PROCESS IMPROVEMENT

1. DCE5131 QUALITY IMPROVEMENT IN HUMAN RESOURCE DEVELOPMENT PROCESS IMPROVEMENT PREPARED BY: Assoc. Prof. Dr. Jegak Uli

2. OBJECTIVES 1. Process and process focused strategy 2. Process characteristics 3. Concepts of process management 4. Six ingredients that are essential for managing any type of process 5. Identify and manage key processes 6. Strategies for process improvement? 7. Flow chart

3. INTRODUCTION • An input-output phenomenon • Input = resources; output = products & by products Figure 1: Fundamental Product Process Relationship

4. WORK PROCES • A process is defined as the sequential integration of people, materials, methods, and machine in an environment to produce added outputs for customers. A process convert measurable inputs into measurable outputs through an organized sequence of steps. Four group or people are involved in the operation and improvement of processes (Tenner and DeToro, 1994): • Customers – the people for whom the output is being produced • Work group – the people who work in the process to produce and deliver the desired output • Supplier – the people who provide input to the work process • Owner – the person who is responsible for the operation of the process and for its improvement

5. INTRODUCTION • Two general types of strategies exist for creating products that meet or exceed customer needs and expectations: (1) process focused or (2) product focused. • Process focus : how we design and build our products (i.e., how we combine inputs and processes). • Product focus : what we design and build. • Concern and formulate strategies for both process and product.

6. PROCESS • PROCESS: A bound set of interrelated work activities, each having prescribed inputs and outputs. • Can be material, equipment, other tangible objects, or various kinds of information, are converted by a series of activities into an output provided to a recipient. • RECIPIENT: • -> can be either an external or internal customer. • -> An external customer is a person or organization that pays for the service or products received. An internal customer can be a department, a group (in case of an internal operation), or some other processing equipment and machinery. • -> can be a location where the process's outputs are stored for future use (e.g, a warehouse).

7. PROCESS Figure 2: A simple process • Processes typically cut across functional boundaries in an organization • This simplified definition of a process needs expansion

8. CROSS FUNCTIONAL PROCESS • ENGINEERING • MANUFACTURING New Product Development

9. PROCESS • According to Melan (1993), a process can be defined by its four key functions: • 1. Endpoints • 2. Transformations • 3. Feedback • 4. Repeatability • 1.Endpoints • defined as its inputs and outputs. • endpoints categories: • a. Inputs • b. Outputs • c. Customers • d. Catalyst event

10. PROCESS INPUTS • can be equipment, materials, methods, or the environment. OUTPUTS • products or services. CUSTOMERS • users of the products or services. • can be either internal or external to the organization. • the ultimate judges of the quality of the process outputs. • the primary customer is the most important customer for any product or service. CATALYST EVENT • can be classified as an input as well as an independent endpoint. • the single event that signals the beginning of the process. • it establishes the initial boundary of the process.

11. PROCESS • 2. Transformations • Can be classified into three categories. • Physical • Locational • Transactional • Physical transformation • changes some tangible item, such as raw or semi-finished material, into another state. E.g. act of melting down pellets and injecting the melted plastic into a mold. • Locational transformation • also changes physical items. • it changes the location of objects or materials and does not change the materials in any other physical manner. E.g.the movement of plastic pellets from the warehouse to the shop floor or the movement of the final product from the shop floor into the storage or shipping area.

12. PROCESS • Transactional transformation • involves the modification of nontangible items. • these items include the electronic movement of money in banks, the sales of stock by stockbrokers, or the assembly of marketing research data by advertisers. • the primary input item is information or data. • the transformation process could involve the modification of data.

13. PROCESS • 3. Feedback • involve communication and evaluation channels by which the transformation activities are modified, or corrected, to maintain the desired attributes of the output. • every process requires feedback to regulate its output. • feedback can take many forms. • it can occur as information from the output side of the process or from check - points inside the conversion processes. Feedback can also take the form of economic information, such as gross sales revenue, which is used to evaluate the operation.

14. PROCESS • Feedback ensures that the process is effective, efficient, and achieving its desired output. • Feedback can be divided into five categories. • a.Customer needs and expectations* • b. Specific customer targets* • c. The voice of the customer* • d. Specific process targets# • e. The voice of the process# • * involve information from the output of the process. • # involve information from within the process.

