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THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 1
Chapter 5
Process
Management
Dr. John V. Padua
The
Management
& Control of
Quality, 7e
Learning Objectives
At the end of the discussion, students are all expected
to understand the following:
 Definition of Process Management
 Types of Processes
 Design for Manufacturability, Quality and Social
Responsibility
 Process Control
 Importance of Process Improvement
 Benchmarking
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 2
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 3
Key Idea
Process management involves planning
and administering the activities necessary
to achieve a high level of performance in
key business processes, and identifying
opportunities for improving quality and
operational performance, and ultimately,
customer satisfaction.
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 4
Key Idea
Leading companies identify important
business processes throughout the value
chain that affect customer satisfaction.
These processes typically fall into two
categories: value-creation processes and
support processes.
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 5
Types of Processes
 Value-creation processes – those most
important to “running the business”
 Design processes – activities that develop
functional product specifications
 Production/delivery processes – those that
create or deliver products
 Support processes – those most important
to an organization’s value creation
processes, employees, and daily operations
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 6
Product Development Process
Idea
generation
Idea
generation
Concept
development
Concept
development
Product &
process design
Full-scale
production
Full-scale
production
Product
introduction
Product
introduction
Market
evaluation
Market
evaluation
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 7
Key Idea
Product design can significantly affect the
cost of manufacturing (direct and indirect
labor, materials, and overhead), redesign,
warranty, and field repair; the efficiency by
which the product can be manufactured,
and the quality of the output.
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 8
Design for Manufacturability
 DFM – the process of designing a
product for efficient production at the
highest level of quality
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 9
Key Idea
DFM is intended to prevent product
designs that simplify assembly operations
but require more complex and expensive
components, designs that simplify
component manufacture while
complicating the assembly process, and
designs that are simple and inexpensive
to produce but difficult or expensive to
service or support.
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 10
Design Quality and Social
Responsibility
 Product liability issues
 Environmental issues
 Design for Environment (DfE) - is the
explicit consideration of environmental
concerns during the design of products and
processes, and includes such practices as
designing for recyclability and disassembly.
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 11
Service Process Design
 Three basic components:
 Physical facilities, processes and
procedures
 Employee behavior
 Employee professional judgment
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 12
Key Idea
Service process designers must
concentrate on doing things right the first
time, minimizing process complexities,
and making the process immune to
inadvertent human errors, particularly
during customer interactions.
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 13
Process Control
 Control – the activity of ensuring
conformance to requirements and
taking corrective action when necessary
to correct problems and maintain stable
performance
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 14
Importance of Process
Improvement
 Customer loyalty is driven by delivered value.
 Delivered value is created by business
processes.
 Sustained success in competitive markets
requires a business to continuously improve
delivered value.
 To continuously improve value creation
ability, a business must continuously improve
its value creation processes.
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 15
Key Idea
Improvement should be a proactive task
of management and be viewed as an
opportunity, not simply as a reaction to
problems and competitive threats.
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 16
Kaizen
 Kaizen – a Japanese word that means
gradual and orderly continuous
improvement
 Focus on small, gradual, and frequent
improvements over the long term with
minimum financial investment, and
participation by everyone in the
organization.
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 17
Flexibility
 Flexibility – the ability to adapt quickly
and effectively to changing
requirements.
 rapid changeover from one product to
another,
 rapid response to changing demands,
 the ability to produce a wide range of
customized services.
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 18
Cycle Time
 Cycle time – the time it takes to
accomplish one cycle of a process
 Reductions in cycle time serve two
purposes
 First, they speed up work processes so
that customer response is improved.
 Second, reductions in cycle time can only
be accomplished by streamlining and
simplifying processes to eliminate non-
value-added steps such as rework.
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 19
Breakthrough Improvement
 Discontinuous change resulting from
innovative and creative thinking,
motivated by stretch goals, and
facilitated by benchmarking and
reengineering
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 20
Benchmarking
 Benchmarking – “the search of industry best
practices that lead to superior performance.”
 Best practices – approaches that produce
exceptional results, are usually innovative in
terms of the use of technology or human
resources, and are recognized by customers
or industry experts.
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 21
Types of Benchmarking
 Competitive benchmarking - studying
products, processes, or business
performance of competitors in the same
industry to compare pricing, technical quality,
features, and other quality or performance
characteristics of products and services.
 Process benchmarking – focus on key work
processes
 Strategic benchmarking – focus on how
companies compete and strategies that lead
to competitive advantage
THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 22
Reengineering
 Reengineering – the fundamental
rethinking and radical redesign of
business processes to achieve dramatic
improvements in critical, contemporary
measures of performance, such as cost,
quality, service, and speed.

