Designing, Controlling, and Improving Organizational Processes
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DESIGNING, CONTROLLING, AND
IMPROVING ORGANIZATIONAL
PROCESSES
PROCESS MANAGEMENT Involves design, control, and
improvement – the key activities necessary to achieve a high level of performance in key value creation and support processes, and identifying opportunities for improving quality and operational performance, and ultimately, customer satisfaction.
PROCESS DESIGN Good process management begins with
good process design. The design of the processes that
produce and deliver goods and services can have a significant impact on cost, flexibility, and quality.
The design of a process begins with the process owner.
Major factors in strategyCostQualityTime-to-marketCustomer satisfactionCompetitive advantage
Product and Service Design
TRENDS IN PRODUCT & SERVICE DESIGN
Increased emphasis on our attention to:Customer satisfaction
Reducing time to introduce new product or service
Reducing time to produce product
TRENDS IN PRODUCT & SERVICE DESIGN (CONT’D)
Increased emphasis on our attention to:The organization’s capabilities to produce
or deliver the itemEnvironmental concernsDesigning products & services that are
“user friendly” Designing products that use less material
Translate customer wants and needs into product and service requirements
Refine existing products and services Develop new products and services Formulate quality goals Formulate cost targets Construct and test prototypes Document specifications
PRODUCT OR SERVICE DESIGN ACTIVITIES
REASONS FOR PRODUCT OR SERVICE DESIGN
Be competitive Increase business growth & profits Avoid downsizing with development of new
products Improve product quality Achieve cost reductions in labor or materials
Development time and cost Product or service cost Resulting product or service quality Capability to produce or deliver a given product or
service
OBJECTIVES OF PRODUCT AND SERVICE DESIGN
DESIGN FOR QUALITY IN SERVICE PROCESSES Service processes often involve both
internal and external activities, a factor that complicates quality design.
Services have three basic components: Physical facilities, processes, and
proceduresEmployees’ behaviorEmployees’ professional judgment.
PROCESS CONTROL Control is the activity of ensuring
conformance to the requirements and taking corrective action when necessary to correct problems and maintain stable performance.
Any control system has three components: (1) a standard or goal, (2) a means of measuring accomplishment, and (3) comparison of actual results with the standard, along with feedback to form the basis for corrective action.
PROCESS IMPROVEMENT Any process performance measure
naturally fluctuates around some average level. Abnormal conditions cause an unusual deviation form this pattern. Removing the causes of such abnormal conditions and maintaining level of performance is the essence of control. Improvement means changing the performance to a new level.
PROCESS IMPROVEMENT (C0NT’D) To be able to improve a process, it must
be repeatable and measurable. Repeatability means that the process
must recur over time.
CONTINUOUS IMPROVEMENT AND KAIZEN Continuous improvement to provide
quality to customers is essential to total quality.
Kaizen strategy is the cumulative effect of hundreds or thousands of small improvements that creates dramatic change in performance.
Kaizen was created in Japan following World War II. The word Kaizen means "continuous improvement". It comes from the Chinese characters 改 ("kai") which means "change" or "to correct" and 善 ("zen") which means "good".
IMPROVEMENT PROCESSES Managers need systematic approaches
to drive continuous improvement programs.
Some organizations follow some standard and popular approaches, while others develop unique approaches to meet their own needs and cultures.
EASTMAN CHEMICAL Focus and pinpoint Communicate Translate and link Create a management action plan Improve processes Measure progress and provide feedback Reinforce behaviors and celebrate
results
LEAN THINKING Lean production refers to approaches
initially developed by the Toyota Motor Corporation that focus on the elimination of waste in all forms including defects requiring rework, unnecessary processing steps, unnecessary movement of materials or people, waiting time, excess inventory, and overproduction.
It involves identifying and eliminating non-value-added activities throughout the entire value chain to achieve faster customer response, reduced inventories, higher quality, and better human resources.
TOOLS FOR LEAN PRODUCTION The 5 S’s
Seiri - Sort Seiton - Set in Order Seiso - Shine Seiketsu - Standardize Shitsuke - Sustain
Visual Controls Efficient Layout and Standardized Work Pull Production SMED Total Productive Maintenance Source Inspection Continuous Improvement
C”,)
BREAKTHROUGH IMPROVEMENT This refers to discontinuous change, as
opposed to the gradual, continuous improvement philosophy of kaizen.
This results from innovative and creative thinking; often these are motivated by stretch goals, or breakthrough objectives.
2 Approaches: Benchmarking and Reengineering
BENCHMARKING This is the search for best practices that
will lead to superior performance. It helps a company learn its strengths
and weaknesses (as well as those of other companies) and incorporate the best practices into its own operations.
2 major types: Competitive Benchmarking and Generic Benchmarking
COMPETITIVE BENCHMARKING VERSUS GENERIC BENCHMARKING Competitive benchmarking usually
focuses on the products and manufacturing of a company’s competitors.
Generic benchmarking evaluates processes or business functions against the best companies, regardless of their industry.
REENGINEERING This is focused on breakthrough
improvement to dramatically improve the quality and speed of work and to reduce its cost of fundamentally changing the processes by which work gets done.
Also known as Process Redesign. This is often used when the
improvements needed are so great that incremental changes to operations will not get the job done. The goal is to achieve quantum leaps in performance.
PRINCIPLES OF PROCESS REDESIGN Reduce handoffs Eliminate steps Perform steps in parallel rather than in sequence
Involve key people early
ORGANIZATIONAL ISSUES IN PROCESS DESIGN AND IMPROVEMENT 2 factors critical to the long-term
success of reengineering initiatives:Breadth – extent to which the process
maps onto the dimensions of the business, from a single activity in one function to spanning the entire business unit.
Depth – how many of the depth levers (such as structure, skills, IT systems, roles, measurements/incentives, and shared values) are manipulated
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