15. PROCESS • 4. Repeatability • a process is or can be executed regularly in the same manner with the same output. • Some processes are continuous, while others operate cyclically or intermittently. • The process of assembling cars on a production line is a continuous process. • Building custom cabinets for new houses is an intermittent process. • But, whether a process is continuous or intermittent, it must be repeatable.

16. PROCESS CHARACTERISTICS Whether a process involves transformations of a physical, locational, or transactional nature, it has 10 common characteristics. 1. Clearly defined ownership 2. Boundaries 3. Capacity 4. Documentation 5. Control points 6. Effectiveness 7. Efficiency 8. Adaptability 9. Measurements 10. Corrective action-An input-output phenomenon

17. PROCESS CHARACTERISTICS • 1. Clearly defined ownership • Traditionally, the ownership of physical and locational processes has been clear and explicit. • The process owner was the departmental manager. • Understood the organizational mission and the process's output & had personal responsibility and accountability for the process and its output. • The manager's performance was judged by quantifiable standards, such as cost, schedule, and quality. • Recently, process ownership has gradually shifted toward empowered work groups and self-directed work teams.

18. PROCESS CHARACTERISTICS • and in these teams, employees are assuming some traditional roles of management. • the basic ideas remain the same. • the process owner, whether an individual or a team, is responsible for yield, cost, quality, and schedule. • the process owner must manage the process to the targets set on this standard. • the process owner has the authority to change the process to maintain its desired outputs.

19. PROCESS CHARACTERISTICS • Boundaries • Boundaries are the beginning and end of a process. • Physical and locational processes have clearly defined boundaries. • The final output from and the input(s) required by these processes are clear and unambiguous. • However, the boundaries of transactional processes are harder to identify. • Further, output specifications for transactional processes may not truly reflect customer requirements, and input specifications may not achieve the desired output specifications with the existing processes.

20. PROCESS CHARACTERISTICS • A lack of understanding about the input specifications and the output specifications is common in many business processes. • But in a well-managed transactional process, specification problems are minimized through conscious effort aimed at classifying the work product as it proceeds from one operation to another. • Thus, the boundaries of a well-managed process are well-defined and controlled.

21. PROCESS CHARACTERISTICS • 3. Capacity • Capacity is the output rate of the process. • Capacity is usually expressed in terms of design, or theoretical, capacity and effective capacity. • Thus, design capacity is stated without consideration for such matters as equipment reliability, maintenance, or personnel factors such as learning curves, absenteeism, illness, and so on. • These considerations, when allowed for, enable effective capacity to be calculated.

22. PROCESS CHARACTERISTICS • 4. Documentation • A detailed record of work flow in processes. • Can be written in great detail, or it can be a collection of various bits of data. • Provides a permanent record of the physical transformation taking place in a production process. • Provides a reference point from which the repeatability of a process can be measured, and it provides a baseline from which any changes can be measured.

23. PROCESS CHARACTERISTICS • Serves as both a training and reference aid for the • personnel involved in the process. • Typical documents include process flowcharts, assembly drawings, and routings. • Process flowcharts graphically describe the sequence of operations in the process. • Assembly drawings show how a product is • constructed. • Routings describe operational steps that accompany the process flowchart.

24. PROCESS CHARACTERISTICS • 5. Control points • Regulate the quality of work or provide feedback. • Established to manage the natural variation that • occurs in physical processes. • 6. Effectiveness • It measures feedback against process goals. • Effectiveness is best assessed by measurement, • both internal and external. • External effectiveness measures must reflect • customer requirements. • Internal effectiveness measurements must reflect • both external and internal customer requirements. • It should proceed from the external boundary to the • starting boundary of the process.

25. PROCESS CHARACTERISTICS • Integrated flow diagrams that reflect established requirements are useful for measuring effectiveness. • Ineffectiveness is often easier to identify than effectiveness. • These are some symptoms that suggest an ineffective process. • - Customer complaints • - Inconsistent output quality • - Lack of awareness of output quality • - Absence of a corrective-action system • - Lack of interest in the customer • - Long response times in correcting problems

26. PROCESS CHARACTERISTICS • Efficiency • A measure of the output against the resources required to achieve that output. • It reflects how productive the internal operations are and how effectively resources are used in the process. • A traditional measure of efficiency is the ratio of output to the capacity of a process. • Inefficiency is easier to identify than efficiency. • These are some symptoms of inefficiency. • - Multiple off-line inspections • - Redundant, unnecessary, or nonvalue-added activities • - Corrective actions such as rework and reconciliation • - Supplier problems (e.g: poor quality or late deliveries) • - Excessive costs of value-added activities (E.g: high • production costs)

27. PROCESS CHARACTERISTICS • 8. Adaptability • The ability of the process to adjust to change - either technological or output changes. • A process responses to changing conditions such as output requirements, internal constraints, and input quality. • A process is adaptable if it can be changed to meet new requirements without significant modifications. • May require some work flow, personnel, and equipment changes when a process change is needed, but the process should remain largely intact. • Processes that lack adaptability tend to be limited in • nature [equipment capability (capacity, throughput, & cycle times) or human aspects (skills, flexibility, • resistance to change & other human factors)].

28. PROCESS CHARACTERISTICS • Measurements • A statistical basis for controlling the flow of work and managing variation @ provide a basis for feedback. • Continuous measurements are inherent in any well- managed process (meet specifications). • Process adapt to the natural variations that occur. • Relied only on end-of-line measurements, or final quality controls approach costly in terms of scrap and rework. • Statistical techniques e.g Pareto analysis and variation charts, are useful for managing repetitive operations. • Need to measure products against the requirements of the process without removing the product from the process.

29. PROCESS CHARACTERISTICS • 10. Corrective Action • The action required to correct for natural variation in a process. • Internal feedback from measurements at one or more control points identifies the need for corrective action before subquality products are produced. • This process is quickly adjusted to correct for the variations and the process’s effectiveness and efficiency do not suffer despite the natural variations. • Feedback and corrective action are the heart of prpocess control, without them the process loses its repeatability, quality and consistency.

30. ANOTHER VIEW • A process can also be categorized by its operatinonal environment: 2 categories of operating environment are manufacturing and service organizations. Both use the same three transformation types but service process have 5 features that distinguish them from manufacturing processes (Lowenthal, 1994): • i. Degree of customer contact – vary in degree of customer contact. Contact ranges from virtually none eg life insurance process to complete contact eg. Dental treatment. In contrast traditional manufacturing processes have little or no contact with customer. • ii. Intangibility – cannot be touch or felt by customer. • iii.Immediacy – the catalyst event of a service organization process occurs at the point of customer contact

31. ANOTHER VIEW • iv. Nonaccumulation – since service is an experience rather than a product, output from service processes cannot be accumulated or inventoried • v. Labor intensiveness – service processes are accomplished by a wide range of people, capital, and automation. Tend to be more labor intensive such as legal, retail hotel and hospital services.

32. PROCESS CHARACTERISTICS Table 1: Differences between service and manufacturing processes • Both manufacturing and service processes contain the • 10 characteristics outlined. • Thoroughness and attention paid to these 10 characteristics vary • depending on the environment.

33. PROCESS MANAGEMENT • Pall (1987) identifies six ingredients that are essential for process management: • Ownership: Assign responsibility for the design, • operation, and improvement of the process. • 2.Planning: Establish a structured and disciplined • approach to understand, define, and document all • major components in the process and their • interrelationships. • 3.Control: Assure effectiveness; all outputs are predictable • and consistent with the customers' expectations. • Measurement: Map performance attributes to customers'requirements, and establish criteria for the accuracy, • precision, and frequency of data acquisition. • 5. Improvement: Increase effectiveness of the process by • permanently embedding identified improvements. • 6. Optimization: Increase efficiency and productivity by • permanently embedding identified improvements.

34. PROCESS MANAGEMENT Table 2: Process Management Model (Tenner and De Torro, 1994)

35. PROCESS IMPROVEMENT • People involved in the operation and improvement of processes • Customers: the people (or person) for whom the • output (product or service) is being produced. The • people who will use the output directly or who will • take it as input into their work process. • 2. Work group: the people (or person) who work in the • process to produce and deliver the desired output. • 3. Supplier: the people (or person) who provide input to • the work process. The people in the process are in • fact the customers of the supplier. • 4. Owner: the person who is responsible for the • operation of the process and for its improvement.

