1. Chapter 3 – The Process Approach 1 Process Approach Auditing 28-Oct-2009 VARIATION RISK PERFORMANCE WASTE PROCESS MEASUREMENT AND OBJECTIVE DEPLOYMENT

2. Chapter 3 – The Process Approach 2 Process Approach Auditing 28-Oct-2009 Process Monitoring and Measurement

3. Chapter 3 – The Process Approach 3 Process Approach Auditing 28-Oct-2009 Processes must be monitored and measured - Measurement categories that need to be considered are: Quality: Does the process consistently produce desired outputs? Delivery: Does the process consistently deliver the outputs on time? Efficiency: Does the process produce and deliver the outputs using the least amount of resources necessary Others?: such as Safety, Regulatory Compliance, etc. Too often only one of these categories is applied and that misleads management into thinking that everything is alright.

4. Chapter 3 – The Process Approach 4 Process Approach Auditing 28-Oct-2009 Manufacturing processes are almost always held accountable for ALL measurement categories (quality, delivery, efficiency). Why are many Management and Support processes not held to the same standard of transparent accountability?

5. Chapter 3 – The Process Approach 5 Process Approach Auditing 28-Oct-2009 How does a company implement their BUSINESS PLAN? The process approach is one of the best methods to implement a business plan

6. Chapter 3 – The Process Approach 6 Process Approach Auditing 28-Oct-2009 Policy Management System (Business) Objectives Process Objectives Project / Product / Sub-process / Individual Objectives Top Management Process Owners All Employees Top Management Effective Planning and Communication Effective policy deployment through measurement is required by all ISO 9001 based standards.

7. Chapter 3 – The Process Approach 7 Process Approach Auditing 28-Oct-2009 OTD Order Review Process Warehouse Process/ Inventory Management Maintenance Process Purchasing Process Production Planning & Scheduling Process In order to achieve any improvement in OTD you must first collect and analyze appropriate data in order to understand the primary causes of late deliveries and establish realistic improvement goals. Metrics, improvement objectives, plans and resource needs will then be identified and communicated throughout the organization. By engaging the entire organization in this process and using the PDCA cycle you will ultimately achieve your OTD goals and increased customer satisfaction and organizational efficiency.

8. Chapter 3 – The Process Approach 8 Process Approach Auditing 28-Oct-2009 Quality Policy – Defect free product, on time to the customer at a reasonable price and continually improving all processes in accordance with the requirements. Business Plan Objective – 98% on time to customer promise date Process Objectives established to meet business goal Order review processes – all orders processed within 2 days of receipt Warehouse process – 100% compliance with FIFO, 18 inventory turns Maintenance Process – 97% uptime, no past due scheduled items Purchasing process – 95% of tier 1 suppliers on time and within window Production Scheduling – all shop routers completed within 1 day of receipt and all orders scheduled to be completed 2 days prior to required ship date Progress towards objectives will be posted monthly and discussed at the quarterly management review meeting in addition to the bi-weekly production meeting.

9. Chapter 3 – The Process Approach 9 Process Approach Auditing 28-Oct-2009 LetterMajor TermsMinor Terms S Specific M Measurable A Achievable Agreed, Attainable, Assignable, Appropriate, Actionable R Realistic Relevant, Results-focused, Results-oriented, Resourced T Timely Timed, Time-based, Time-bound, Time-Specific E Exciting, Evaluated R Recorded, Rewarding, Reviewed SMART GOALS

10. Chapter 3 – The Process Approach 10 Process Approach Auditing 28-Oct-2009 Consider the potential value of an annual audit of each business process solely focussed on the deployment of the business plan?

11. Chapter 3 – The Process Approach 11 Process Approach Auditing 28-Oct-2009 MANAGEMENT COMMUNICATION AND EMPLOYEE AWARENESS

12. Chapter 3 – The Process Approach 12 Process Approach Auditing 28-Oct-2009 Imagine the power of an organization that has truly achieved Unity of Purpose?

13. Chapter 3 – The Process Approach 13 Process Approach Auditing 28-Oct-2009 Is this enough information to ensure that everyone clearly understands what must be done to achieve the improvement goal?

14. Chapter 3 – The Process Approach 14 Process Approach Auditing 28-Oct-2009 Too often management only communicates partial information. To understand the complete path to improvement everyone needs to know the following: Where are we now (measure) and where do we want to be (goal)? Why are we here (causes of failure)? What are we doing to improve (plan)? How am I personally involved?

15. Chapter 3 – The Process Approach 15 Process Approach Auditing 28-Oct-2009 TasksResp.Due% ContributionStatus Increase PM frequencies on key machines Joe K.2/23/085075% complete, Need more resources Increase buffer inventories of critical parts Janice Q. 4/1/083050% complete, no issues Plan for Improvement TasksResp.Due% ContributionStatus Increase PM frequencies on key machines Joe K.2/23/085075% complete, Need more resources Increase buffer inventories of critical parts Janice Q. 4/1/083050% complete, no issues Plan for Improvement

16. Chapter 3 – The Process Approach 16 Process Approach Auditing 28-Oct-2009 EFFECTIVE Communication Too often management only communicates in one way (think - quarterly all employee meeting) Does this communication effectively reach everyone (think - kids in the back of the room)? To truly achieve unity of purpose shouldn’t there be multiple communication methods happening all the time? Will management have to adjust their communication methods and frequencies or do they normally achieve perfection on the first try? Can management communication be considered a process with clear outputs (employee understanding, satisfaction, unity of purpose, etc.) and measures?