M

Technology and Operations Strategy

Module 2

Process Management Mapping

Process Mapping, Process Flow charts, Ishikawa
Diagrams: Fishbone Diagram and Cause and
Effect Relationship.
Lean Manufacturing Introduction, Lean
Operations in the service sector.
Process
 Process Mapping
• The process map gives a pictorial representation of the process as it

really is i.e., current state

• Process Mapping is the technique of using flowcharts to illustrate the flow

of a process, proceeding from the most macro perspective to the level of

detail required to identify opportunities for improvement. Process

mapping focuses on the work rather than on job titles or hierarchy.

• Process mapping allows a team to picture the work itself outside of the

organization’s hierarchy. In other words, process maps help us picture

the work itself, not the organization.

 Process Mapping Features
• Show unexpected complexity, problem areas, redundancy, unnecessary
loops, and where simplification and standardization may be possible .
• To allow a team or individual to identify the actual flow or sequence of
events in a process that any product or service follows.
• Compare and contrast the actual versus the ideal flow of a process to
identify improvement opportunities .
• Allow a team to come to agreement on the steps of the process and to
examine which activities may impact the process performance
• Identify locations where additional data can be collected and investigated
• Process maps can be applied to anything from the travels of an invoice or
the flow of materials, to the steps in making a sale or servicing a product.
• Address questions related to individual and team performance, quality of
work life, and work design.
Process Mapping Symbols
Continued…..
Example
 Process Flow Chart

• A flowchart is a picture of the separate steps of a process in sequential order. It is a generic tool that can be adapted for a wide variety of purposes, and can be used to describe various processes, such as a manufacturing process, an administrative or service process, or a project plan.
 Flow Chart/Process Flow Diagram
• A Flow Chart (also known as a Process Flow Diagram) is a
diagram of the steps in a process and their sequence. Two
types of flow charts are utilized in quality improvement. A
high-level flowchart, outlining 6-10 major steps, gives a
high-level view of a process.
• These flowcharts display the major blocks of activity, or the
major system components, in a process.
• These charts are especially useful in the early phases of a
project and help to set priorities for improvement work.
• The other type is a detailed flowchart is a close-up view of
the process, typically showing dozens of steps. These
flowcharts make it easy to identify complexity, excessive
steps, etc. in a process and should be used when you want
to standardize or make changes in the process.
 When to Use a Flow Chart?
• When you need to define or analyze an existing
process.
• When you need to standardize or redesign a
process.
• When you need to find areas for improvement in
a process such as unnecessary steps, gaps,
barriers, etc.
Process Flow Chart Symbols and its
Explanation
Process Flow Chart
Process Flow Chart of Inventory
Management
 Ishikawa Diagrams

• Professor Ishikawa’s greatest achievement was in

the dissemination and development of quality
control. Quality control techniques were introduced
into Japan from the United States of America just
after the end of World War II (1939 to 1945).
 Ishikawa diagram

• Ishikawa also called as fishbone diagrams, herringbone diagrams, cause-and-effect diagrams.

• Brainstorming tool used to identify potential root causes to problems. (Root Cause Analysis-RCA)
 Objective of Ishikawa

• Determining the root causes of a problem.

• Focusing on a specific issue without resorting to
complaints and irrelevant discussion.
• Identifying areas where there is a lack of data.
Fishbone Diagrams/Analysis
 Fish Bone Diagram
• A fish-bone diagram is one of the seven quality
circles (QC) tools. It helps to visualize the
potential causes in order to find the root cause
of a particular problem. It helps to identify,
analyze and improve quality issues. Sometimes,
it can also be helpful to analyze what can go
wrong - preventing future problems. It derives its
name for its shape which resembles the side
view of the skeleton of a fish.
Using the Ishikawa approach to identifying the root cause(s) of
a problem provides several benefits to process
improvement teams:
Benefits
• Constructing a Fishbone Diagram is straightforward and easy to
learn.
• The Fishbone Diagram can incorporate metrics but is primarily a
visual tool for organizing critical thinking.
• By Involving the workforce in problem resolution the preparation
of the fishbone diagram provides an education to the whole team.
• Using the Ishikawa method to explore root causes and record
them helps organize the discussion to stay focused on the current
issues.
• It promotes "System Thinking" through visual linkages.
• It also helps prioritize further analysis and corrective actions.
Advantages and Disadvantages of
Fishbone
Categories of Fishbone Diagram
 Drawing a fishbone diagram

Draw the head on the right which contains the problem (effect or issue) for analysis
Draw a straight line from the head, leading to the left. This is the backbone
Identify the areas, broad level categories, to be studied and branch them from the backbone.
Analyze the causes from these categories that contribute to the effect. Connect these causes to the category branches respectively.
Break down the causes into sub-causes, till you cannot drill down further causes.
 Fishbone Analysis
• Fishbone diagrams are used in the “Analyze” phase of the DMAIC –
define, measure, analyze, improve and control. It is the methodology used
for Lean Six Sigma, a problem-solving tool. This diagram is also
complemented with “why-why” analysis.

• The causes in each area are by a drill-down approach in the context of the
problem (effect). These causes can also be further broken into sub-causes
for further analysis. Sometimes, it is also called a Cause-and-Effect
diagram, giving importance to the causes.
• Common uses of the fishbone diagram are to identify:
- Potential causes of problems in new product design
- Prevention of quality defect
- Potential factors that can cause the defect
- Identify the symptoms of the cause
 A step-by-step guide to find the causes:
1. Identify the problem to be analyzed
2. Take up categories of causes for analysis. Here, taking the categories of
6Ms, ask the following questions:
Man: Any man/people related causes to the problem?
Machine: What are the machine-related problems?
Method: What is wrong in the method associated that is giving rise to the problem?
Measurement: Any tool or standard error that needs rectification?
Material: What changes in the properties of the material that occurred?
Environment: What were the environmental conditions (temperature, pressure, etc)?
3. Drill down further, by asking “Why” to the first level of causes.
4. Note these cases against the major categories.
After all the possible and potential causes have been identified, these causes must be
rated. The rating is done based on the impact of the cause on the effect. The rating will
decide the importance and criticality of the cause and shall be worked upon. The
brainstorming session will continue to rate the different causes. Based on the highest
rating, the solutions will be proposed.
• Example 1: XYZ Manufacturing Pvt. Ltd.
• XYZ Manufacturing Pvt. Ltd has a production
unit that produces iron nails. Recently, they
started facing the issue of the nails not
conforming to their standard dimensions. Also,
the nails were rusted by the time they were set
for delivery. Here is the fishbone diagram for the
company.
The main problem is shown on the right, “Iron nails
out of shape – rusting”. This means that the problem
that is dealt with is the incorrect dimensions of the
nails due to rust. The nails are rusty and out of
dimension. Then the main categories are identified and
the potential causes from each of the categories are
identified.

The man category has two causes. There is a cause that

the workman working on the nails production does not
have enough training or that he or she is not
experienced enough with the machines, method or
working process of the iron nails. As a solution, the
organization could give adequate training to the
workmen working on the nails production unit.
• Machine: The tool used to shape the nail was not aligned accordingly. The pressure of the coolant that is used to mitigate the heat developed during machining caused the movement of the work piece – leading to a discrepancy of alignment. A thorough check of the machine and the machining operations should be done to get the desired nails.

• Method: The turning process, the work piece moved too fast which lead to a distorted dimension of the nail.
• Measurement systems like tools are referred to here.
The tools may not be correctly used for measuring the
material. There could have been calculation errors
• Material: The raw material was not cleaned properly
because of this the nail was out of dimension when a
machining operation was conducted on the nail.
• The environment category has a cause and a sub-
cause. The cause is moisture. Why was there moisture in
the atmosphere?
• It was the rainy season. This is the root cause from
the Environment category. Now, the company can look
for solutions on how to overcome the problem of
moisture content, especially if it was rainy or humid
weather.
Example 2: ABC Pvt. Ltd
• A company, ABC Pvt. Ltd. identified that their sales of a particular Product A fell by 36% in June this year. The company decided to find the root cause of fishbone analysis. This is the diagram that was projected.
• The example shows that there are no six categories and only one of them is used, that is the Environment.
• Also, the company wishes to study the department wise causes of the problems and thus they have categorized the causes into three key departments and noted the respective causes. A simple technique to drill down the causes is to ask, “Why” to every cause.
• For example: Why did the package get wet due to moisture? Answer: Unexpected Rain
 Cause and Effect Diagram
• A Cause and Effect Diagram is a graphical tool for
displaying a list of causes associated with a specific
effect. It is also known as a fishbone diagram or
an Ishikawa diagram
• Cause-and-effect diagrams are one of the tools that Six
Sigma professionals use to obtain the perspectives of
individual members of a project team. The cause-and-
effect diagram is a graphical brainstorming tool used to
help capture the possible causes of a problem. This tool
can be used in the analyze stage to determine underlying
causes of a problem or in the improve stage to identify
potential failure modes.
• The cause-and-effect diagram is also known as the
fishbone diagram because on paper it takes the
shape of a fish skeleton. The problem to be analyzed
is listed at the head of the skeleton; a horizontal line that
acts as the fish’s spine begins at the head and stretches
horizontally outward, diagonal lines that represent
factors that may be part of the problem branch out from
the spine and are augmented with additional lines that
list the problem’s possible causes. The main causes are
categories as 5M+1E. i.e. Man, Method, Machine,
Material, and Money + Environment.
 Seven basic quality tools as per Prof. ISHIKAWA

• Process Flow diagram

• Histogram
• Check sheet (tally sheet)
• Cause and effect diagram (fishbone or Ishikawa diagram)
• Pareto chart (80-20 rule)
• Scatter diagram (Shewhart chart)
• Control chart
Quality Control Tools
• Process flow diagram is the pictorial presentation of actual
process using symbols. These symbols communicates the
activities, stages and decisions in the process.
• Check sheet is a simple sheet of paper on which data is
collected by adding tally marks against predetermined
categories.
• Histogram is the frequency marks of the data represented by
adjacent rectangular bars on X-Axis, where as the height is
given on the Y-Axis. Histogram tells about the extent of spread
of data. if the shape of histogram is symmetrical about the
center line i.e. bell shaped then there is no skewness in
the data. But if the shape of histogram is not symmetrical
then there is skewness in the data and it is presented by
asymmetrical shape of histogram.
• Pareto diagram is the combination of bars and line
graph. Pareto analysis the pictorial presentation of
causes responsible for a problem in a systematic order
of their significance.
• The Pareto chart is very helpful to find which causes
should be address first because it depicts the
frequencies of 'vital few' or important causes of a
problem , compared with the 'trivial many‘ (unimportant) .
When analyze the chart we able to conclude that only
two or three 'vital few' causes has cumulative percentage
of 70 or 80. Hence it means to reduce the effect of the
problem by 70 to 80%.
• Scatter diagram is the possible relationship between two variables;
Independent variable and dependent variable.
• For example fuel for an automobile is dependent on the distance
covered by it. More fuel is required to cover more distance. The
distance is independent quantity and the fuel to cover the distance
is dependent quantity. The degree of relationship between two
variables is given by coefficient of correlation.