36. PROCESS IMPROVEMENT IDENTIFYING KEY PROCESSES FOR IMPROVEMENT Six questions by Geary Rummler & Alan Brache (1988): • Which products and services are most important to the customers? • What are the processes that produce these products and services? • What are the key ingredients that stimulate action in the organization, and what are the processes that convert these stimuli to outputs? • Which processes have the highest visibility with customers? • Which processes have the greatest impact on customer-driven performance standards? • Which processes do performance data or common sense suggest have the greatest potential for improvement?

37. PROCESS IMPROVEMENT PROCESS IMPROVEMENT STRATEGIES Three different approaches for improving the efficiency or effectiveness of a process: • Continuous improvement -a ladder, step by step approach, also known as Kaizen. • Benchmarking - search for and emulate the best available practices and processes. • Reengineering - the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements

38. PROCESS IMPROVEMENT Process Improvement Strategies. Source: Adapted from T. McCabe, The Quality Network, 1993.

39. TECHNIQUES FOR PROCESS IMPROVEMENT Process Improvement Analysis Hierarchy

40. TECHNIQUES FOR PROCESS IMPROVEMENT 1. Elimination- eliminate non-value-added activities. Instead of totally eliminate, replace the functional essence of the activity with a superior technology. 2. Combination - combine activities in order to extract process improvement. 3. Change of sequence - examine the sequence to see if a reordering will provide improvement. 4. Simplification - examine activities with the expectation of improvement through simplifying the activities themselves. 5. Addition – If processes are clearly ineffective, need to add a process step; but additions are our last resort.

41. SIX STEPS TO PROCESS IMPROVEMENT Process Improvement Model

42. SIX STEPS TO PROCESS IMPROVEMENT Step 1: Define the problem 1. Identify the output. 2. Identify the customers. 3. Define the customers' requirements. 4. Identify the processes producing these outputs. 5. Identify the owner(s) of the processes

43. Defining the Problem in the context of the process - example

44. SIX STEPS TO PROCESS IMPROVEMENT Step 2: Identify and document the process Flowchart • commonly used tool for describing processes. • enables to perform four following improvement activities: • Identify the participants in the process, either by name, by position, or by organization. • Provide all participants in the process with a common understanding both of all steps in the process and of their individual roles. • Identify inefficient, wasteful, and redundant steps. • Offer a framework for defining process measurements.

45. SIX STEPS TO PROCESS IMPROVEMENT Step 3: Measure Performance The concepts of measuring performance at three level: process, output and outcome Process – define activities, variables and operations of the work process itself Output – define specific features, values and attribute of each product all service Outcome – define the ultimate impact of the process and are dependent on what the customer does with the product or service (customer satisfaction)

46. SIX STEPS TO PROCESS IMPROVEMENT Step 4: Understand Why • Offer methods to acquire the next level of knowledge and to gain profound understanding of the process “Never have so many” “worked so hard” “To accomplish so little” 1. Have we distinguished the vital few from the trivial many? 2. Have diagnosed the root cause? 3. Do we understand the sources of variation?

47. SIX STEPS TO PROCESS IMPROVEMENT Step 5: Develop and Test Ideas • Developing ideas for improvement begins with this step. • These steps led to identify causes of the principal problem. • Ideas for improvement must address the root causes of the problem before it can be implemented immensely in order to evaluate the effectiveness in solving the identified problems.

48. SIX STEPS TO PROCESS IMPROVEMENT Step 6:Implement Solutions and Evaluate • This sixth step begins by planning and implementing the improvements identified and verified in the step 5. • Step 6 continues to measure and evaluate the effectiveness of the improved process. • Finally, return to step 1 to begin the next increment in the ongoing process of continuous improvement.

49. SIX STEPS TO PROCESS IMPROVEMENT • Select and describe problem • Study present system • Identify possible causes 6. Standardize solution 7. Reflect on process anddevelop future plans PDCA ACTION PLAN • 4. Plan and implement solution • 5. Evaluate effects CHECK PDCA SEVEN-STEP METHOD DO

50. DEMING CYCLE DEMING CYCLE The Deming Cycle