TQM & Business Excellence QLTY620 PDF

TQM & Business Excellence QLTY620 Prof Assem Tharwat Adjuncit Professor Hamdan Bin Mohammed Smart Univeristy  Chapter 5 Week 6 - Session 1 Process Focus PI  Agenda Process Management Identifying Processes and Requirements Process...

TQM & Business Excellence QLTY620 Prof Assem Tharwat Adjuncit Professor Hamdan Bin Mohammed Smart Univeristy  Chapter 5 Week 6 - Session 1 Process Focus PI  Agenda Process Management Identifying Processes and Requirements Process Design Q&A and Discussions  Process Management A process is a sequence of linked activities that is intended to achieve some result, such as producing a good or service for a customer within or outside the organization. Generally, processes involve combinations of people, machines, tools, techniques, materials, and improvements in a defined series of steps or actions. We typically think of processes in the context of production: the collection of activities and operations involved in transforming inputs (physical facilities, materials, capital, equipment, people, and energy) into outputs (products and services). Common types of production processes include machining, mixing, assembly, filling orders, or approving loans.  Process Management Process versus Function An illustration depicts process versus function within an organizational setup. The functional focus shows a hierarchy of roles, with the C E O on top who manages several vice presidents. Each of the vice presidents have a number of department managers reporting to them. The process focus shows various processes like Process A through E which cross all traditional organizational boundaries, and involve teams and roles across various departments.  Process Management Key Process-Focused Practices for Quality Management Identify vital work processes that relate to core competencies and deliver customer value, profitability, organizational success, and sustainability. Determine key work process requirements, incorporating input from customers, suppliers, partners, and collaborators. Design and innovate work processes to meet all requirements, incorporating new technology, organizational knowledge, product excellence, the need for agility, cycle time reduction, productivity, cost control, and other efficiency and effectiveness factors.  Process Management Key Process-Focused Practices for Quality Management Seek ways to prevent defects, service errors, and rework and minimize costs associated with inspections, tests, and process or performance audits. Implement work processes and control their day-to-day operation to ensure that they meet design requirements, using appropriate performance measures along with customer, supplier, partner, and collaborator input as needed. Improve work processes to achieve better performance, reduce variability, improve products and services, keep processes current with business needs and directions, and share improvements with other organizational units and processes to drive organizational learning and innovation. Incorporate effective process management practices in the overall supply chain.  Process Management Process management involves planning and administering the activities necessary to achieve a high level of performance in key organizational processes, and identifying opportunities for improving quality and operational performance, and ultimately, customer satisfaction. Process management consists of three major activities: design, control, and improvement.  Design focuses on ensuring that the inputs to the process, such as materials, technology, work methods, and a trained workforce are adequate; and that the process can achieve its requirements.  Control focuses on maintaining consistency in output by assessing performance and taking corrective action when necessary.  Process Management  Improvement focuses on continually seeking to achieve higher levels of performance, such as reduced variation, higher yields, fewer defects and errors, smaller cycle times, and so on. Cycle time refers to the time it takes to accomplish one cycle of a process (e.g., the time from when a customer orders a product to the time that it is delivered, or the total time needed to introduce a new product). Cycle time is one of the most important metrics in process management. Individuals or groups, known as process owners, are accountable for process performance and have the authority to control and improve their process. Process owners may range from high-level executives who manage cross-functional processes to workers who run a manufacturing cell or an assembly operation on the shop floor.  Process Management Many aspects of ISO 9000 deal with process management activities. (In fact, the entire set of standards is focused on an organization’s ability to understand, define, document, and manage its processes.) To apply the techniques of process management, processes must be repeatable and measurable.  Repeatability means that the process must recur over time. The cycle may be long, as with product development processes or patent applications; or it may be short, as with a manufacturing operation or an order entry process.  Measurement provides the ability to capture important quality and performance indicators to reveal patterns about process performance. Meeting these two conditions ensures that sufficient data can be collected to reveal useful information for control and improvement.  Process Management Nearly every leading company views process management as a fundamental business activity. AT&T, for example, identified the following principles to guide their process management activities:  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 quality management principles.  Identifying Processes and Requirements Leading organizations identify important processes throughout the value chain that affect their ability to deliver customer value. These processes typically fall into two categories:  value-creation processes and  support processes/process requirements Value-Creation Processes Value-creation processes (sometimes called core processes) are those most important to “running the business” and maintaining or achieving a sustainable competitive advantage. Identifying Processes and Requirements  Identifying Processes and Requirements In many organizations, value-creation processes take the form of projects — temporary work structures that start up, produce products or services, and then shut down. Some organizations focus exclusively on projects because of the nature of their work. They tend to deliver unique, one-of-a-kind products or services tailored to the specific needs of an individual customer. Projects generally cut across organizational boundaries and require the coordination of many different departments and functions. Project management involves all activities associated with planning, scheduling, and controlling projects. Although every project is unique, many projects have similar underlying processes; thus, viewing them from a process management perspective can be beneficial.  