMMARY6-16
6-2
| CQI Unit 304 - Element 6: Process Design
© RRC International
KEY INFORMATION
IA
L
Process Design and Process Flow Diagrams
• Process design is all about determining and organising the tasks required in executing a business process.
• In macro terms, there are three basic types of business process:
–– Management.
TE
R
–– Primary (or operational).
–– Secondary (or supporting processes).
• Michael Porter developed his value-chain model as a simplistic way for businesses to strategically examine their
macro business processes.
• Process mapping is used to provide an easy-to-follow picture of business micro processes by identifying all the
steps and decisions involved in a process.
–– Flowcharts.
–– Deployment charts.
MA
• The output from a process-mapping activity can take on many formats, but the two types of application
commonly used are:
In general terms, process design can be viewed as the
design of all the activities that are necessary to achieve the
successful transformation of materials, information, labour,
etc. into outputs such as products, services, reports, etc.
MP
L
E
Process design is an activity that can be performed at
either macro (functional) or, more commonly, micro
(operational) levels. We will consider both of these but our
main focus will be on micro process design.
PROCESS DESIGN WITHIN AN
ORGANISATION
In simple terms, the activity of process design is all about
determining and organising the tasks required in executing
a business process.
SA
Typically, the task of process design will use a number of
different tools and techniques. One of the most common
of those used for process design (or process evaluation) is
process flow diagrams.
The Process Concept
RR
C
In the preceding elements of this unit we have discussed
the concept of viewing business transformation activities
as a process. The diagram below is a simplified reminder of
this process.
© RRC International CQI Unit 304 - Element 6: Process Design
| 6-3
MA
TE
R
IA
L
Process Design and Process Flow Diagrams
E
The business transformation process
SA
MP
L
In practice, most businesses consist of multiple processes
interconnected in a value chain, this chain concluding with
the supply of goods and services to the end customer. As
such, the output of one process becomes the input to the
next process, as illustrated in the following diagram.
The business value chain
RR
C
This means that the ‘process owners’ along this value chain
can be perceived as both internal customers and suppliers
in the day-to-day activity of the business. The ‘flow’ of
value-adding activities can be visually mapped using a
technique referred to as ‘process mapping’ or ‘process
flowcharting’. This will be covered in more detail later in
this element.
6-4
| CQI Unit 304 - Element 6: Process Design
Types of Business Process
In general terms, we can define three basic types of
business process:
• Management processes, e.g. strategic management.
• Primary (or operational) processes - those that
constitute the core business and create the primary
value stream, e.g. production.
• Secondary (or supporting processes), e.g. IT.
© RRC International
Process Design and Process Flow Diagrams
MA
When designing business processes, the following key
points should be borne in mind:
• Such processes are designed to add value for
the customer and therefore should not include
unnecessary activities.
• The outcome of a well-designed business process is:
–– Increased effectiveness, i.e. value for the customer.
TE
R
We can view business processes in both a macro and a
micro format. For example, we can view the process of the
Purchasing Department in overall terms or we can break
down the purchasing activity into micro or sub-processes,
which have their own attributes, but also contribute to
achieving the goal of the Purchasing Department.
IA
L
All the above process types are necessary for the successful
provision of products and services. As such, the words
‘primary’ and ‘secondary’ should not be interpreted as one
type of process being more important than the other. For
example, could a business function survive without the
support of the IT Department?
–– Increased efficiency, i.e. less costs for the business.
PORTER’S VALUE CHAIN
RR
C
SA
MP
L
E
Michael Porter, a management guru, developed his
value-chain model as a simplistic way for businesses to
strategically examine their macro business processes,
these being categorised into primary (core) processes and
secondary (support) processes – see the diagram which
follows.
© RRC International Porter’s value-chain model
CQI Unit 304 - Element 6: Process Design
| 6-5
The model represents a value chain of activities with the
products and services passing through all the primary
activities of the chain in order, gaining some added value
from each activity. Importantly, the chain of primary
activities should give the products and services more
added value than the sum of added values of all activities.
In other words, the objective should be that the outcome
of these activities is to offer the customer a level of value
that exceeds the cost of the activities, thus resulting in a
profit margin.
PROCESS MAPPING
IA
L
Process Design and Process Flow Diagrams
Whereas Porter’s value chain created a macro picture
of business processes, process mapping focuses on
developing a micro picture of operational activities. It is
a technique for producing a visual representation of any
process activity.
• Operations.
• Eliminating unnecessary (or wasteful) tasks.
• Outbound Logistics.
• Clarifying roles within the process.
• Marketing and Sales.
• Reducing delays and duplication – particularly where
there are multiple processes involved.
• Service.
• Business Infrastructure.
• Human Resource Management.
• Technology.
• Agreeing common processes.
In visual terms, a process map identifies all the steps and
decisions involved in a process. It:
• Describes the flow of materials, information and
documents.
E
The secondary, or support, activities are the areas of the
organisation which are required to allow the organisation
to function, but do not always add value to the product or
service:
MA
Within Porter’s model we have the primary or core
business activities that primarily add value to the product
or service:
TE
R
• Inbound Logistics.
The initial task of process design, or process re-evaluation,
is to define the sequence of activities that are to be
undertaken during the transformation process that
converts inputs to outputs. The technique of process
mapping is the most commonly used technique to provide
an easy-to-follow picture of the process in question. This
process picture is particularly useful in assisting the design
of efficient transformation processes by, for example:
• Displays the various tasks contained within the process.
• Shows that the tasks transform inputs into outputs.
• Indicates the decision points within the overall process
activity.
MP
L
• Procurement.
Typical examples of support processes include:
• Accounting.
• Recruitment.
• Technical support.
SA
This macro approach to representing business processes is
particularly useful for strategically reviewing the business
operation. For example, if the operating profit of a business
is under pressure, the business may decide to focus on
what it does best and, as a consequence, outsource the IT
support activity, if this would be cost-effective.
The output from a process-mapping activity can take
on many formats, but there are two types of application
commonly used:
• Flowcharts – these provide a picture of all the activities
undertaken for the process(es) being investigated.
• Deployment charts – also provide a basic process
overview, but in addition indicate where or by whom
the actions are performed.
Here we will focus predominantly on producing flowcharts,
but deployment charts are also illustrated for information
purposes.
RR
C
More commonly, the review of processes at the micro level
is undertaken when designing and re-evaluating process
activities. The technique most commonly used for micro
process analysis is process mapping.
• Demonstrates the essential interrelationships and
interdependence between the process steps, and
reminds us that the strength of a chain depends on its
weakest link.
6-6
| CQI Unit 304 - Element 6: Process Design
© RRC International
Process Design and Process Flow Diagrams
Producing Flowcharts
Flowcharts have many different uses and can be
used to describe almost any process or procedure.
When a process (or procedure) is relatively complex,
a flowchart is often more suitable than a long
descriptive piece of text. Many people first come
across flowcharts in the form of computer program
design tools and many flowcharts use symbols that
come directly from the computing area.
Flowchart symbols
E
MA
The following diagram illustrates some of the
common flowchart symbols.
TE
R
TOPIC FOCUS
IA
L
As an example of a flowchart, let’s look at the chart that
would be generated by the simplified task of ‘getting to
work’. Using the symbols shown previously, this task can
be represented by the following flowchart.
Flowchart example: getting to work
Key points to note when constructing this flowchart are:
MP
L
Some companies may adopt their own flowcharting
symbols and methods for flowcharts. However, most
companies will use the standard symbols as defined
in the standard BS 4058:1987, ISO 5807:1985
Specification for data processing flowchart symbols,
rules and conventions.
Alternatively, flowcharting symbols can simply be
found in Microsoft Word (or equivalent) under
‘Shapes > Flowchart’.
SA
Each of the symbols used in a flowchart are linked by
arrows to display the process or procedure.
Flowchart Examples
• The first decision point is to ask the question, ‘Is it
raining?’ If it is raining, I will take the car, otherwise I
will cycle.
• The last symbol is always the termination symbol,
which designates the end of the flowchart or process.
The flowchart that this process generates is almost as
simple as a flowchart can be, but the general principle is
the same whether the chart has 5 or 500 symbols. Simple
charts are often most efficiently created by drawing by
hand, whereas more complex charts may require computer
assistance.
Using the same logic let us now apply the flowcharting
concept to a business process. In this scenario, imagine
you are running a virtual Web-based business that sells a
range of greetings cards. The next flowchart represents the
order-processing activity.
RR
C
It is often quite a complex task to sit down and condense a
familiar working procedure into a flowchart. Team working
is often an important aspect of creating realistic flowcharts.
As with many other techniques, the experience of sitting
down to complete a task which requires thinking about
everyday procedures often results in those procedures
being questioned and possibly improved. The flowchart
can help in this improvement, as it graphically displays the
task and, the more complex the task, the more complex
the chart. When the flowchart is simple, then the process
that it represents is simple too.
• The first symbol will be the Start.
© RRC International CQI Unit 304 - Element 6: Process Design
| 6-7
RR
C
SA
MP
L
E
MA
TE
R
IA
L
Process Design and Process Flow Diagrams
6-8
| CQI Unit 304 - Element 6: Process Design
Flowchart illustrating order-processing activity
© RRC International