• Control Charts are the pictorial presentations of the data variations

over a specific period of time. With the help of control charts
decisions are made about the process. Control charts are prepared
for the data collected over a time between control limits called
Upper control limits (UCL) and Lower control limits (LCL).
 Lean Manufacturing

• Lean manufacturing is a methodology that focuses

on minimizing waste within manufacturing systems
while simultaneously maximizing productivity.
• Lean manufacturing, or simply “lean,” is a systematic
method designed to minimize waste in a
manufacturing system while productivity remains
constant. Originating in Japan in the Toyota
Production System (TPS), lean manufacturing
strives to minimize waste within a manufacturing
operation, with the idea being to clearly portray what
adds value by removing what doesn’t.
• In lean manufacturing, “waste” is defined as anything that doesn’t add value to
a product. “Value” in manufacturing is defined as anything that a customer would
be willing to pay for.
• So, waste is any cost incurred in a process that does not benefit the customer.
Lean manufacturing is centered around eliminating waste from manufacturing
processes.
• Toyota defines three types of waste:
• Muri = “difficult to do” “overburdened” “strained.” Waste that is produced because
the task is complex or difficult to do is referred to as muri. This waste is produced
because the limits of a process are “pushed too far”, because of poor
ergonomics, poor fit between parts, inadequate tools, unclear specifications, etc.
• Mura = “unevenness.” Toyota’s focus on improving even flow exposes waste.
Anything (defects, broken machinery, etc.) that interrupts flow is identified as
“mura” waste.
• Muda = wasteful activity that does not add value.
• Lean practitioners commonly agree on 7 wastes
(or muda, as they are referred to in the Toyota
Production System (TPS)):
Muda or Waste: Transport, Inventory , Motion,
Waiting, Overproduction , Over processing , Defects
• These wastes were defined by Taiichi Ohno, father of
the TPS.
• Some practitioners include an 8th waste, unutilized
talent. While the first 7 wastes are directly related to
manufacturing processes, the waste of unutilized talent
is specific to manufacturing management.
1. Transport. The transport waste is defined as any material
movement that doesn’t directly support immediate production.
An improper facility layout, poor production planning, poor
scheduling can generate transport waste. Another example is
poor workplace organization, which results, in unnecessary
additional material transport.

2. Inventory. The inventory waste refers to any supply in excess

of process requirements necessary to produce goods or
services in a Just-in-Time manner. Causes of inventory waste
include inaccurate forecasting systems, inefficient processes
or suppliers, long changeover times, unbalanced production
processes, or poor inventory planning and tracking.
3. Motion. The motion waste is defined as any movement of people that
doesn’t contribute added value to the product. Examples include
moving equipment, reaching or bending, or gathering tools more than
necessary, as well as unnecessarily complicated procedures. The
Motion waste is often caused by ineffective plant layouts, lack of visual
controls, poor process documentation, or poor workplace organization.
4. Waiting. The waiting waste refers to as any idle time that occurs when
codependent events aren’t fully synchronized. Examples of this waste
include idle operators waiting for equipment, production bottlenecks,
production waiting for operators, and unplanned equipment downtime.
Waiting can be caused by inconsistent work methods, lack of proper
equipment or materials, long setup times, low man/machine
effectiveness, poor equipment maintenance, or skills monopolies
5. Overproduction. Overproduction is defined as producing more
than is needed, faster than needed, or before it’s needed.
Automation in the wrong places, lack of communication, local
optimization, low uptimes, poor planning, and a just in case
reward system can cause overproduction waste.
6. Over processing. Over processing refers to any redundant effort
in production or communication that does not add value to a
product or service. Over processing waste includes endless
product or process refinement, excessive information, process
bottlenecks, redundant reviews and approvals, and unclear
customer specifications. It is caused by decision making at
inappropriate levels, inefficient policies and procedures, lack of
customer input concerning requirements, poor configuration
control, and spurious quality standards.
7. Defects. The defect waste is defined as the loss of value do to the
scrap, repair, or rework of a product that deviates from
specifications. Excessive variation in production processes, high
inventory levels, inadequate tools or equipment, incompatible
processes, insufficient training, or transport damage due to poor
layouts and unnecessary handling can all lead to defect waste.

8. Unutilized talent. The waste of unutilized talent refers to

underutilizing or engaging employees in a process. This could take
the form of employees performing unnecessary work when their
talent could be utilized in activities that add greater value, or not
utilizing employees’ critical thinking abilities and feedback in
processes. Unutilized talent also includes allowing employees to
work in silos, which prevents them from sharing their knowledge.
• Eliminating the 8 wastes from a manufacturing value stream is the core of lean manufacturing. Lean manufacturers should focus on building processes that make these wastes obvious so that they can be addressed–and improvements can be made–immediately.
 Principles of Lean Manufacturing
• The lean manufacturing philosophy, strongly disseminated by Taiichi Ohno, is based on principles that guide the “lean thinking”. According to Womack & Jones (2003), the principles of lean manufacturing are five, namely:

• value specification,
• value stream mapping,
• flow optimization,
• pull production system and
• perfection or continuous improvement.
Compare of mass Production and Lean Production
 Advantages of Lean Manufacturing
Eliminates Waste: Lean principles aim to minimize all forms of waste,
from sources as varied as material defects to worker ergonomics.
Many sources of waste are easy to identify and correct, such as a
machine that is out of adjustment, producing a high volume of
defects. Other forms of waste include environmental conditions that
impede worker efficiency. Better lighting may help a worker read
production instructions; moving a file cabinet might eliminate wasted
time for a clerk.
Worker Satisfaction: Implementing lean principles in your company
requires input and participation from your production staff. They are
often in the best place to see where waste and inefficiency occurs.
Not only do they serve as a resource for you, employees usually
respond in a positive way to sincere efforts to involve them in
improvement processes. When they see suggestions and ideas
incorporated, a sense of ownership and satisfaction about their
contribution is more likely to follow.
Just in Time: JIT is a strategy that suggests large inventories are wasteful
of company resources. Business equity tied up in inventories of raw and
finished goods interferes with cash flow. Money is also saved through
reduced warehousing needs. The perfect JIT scenario would have the
raw materials purchased and delivered at the moment production needs
them, and the finished product is sold and delivered the moment it comes
off the line. While this scenario may be impossible, lean philosophy
suggests making improvements toward the ideal.

Competitive Advantage: Beyond simply reducing costs and improving

efficiency, lean production techniques introduce systems and develop
skills with your staff that support changes in the workplace that new sales
create. Space saved on warehousing may be used to add new product
lines. The same is true of time savings.
 Disadvantages of Lean Manufacturing
• New Inefficiencies: Lean techniques can be overused. When
tracking of productivity and waste starts to impact the time used
for production, the solution becomes the problem. When lean
principles are first applied, you can expect larger returns than later
down the road. It is tempting to push those expectations, but you
must examine the value of improvements.
• Equipment Failure: Lean has very little room for error. Equipment
or labor failure can lead to major inconsistencies and can make
the entire operation fall behind. In other mass production facilities,
employees could move from one machine to another in the event
of a breakdown. In lean, there are not many other places for
employees to move to because everything within the operation is
being utilized. In addition, the breakdown of a machine must be
fixed immediately as there are usually no alternative resources
that can do the work. This is why it is important to stay on top of all
machine maintenance and inspections.
• Worker Frustration : When a certain level of refinement
is met, using lean methods to squeeze more economy
from production can discourage workers, reversing
positive motivation and undermining your leadership.
Trends of backsliding in previous improvements may
indicate worker resentment. Striking a balance between
stasis and continuous improvement is a challenge in any
lean environment. A small business may be more prone
to reaching such a refinement because of its less
complex nature.
 Lean Operations in the service
sector
• Lean as a concept is new to the service sector.
• The definition of lean service is a standardizable
system of service operations made up only by
activities that generate value for customers,
focusing on explicit tangibles and aiming to meet
the customers’ expectations for quality and price.
• The service sector, differently from industries,
has a great involvement of people, whether in
customer service (front office) or in preparing
something that should be delivered to a
distributor or even directly to the customer at the
point of sale (back office).
 Incorporating 5 Lean Principles for Service Industries

1. Define Value
• In order to properly understand the first concept of
consumer value meaning, it is essential to consider what
value is. Price is what the clients are willing to pay for.
Discovering the customer’s real or implicit desires is of
vital importance. Clients may not understand what they
want or may not be able to express it. This is particularly
important in the case of new goods or technologies.
There are many strategies, such as interviews, polls,
quantitative statistics, and web analytics, that can help
you decode and uncover what’s important to
consumers.
2. Stream Mapping
• This method focuses on defining and removing
the non-value-added behaviors in each process
phase and, where appropriate, reducing the
processing period between successive steps.
Even so, value-enabling actions can not be
removed from a system entirely. Instead, they
may be classified into value-adding and non-
value adding activities, enabling the removal of
certain value-adding activities that are not rated.
3. Creating Flow
• Project Managers can detect duplication by measuring
the value source. Some activities which are completed
too early, too late, or repeated frequently result in waste.
Lean project managers can establish the optimum flow of
operations by evaluating the map and disposing of
waste.
• Lean project administrators are looking for potential
setbacks and bottlenecks. If some shortfalls are found,
activities can need to be reordered. Often project
managers may also opt to incorporate value-adding
activities for process enhancements.
4. Build Pull
• The 4th of the Lean principles, after you have built a workflow,
will be asked to create a pull framework. The concept is easy,
just start new work when it’s needed, and your team has spare
power. Your goal should be to generate value that your
consumers need and to prevent overproduction.
5. Seek Maturity
• Lean management at heart is about constant change. Lean
management needs a meticulous approach to any move.
Optimization must be one of the very corporate strategies. Any
part of the company must work for waste reduction, value
addition, and quality delivery. Lean agencies, there’s still
space for change.
• Lean for service organizations
• Companies in the service sector are constantly under pressure to
deliver excellent customer service, faster response times and
valuable support for their customers. Lean can help to optimize all
service delivery processes by targeting wastes and either removing
them completely or move to a more effective state as part of a
journey of continuous improvement.
• An IT company, for example, is very different from a manufacturing
company, however it still has many wasteful processes that could be
removed or reduced. Lean tools and techniques can improve the
customer experience by reducing unnecessary activities such as the
number of call transfers and unnecessary IT processes, whilst also
providing solutions to cut down on errors, maximize employee
empowerment and become more cost-effective.
 Examples of lean services
• Lean in the financial sector
• Financial firms are a prime example of a service sector that cannot afford
to be wasteful, due to strong competition, the impact of the recent
financial crisis and vulnerability to economic downturns. Yet, it is claimed
that at least 40% of costs in the financial sector are spent on wasteful
activities that have no added value to the customer. Although they cannot
control the fluctuating economy, financial companies can however invest
in refining and redefining their own operations to ensure more effective
and customer focused operation.
• Lean thinking can provide businesses such as banks, insurance and
investment companies with more productive and cost-effective solutions,
therefore reducing risk during an economic dip. Lean would also help to
improve employee satisfaction, increase customer value and ensure the
supporting activities are focused on delivering value..
• Lean in marketing services
• Marketing companies have so many different processes to their
business, that without effective coordination in place, mistakes can
easily occur. Every task needs to include a thorough process of
planning, writing, designing and proofing to generate a high
enough standard of quality for their clients. These ongoing
processes are not only extremely time-consuming, but with different
tasks being assigned to different departments, project efficiency could
also be compromised.
• Lean implementation can help marketing companies to streamline their
processes by removing tasks that are unnecessary and implementing a
much more efficient approach. In doing so, lean also provides a direct
improvement on work quality and therefore provides added value for the
customer. This allows lean marketing companies to have that added
edge over their competitors.
•Thank You