Identifying Processes and Requirements Support Processes Support processes are those that are most important to an organization’s 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. Support processes might include processes for finance and accounting, facilities management, legal services, human resource services, public relations, and other administrative services. A process such as order entry that might be thought of as a value-creation process for one company (e.g., a direct mail distributor) may be considered a support process for another (e.g., a custom manufacturer).  Identifying Processes and Requirements Support Processes Processes can be broken down in a hierarchical fashion. At the top level, an organization must identify the major value-creation and support processes that require attention by senior managers. Each major process consists of many subprocesses that are managed by functional managers or cross-functional teams. Finally, each subprocess consists of many specific work steps performed by individuals at the performer level. As an example,  Identifying Processes and Requirements Process Requirements Given the diverse nature of value-creation processes, the requirements and performance characteristics might vary significantly for different processes. Value-creation process requirements are driven by consumer or external customer needs. For example, if hotel customers expect fast, error-free check-in, then the check-in process must be designed for speed and accuracy. Support process requirements, on the other hand, are driven by internal customer needs and must be aligned with the needs of key value-creation processes. For example, information technology processes at a hotel must support the check-in process requirements of speed and accuracy; this would require real-time information on room availability. Identifying Processes and Requirements Value-Creation Processes for Pal’s Sudden Service Identifying Processes and Requirements SSM Health Care Process Requirements and Measures  Process Design The goal of process design is to develop an efficient process that satisfies both internal and external customer requirements and is capable of achieving the requisite level of quality and performance. Other factors that might need to be considered in process design include safety, cost, variability, productivity, environmental impact, “green” manufacturing, measurement capability, and maintainability of equipment. Because processes generally cut across traditional organizational functions and rarely operate in isolation, process designs must be considered in relation to other processes that impact them.  Process Design Process design begins with understanding its purpose and requirements, who the customer is, and what outputs are produced. The purpose of a manufacturing process, for instance, is to produce a component or semifinished good for the next manufacturing process. Thus, process design usually starts with a detailed technical analysis of characteristics of the product, technological capabilities of machines and equipment, required operations sequences, assembly methods, and so on, which are often conducted by industrial or manufacturing engineers. The purpose of an order-taking process is to accurately identify in a friendly fashion what a customer wants. A process design might start by identifying ways that customers prefer to place orders and how long they are willing to wait, for example.  Process Design Process Mapping Designing a process requires a systematic approach. For most processes, this includes defining the sequence of steps that need to be performed, along with formal documentation of procedures and requirements. To describe the specific steps in a process and their sequence, we generally develop a process map or flowchart, along with standard operating procedures and work instructions. The following figure shows a flowchart for training printing press operators. The process defines the steps and decision points required to achieve certification, and ensures that all requirements are met.  Process Design A Process Map for Training Printing Press Operators The flow diagram shows processes and decisions moving in the following order: Process: Hire candidate Process: Training with operator checklist Process: Safety, quality, and procedures testing Decision: Test passed? If No: go back to training with operator checklist If Yes: Process: Four-week evaluation Process: Solo with lead support Process: 90-day evaluation If fail: Reevaluate employee, and go back to four-week evaluation If pass: Press- certified  Process Design “Backward Chaining” Technique Start with the outputs, or customer requirements, and move backward through the process to identify the key steps needed to produce each output; stop when the process reaches the supplier input stage. AT&T calls this technique “backward chaining.” AT&T suggests the following steps: Begin with the process output and ask, “What is the last essential subprocess that produces the output of the process?” For that subprocess, ask, “What input does it need to produce the process output?” For each input, test its value to ensure that it is required. For each input, identify its source. In many cases, the input will be the output of the previous subprocess. In some cases, the input may come from external suppliers. Continue backward, one subprocess at a time, until each input comes from an external supplier.  Process Design After a flowchart is developed, several fundamental questions can be asked to analyze the process and create a more effective design: Are the steps in the process arranged in logical sequence? Do all steps add value? Can some steps be eliminated and should others be added in order to improve quality or operational performance? Can some be combined? Should some be reordered? Are capacities of each step in balance; that is, do bottlenecks exist for which customers will incur excessive waiting time? What skills, equipment, and tools are required at each step of the process? Should some steps be automated? At which points in the system might errors occur that would result in customer dissatisfaction, and how might these errors be corrected? At which point or points should quality be measured? Where interaction with the customer occurs, what procedures and guidelines should employees follow to present a positive image?  