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Chapter 5 Process Management

  • 1. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 1 Chapter 5 Process Management Dr. John V. Padua The Management & Control of Quality, 7e
  • 2. Learning Objectives At the end of the discussion, students are all expected to understand the following:  Definition of Process Management  Types of Processes  Design for Manufacturability, Quality and Social Responsibility  Process Control  Importance of Process Improvement  Benchmarking THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 2
  • 3. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 3 Key Idea Process management involves planning and administering the activities necessary to achieve a high level of performance in key business processes, and identifying opportunities for improving quality and operational performance, and ultimately, customer satisfaction.
  • 4. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 4 Key Idea Leading companies identify important business processes throughout the value chain that affect customer satisfaction. These processes typically fall into two categories: value-creation processes and support processes.
  • 5. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 5 Types of Processes  Value-creation processes – those most important to “running the business”  Design processes – activities that develop functional product specifications  Production/delivery processes – those that create or deliver products  Support processes – those most important to an organization’s value creation processes, employees, and daily operations
  • 6. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 6 Product Development Process Idea generation Idea generation Concept development Concept development Product & process design Full-scale production Full-scale production Product introduction Product introduction Market evaluation Market evaluation
  • 7. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 7 Key Idea Product design can significantly affect the cost of manufacturing (direct and indirect labor, materials, and overhead), redesign, warranty, and field repair; the efficiency by which the product can be manufactured, and the quality of the output.
  • 8. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 8 Design for Manufacturability  DFM – the process of designing a product for efficient production at the highest level of quality
  • 9. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 9 Key Idea DFM is intended to prevent product designs that simplify assembly operations but require more complex and expensive components, designs that simplify component manufacture while complicating the assembly process, and designs that are simple and inexpensive to produce but difficult or expensive to service or support.
  • 10. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 10 Design Quality and Social Responsibility  Product liability issues  Environmental issues  Design for Environment (DfE) - is the explicit consideration of environmental concerns during the design of products and processes, and includes such practices as designing for recyclability and disassembly.
  • 11. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 11 Service Process Design  Three basic components:  Physical facilities, processes and procedures  Employee behavior  Employee professional judgment
  • 12. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 12 Key Idea Service process designers must concentrate on doing things right the first time, minimizing process complexities, and making the process immune to inadvertent human errors, particularly during customer interactions.
  • 13. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 13 Process Control  Control – the activity of ensuring conformance to requirements and taking corrective action when necessary to correct problems and maintain stable performance
  • 14. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 14 Importance of Process Improvement  Customer loyalty is driven by delivered value.  Delivered value is created by business processes.  Sustained success in competitive markets requires a business to continuously improve delivered value.  To continuously improve value creation ability, a business must continuously improve its value creation processes.
  • 15. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 15 Key Idea Improvement should be a proactive task of management and be viewed as an opportunity, not simply as a reaction to problems and competitive threats.
  • 16. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 16 Kaizen  Kaizen – a Japanese word that means gradual and orderly continuous improvement  Focus on small, gradual, and frequent improvements over the long term with minimum financial investment, and participation by everyone in the organization.
  • 17. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 17 Flexibility  Flexibility – the ability to adapt quickly and effectively to changing requirements.  rapid changeover from one product to another,  rapid response to changing demands,  the ability to produce a wide range of customized services.
  • 18. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 18 Cycle Time  Cycle time – the time it takes to accomplish one cycle of a process  Reductions in cycle time serve two purposes  First, they speed up work processes so that customer response is improved.  Second, reductions in cycle time can only be accomplished by streamlining and simplifying processes to eliminate non- value-added steps such as rework.
  • 19. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 19 Breakthrough Improvement  Discontinuous change resulting from innovative and creative thinking, motivated by stretch goals, and facilitated by benchmarking and reengineering
  • 20. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 20 Benchmarking  Benchmarking – “the search of industry best practices that lead to superior performance.”  Best practices – approaches that produce exceptional results, are usually innovative in terms of the use of technology or human resources, and are recognized by customers or industry experts.
  • 21. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 21 Types of Benchmarking  Competitive benchmarking - studying products, processes, or business performance of competitors in the same industry to compare pricing, technical quality, features, and other quality or performance characteristics of products and services.  Process benchmarking – focus on key work processes  Strategic benchmarking – focus on how companies compete and strategies that lead to competitive advantage
  • 22. THE MANAGEMENT & CONTROL OF QUALITY, 7e, © 2008 Thomson Higher Education Publishing 22 Reengineering  Reengineering – the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed.