Chapter 7 Process Management

Wisdom from Texas Instruments “Unless you change the process, why would you expect the results to change”

Scope of Process Management Process Management: planning and administering the activities – design, control, and improvement – necessary to achieve a high level of performance Four types of key processes Design processes Production/delivery processes Support processes Supplier processes

Management Principles AT&T Process Management Principles Focus on end-to-end process Mindset of prevention and continuous improvement Everyone manages a process at some level and is a customer and a supplier Customer needs drive the process Corrective action focuses on root cause Process simplification reduces errors

Control vs. Improvement Controlled process Improvement Time New zone of control Out-of-control

Leading Practices (1 of 2) Translate customer requirements and internal capabilities into product and service design requirements early in the process Ensure that quality is built into products and services and use appropriate tools during development Manage product development process to enhance communication, reduce time, and ensure quality Define, document, and manage important production/delivery and support processes

Leading Practices (2 of 2) Define performance requirements for suppliers and ensure that they are met Control the quality and operational performance of key processes and use systematic methods to identify variations, determine root causes, and make corrections Continuously improve processes to achieve better quality, cycle time, and overall operational performance Innovate to achieve breakthrough performance using benchmarking and reengineering

Product Development Paradigms Traditional Approach Design the product Make the product Sell the product Deming’s Approach Design the product Make it with appropriate tests Put it on the market Conduct consumer research Redesign with improvements

Product Development Process Idea generation Concept development Product & process design Full-scale production Product introduction Market evaluation

Quality Engineering System Design Parameter Design Tolerance Design Functional performance Parameter Design Nominal dimensions Tolerance Design Tolerances

Loss Functions loss no loss nominal tolerance Traditional View Taguchi’s View

Taguchi Loss Function Calculations L(x) = k(x - T)2 Example: Specification = .500  .020 Failure outside of the tolerance range costs $50 to repair. Thus, 50 = k(.020)2. Solving for k yields k = 125,000. The loss function is: L(x) = 125,000(x - .500)2 Expected loss = k(2 + D2) where D is the deviation from the target.

Design Objectives Cost, Manufacturability, Quality, Public Concerns Tools and Approaches Design for Manufacturability Design for Environment

Streamlining Product Development Competitive need for rapid product development Concurrent engineering - a process in which all major functions involved with bringing a product to market are continuously involved with the product development from conception through sales Design reviews

House of Quality Interrelationships Customer requirement Technical requirements Voice of the customer Relationship matrix Technical requirement priorities Customer requirement Competitive evaluation Interrelationships

Quality Function Deployment technical requirements component characteristics process operations quality plan

Motorola’s Approach to Process Design Identify the product or service Identify the customer Identify the supplier Identify the process Mistake-proof the process Develop measurements and control, and improvement goals.

Evaluating a Process Are steps arranged in logical sequence? Do all steps add value? Can some be eliminated or added? Can some be combined? Should some be reordered? Are capacities in balance? What skills, equipment, and tools are required at each step? At which points might errors occur and how can they be corrected? At which points should quality be measured? What procedures should employees follow where customer interaction occurs?

Projects Project initiation – direction, priorities, limitations, and constraints Project plan – blueprint and resources needed Execution – produce deliverables Close out – evaluate customer satisfaction and provide learning for future projects

Basic Components of Services Physical facilities, processes, and procedures Employee behavior Employee professional judgment

Key Service Dimensions Customer contact and interaction Labor intensity Customization

Control A well-controlled system is predictable The continuing process of evaluating process performance and taking corrective action when necessary Components of control systems Standard or goal Means of measuring accomplishment Comparison of results with the standard as a basis for corrective action A well-controlled system is predictable

After Action Review What was supposed to happen? What actually happened? Why was there a difference? What can we learn?

Supplier and Partnering Processes Recognize the strategic importance of suppliers Develop win-win relationships through partnerships Establish trust through openness and honesty

Supplier Certification Systems “Certified supplier” – one that, after extensive investigation, is found to supply material of such quality that routine testing on each lot received is unnecessary

Benefits of Effective Supplier Process Management Reduced costs Faster time to market Increased access to technology Reduced supplier risk Improved quality

Process Improvement New approaches from the total quality movement Productivity improvement Work simplification Planned methods change Kaizen Stretch goals Benchmarking Reengineering Traditional Industrial Engineering New approaches from the total quality movement

Kaizen Gradual and orderly continuous improvement Minimal financial investment Involvement of all employees Exploit the knowledge and experience of workers

Agility Flexibility – the ability to adapt quickly and effectively to changing requirements Cycle time – the time it takes to accomplish one cycle of a process Benefits Improve customer response Force process streamlining and simplification

Breakthrough Improvement Discontinuous change resulting from innovative and creative thinking Benchmarking – the search of industry best practices that lead to superior performance Competitive benchmarking Process benchmarking Strategic benchmarking Reengineering – radical redesign of processes

Process Management in the Baldrige Award Criteria The Process Management Category examines the key aspects of an organization’s process management, including customer-focused design, product and service delivery, key business, and support processes. This Category encompasses all key processes and all work units. 6.1 Product and Service Processes a. Design Processes b. Production/Delivery Processes 6.2 Business Processes 6.3 Support Processes