Process Design For example, to determine if a process step has value, more detailed questions may be asked, such as: Would the customer notice a loss of value if this step were eliminated? Would the product or service be obviously incomplete without this step? If you were forced to complete the product or service on an emergency basis, is this step too important to skip? If you owned the business and could pocket the savings from skipping this step, would you include it? If the step is a review or inspection, is the reject rate significant? Are the consequences of an error at this step significant? If any of these answers is no, then the value of the step is suspect and should be investigated more thoroughly.  Process Design Process Design for Services It is important to understand the fundamental differences between manufacturing and service processes. First, the outputs of service processes are not as well defined, as are manufactured products. For example, even though all banks offer similar tangible goods such as checking, loans, automated tellers, and so forth, the real differentiating factor among banks is the service they provide. Second, most service processes involve a greater interaction with the customer, often making it easier to identify needs and expectations. On the other hand, customers often cannot define their needs for service until after they have some point of reference or comparison. Service processes often involve both people and technology, thus, both employee behavior and supporting processes and technology must be considered in service design. Designing a service essentially involves determining an effective balance between people and technology. Too much or too little emphasis on one component will lead to poor quality or inefficiency.  Process Design Process Design for Services The five key service dimensions that we introduced in Chapter 3—reliability, assurance, tangibles, empathy, and responsiveness—provide a basis for designing quality into services. For instance, tangibles and reliability are key aspects of technology; assurance, empathy, and responsiveness relate to employee behavior. A useful approach to designing services is to recognize that services differ in three dimensions: customer contact and interaction, labor intensity, and customization. For example, a railroad is low in all three dimensions. On the other hand, an interior design service would be high in all three dimensions. A typical fast-food restaurant would be medium in customer contact, high in labor intensity, and low to medium in customization.  Process Design Process Design for Services Services low in all three dimensions of this classification are more similar to manufacturing organizations. The emphasis on quality should be focused on technology. As contact and interaction between the customer and the service system increases, the behavior of employees becomes more important. The process design might have to include information to help customers understand and follow the sequence of process steps. Such service processes also require guidance to the providers of those services on handling contingencies related to the possible actions or behaviors of customers that cannot always be predicted.  Process Design Process Design for Services In designing service processes, the following questions should be considered: What service standards are required to be met? What is the final result of the service to be provided? At what point does the service begin, and what signals its completion? What is the maximum waiting time that a customer will tolerate? How long should it take to perform the service? Who must the consumer deal with in completing the service? What components of the service are essential? Desirable? Superfluous? Which components can differ from one service encounter to another while still meeting standards?  Process Design Design for Agility As customer needs and expectations change, organizations must design processes that are increasingly agile. Agility is a term that is commonly used to characterize flexibility and short cycle times. Electronic commerce, for instance, requires more rapid, flexible, and customized responses than traditional market outlets. Flexibility refers to the ability to adapt quickly and effectively to changing requirements. It might mean rapid changeover from one product to another, rapid response to changing demands, or the ability to produce a wide range of customized services. Flexibility might demand special strategies such as modular designs, sharing components, sharing manufacturing lines, and specialized training for employees. It also involves outsourcing decisions, agreements with key suppliers, and innovative partnering arrangements. Enablers of agility include close relationships with customers to understand their emerging needs and requirements, empowering employees as decision makers, effective manufacturing and information technology, close supplier and partner relationships, and breakthrough improvement.  Process Design Mistake-Proofing Processes Typical mistakes in production are omitted steps in a process, setup errors, missing parts, wrong parts, or incorrect adjustments. Such errors can arise from the following factors: Forgetfulness due to lack of reinforcement or guidance Misunderstanding or incorrect identification because of the lack of familiarity with a process or procedures Lack of experience Absentmindedness and lack of attention, especially when a process is automated Blaming workers not only discourages them and lowers morale, but usually does not address the source of the problems, which, as Deming and Juran often stated, is usually in the system.  Process Design Mistake-Proofing Processes Preventing mistakes can be done in three ways: Designing potential defects and errors out of the process. Clearly, this approach is the best because it eliminates any possibility that the error or defect will occur and will not result in rework, scrap, or wasted time. Expecting errors before happening Identifying potential defects and errors and stopping a process before they occur. Although this approach prevents defects and errors, it does result in some non-value- added time. Stop before happening Identifying defects and errors soon after they occur and quickly correcting the process. This can avoid large amounts of costly defects and errors in the future, but does result in some scrap, rework, and wasted resources. Good design can eliminate many defects and errors, but still cannot account for the human factor.  Process Design Mistake-Proofing Processes Poka-yoke (POH-kah YOH-kay) is an approach for mistake-proofing processes using automatic devices or simple methods to avoid human error. Poka-yoke is focused on two aspects: (1) prediction, or recognizing that a defect is about to occur and providing a warning, Proactive approach (2) detection, or recognizing that a defect has occurred and stopping the process. Reactive approach The poka-yoke concept was developed and refined in the early 1960s by the late Shigeo Shingo, a Japanese manufacturing engineer who developed the Toyota production system. Shingo visited a plant and observed that the plant was not using any type of measurement or statistical process control system for tracking defects.  Process Design Mistake-Proofing Processes When asked why?, the manager replied that they did not make any defects to track! His investigation led to the development of a mistake-proofing approach called Zero Quality Control, or ZQC. ZQC is driven by simple and inexpensive inspection processes, such as successive checking,  in which operators inspect the work of the prior operation before continuing, and self-checking, in which operators assess the quality of their own work. Poka-yokes are designed to facilitate this process or remove the human element completely.  Process Design Mistake-Proofing Processes Many applications of poka-yoke are deceptively simple, inexpensive to implement, and are often quite creative. Poka-yoke is a good way of engaging workers in continuous improvement activities. One of Shingo’s first poka-yoke devices involved a process at the Yamada Electric plant in which workers assemble a switch having two push buttons supported by two springs. Occasionally, the worker would forget to insert a spring under each button, which led to a costly and embarrassing repair at the customer’s facility. In the old method, the worker would take two springs out of a large parts box and then assemble the switch.  Process Design Mistake-Proofing Processes To prevent this mistake, the worker was instructed first to place two springs in a small dish in front of the parts box, and then assemble the switch. If a spring remains in the dish, the operator knows immediately that an error has occurred. The solution was simple, inexpensive, and provided immediate feedback to the operator. Some other examples can be cited: Many machines have sensors that would be activated only if the part was placed in the correct position.  Process Design Mistake-Proofing Processes Some other examples can be cited: A device on a drill counts the number of holes drilled in a work piece; a buzzer sounds if the work piece is removed before the correct number of holes has been drilled. Computer programs display a warning message if a file that has not been saved is to be closed. Passwords set for web accounts are entered twice. Orders for critical aircraft parts use pre-fit foam forms that only allow the correct part to be placed in them, ensuring that the correct parts are shipped. Associates at Amazon sort products into bins that weigh them and compare the weight to the order; if there is an inconsistency, the associate is prompted to verify the items.  Process Design Mistake-Proofing Processes The following list summarizes the typical types of service errors and related poka- yokes. Task errors include doing work incorrectly, work not requested, work on the wrong order, or working too slowly. Some examples of poka-yoke devices for task errors are computer prompts, color-coded cash register keys, measuring tools such as a French-fry scoop, and signaling devices. Hospitals use trays for surgical instruments that have indentations for each instrument, preventing the surgeon from leaving one of them in the patient. Treatment errors arise in the contact between the server and the customer, such as lack of courteous behavior, and failure to acknowledge, listen, or react appropriately to the customer. A bank encourages eye contact by requiring tellers to record the customer’s eye color on a checklist as they start the transaction. To promote friendliness at a fast-food restaurant, trainers provide the four specific cues for when to smile: when greeting the customer, when taking the order, when telling about the dessert special, and when giving the customer change.  Process Design Mistake-Proofing Processes The following list summarizes the typical types of service errors and related poka- yokes. Tangible errors are those in physical elements of the service, such as unclean facilities, dirty uniforms, inappropriate temperature, and document errors. Hotels wrap paper strips around towels to help the housekeeping staff identify clean linen and show which ones should be replaced. Spell-checkers in word processing software help reduce document misspellings (provided they are used!). Customer errors in preparation include the failure to bring necessary materials to the encounter, to understand their role in the service transaction, and to engage the correct service. A computer manufacturer provides a flowchart to specify how to place a service call. By guiding the customers through three yes-or-no questions, the flowchart prompts them to have the necessary information before calling.  Process Design Mistake-Proofing Processes The following list summarizes the typical types of service errors and related poka- yokes. Customer errors during an encounter can be due to inattention, misunderstanding, or simply a memory lapse, and include failure to remember steps in the process or to follow instructions. Poka-yoke examples include height bars at amusement rides that indicate rider size requirements, beepers that signal customers to remove cards from ATM machines, and locks on airplane lavatory doors that must be closed to turn on the lights. Some cashiers at restaurants fold back the top edge of credit card receipts, holding together the restaurant’s copies while revealing the customer’s copy. Customer errors at the resolution stage of a service encounter include failure to signal service inadequacies, to learn from experience, to adjust expectations, and to execute appropriate post-encounter actions. Hotels might enclose a small gift certificate to encourage guests to provide feedback. Strategically placed tray-return stands and trash receptacles remind customers to return trays in fast-food facilities.