ELEMENTS OF TQM: Process Management

Unless you change the process, why would you expect the results to change.

What is a PROCESS?
It involves the use of an organizations resources to provide something of value. It is nested within other processes along an organizations supply chain. It underlie all work activity and are found in all organizations and all functions of organization (such as accounting, finance, human resources, marketing, etc.).

Process management is important to.

Accounting which seeks better ways to perform its work processes and provides cost analyses of process improvement proposals. Finance which seeks better processes to perform its work, does financial analyses of new process proposals, and looks for ways to raise funds to finance automation.

Process management is important to.

Human resource which melds process and work-force decisions into an effective whole. Marketing which seeks better processes to perform its work and explores opportunities to expand market share when cost are contained.

Process Management
CONTROL planning and administering the activities necessary to sustain a high level of performance in a process IMROVEMENT identifying opportunities for achieving continuously higher levels of quality in operational performance.

Process Management
focused on preventing defects and errors, and eliminating such waste as non-valueadded processing steps, waiting (delay), and redundancy shorter cycle times and faster customer responsiveness are the goals

Process Management
Business processes that most affect customer satisfaction: Core processes that drive the creation of products and services. Support processes that are critical to production and delivery

Process Management
Processes must be: Repeatable process recur overtime

Measurable for such data to be obtained

PROCESS CONTROL
CONTROL continuing process of evaluating performance and taking corrective action when necessary.

Any control system has 3 components: 1. A standard of goal 2. A means of measurement of accomplishment 3. A means of comparing actual results with the standard, along with the feedback to form the basis for corrective action

Quality Control Function

- to prevent, detect, and correct product or service non-conformances that would make the product or service unfit for use

Quality Control Function

OBJECTIVES: 1. To ensure that purchased materials and components meet predetermined quality standards To maintain conformance to design specifications throughout the manufacturing process or during the delivery of a service To achieve the highest possible quality level for the final product or service.

2.

3.

Quality Control Function

OBJECTIVES: 4. To improve productivity by reducing scrap and rework in manufacturing and the number of complaints and returns from the customers. 5. To reduce the internal and external failure costs that arise when quality standards are not achieved.

Quality Control Function

Acceptable Quality
meeting the standards developed during the product-design effort. Acceptance Sampling - Traditional practice has been to accept or reject entire lots of materials procured from suppliers, with rejected lots being returned at the suppliers expense.

Quality Control Function

Statistical Process Control (SPC) - using statistical methods to control quality while a
process is operating.

Final inspection is the last point in the manufacturing process where we can verify that the products meets customer requirements and avoid external failure costs.

Quality Control Function

Quality control plays an important role in service organizations. Since customer satisfaction is the major goal in the delivery of services, quality control is a vital function.

Inspection and Measurement

Inspection and measurement form the basis for detecting quality problems and identifying areas for improvement. The task of the inspection department was to seek out defective items in production and remove them to be scrapped or rework before shipment to customers. Inspection was used as a screening activity Responsible for assisting production personnel in developing effective processes, procedures, and practices for controlling and monitoring quality, not for assuring quality.

Inspection and Measurement

Type of Inspection: 1. ATTRIBUTE a characteristics that assumes one of two values 2. VARIABLE characteristics that can be measured on a continuous scale.

Inspection and Measurement

Factors to be considered in the inspection quantity: 1. the type of product to be inspected 2. the quality characteristics to be examined 3. the quality history of the producer 4. the cost of inspection 5. the effect of inspection on the product

Inspection and Measurement

One-hundred-percent inspection for every unit produced
- for critical characteristics - it provides the best assurance of conformance to specifications but not always perfect because of human errors, faulty measuring equipment and use of incorrect standards

Inspection and Measurement

Sampling Procedures
inspect only a portion of a production lot. useful in checking large quantities of non critical quality characteristics

Inspection and Measurement

LOCATING INSPECTION ACTIVITIES - one must consider trade-offs between the explicit costs of detection, repair, and replacement and the implicit costs of unnecessary additional investment in a nonconforming item if inspection is not performed.

Inspection and Measurement

Rules to locate the inspection station: After operations likely to generate a high proportion of defectives After the finished product is completed Before all processing operations, such as before each machine or assembly operation Before relatively high-cost operations or where significant value is added to the product Before processing operations that may make detection of defectives difficult or costly.

Inspection and Measurement

Because an inspection is not an easy task, it is highly subject to human error. Factors affecting manual human inspection tasks: 1. Complexity 2. Defect Rate 3. Repeated Inspections 4. Inspection Rate

Inspection and Measurement

Ways to improve inspection:

Minimize the number of quality characteristics considered in an inspection tasks Minimize disturbing instructions and time pressures Provide clear, detailed instructions for the inspection task Design the workspace to facilitate the inspection task and provide good lighting

Techniques for Quality Control

Poka-yoke a device that permanently prevents the recurrence of the defect it is designed to eliminate Successive checking design of process that are physically impossible if preceding processes have produced defective parts Autonomation involves equipping machines with automatic stopping devices and other features that eliminate the possibility that large quantities of defectives will be produced.

Techniques for Quality Control

Quality Control in Services The most common characteristics in services are time and number of nonconformances. It is easy to observe human behavior but difficult to describe and classify the observations.

Total Productive Maintenance

concerned with keeping equipment functionally available so that it will work when needed, perform to expectations in producing a quality product, and perform reliably with no breakdowns.

Total Productive Maintenance

TPM seeks to: Maximize overall equipment effectiveness and eliminate unplanned downtime Create operator ownership of the equipment through involving the operator in maintenance activities Foster continuous efforts to improve equipment operation through employee involvement activities.

PROCESS MANAGEMENT
It is a selection of the inputs, operations, work flows, and methods that transform inputs into outputs. Process decisions also deals with the proper mix of human skills and equipment and which parts of the processes are to be performed by each.

Process decision must be made when

a new or substantially modified product or service is being offered, quality must be improved, competitive priorities have changed, demand for a product or service is changing, current performance is inadequate, competitors are gaining by using a new process or technology, or the cost or availability of inputs has changed.

MAJOR PROCESS DECISIONS

Process Choice Vertical Integration Resource Flexibility Customer Involvement Capital Intensity

PROCESS CHOICE
process choice decision depends on the volumes and degree of customization to be provided

FIVE PROCESS TYPES TO CHOOSE FROM:

Project Process characterized by high degree of job customization, the large scope of each project and the release of substantial resources once a project is completed.
It lies at the high customization, low-volume end of the process-choice continuum. It is based on a flexible strategy, with work flows redefined with each new project.

FIVE PROCESS TYPES TO CHOOSE FROM:

Job Process creates the flexibility needed to produce a variety of products or services in significant quantities.
It primarily involves the use of a flexible strategy, with resources organized around the process.

FIVE PROCESS TYPES TO CHOOSE FROM:

Batch Process differs from the job process with respect to volume, variety and quantity.
It implements an intermediate flow strategy. It has an average or moderate volumes, but variety is still too great to warrant dedicating substantial resources to each product or services.

FIVE PROCESS TYPES TO CHOOSE FROM:

Line Process lies between the batch and continuous processes on the continuum, volumes are high, and products or services are standardized, which allows resources to be organized around a product or services.
It fits primarily with the line flow strategy, although it can overlap into the intermediate flow strategy when mass customization or assemble-to-order strategies are pursued.

FIVE PROCESS TYPES TO CHOOSE FROM:

Continuous Process extreme end highvolume, standardized production with rigid line flows.
It is used almost exclusively in manufacturing and fit perfectly a line flow strategy.

VERTICAL INTEGRATION
It is a degree to which firms own production system or service facility handles the entire supply chain

TYPES OF VERTICAL INTEGRATION

Backward Integration represents movement upstream toward the sources or raw materials and parts Forward Integration means that the firm acquires more channels of distribution, such as its own distribution centers and retail stores

Vertical Integration at King Scoopers

Raw materials (eggs, flour, sugar) Backward integration

King Soopers Forward integration Customers (grocery stores)

In-house processes

ADVANTAGES OF VERTICAL INTEGRATION

It can improve the market share and allow a firm to enter foreign markets more easily than it could otherwise. Doing work in-house may mean better quality and more timely delivery. It is generally attractive when input volumes are high.

RESOURCE FLEXIBILITY
It is the ease with which employees and equipment can handle a wide variety of products, output levels, duties, and functions. The choices that management makes concerning competitive priorities determine the degree of flexibility required of a companys resources (its employees, facilities and equipments)

Costs and Volume

Process 2: Special-purpose equipment Break-even quantity Process 1: General-purpose equipment

Total cost (dollars)

F2 F1

Units per year (Q)

CUSTOMER INVOLVEMENT
It reflects the ways in which customers become part of the production process and the extent of their participation.

CUSTOMER INVOLVEMENT
Self Service process decision of many retailers, particularly when price is a competitive priority. Product Selection a business that competes on customization frequently allow customers to come up with their own product specifications or even become involved in designing the product.

CUSTOMER INVOLVEMENT
Time and Location when services cant be provided in the customers absence customers may determine the time and location that the services is to be provided.

CAPITAL INTENSITY
It is the mix of equipment and human skills in a production process; the greater the relative cost of equipment, the greater the capital intensity.
Automation is a system process, or piece of equipment that is self-acting and selfregulating.

Relationship Between Decisions

Less Customization and Higher Volume Product Design

Less Complexity, Less Divergence, More Line Flows

Process Characteristics

(1) (2) One of a kind Low volume, products, made low to customer standardization order

(3) Multiple products moderate volume

(4) Few major products, higher volume

(5) High volume high standardization, commodity products

(1) Complex and highly customized process, unique sequence of tasks (2) Jumbled flows, complex work with many exceptions (3) Disconnected line flows, moderately complex work (4) Connected line, routine work (5) Continuous flows, highly repetitive work

Project choice

Job process Batch process Line process Continuous process

DESIGNING PROCESSES
Two different but complementary approaches exist for designing processes: process reengineering and process improvement.

PROCESS REENGINEERING
Reengineering fundamental rethinking and radical redesign of process to improve performance dramatically in terms of cost, quality, service and speed.

PROCESS REENGINEERING
Reengineering Process is about reinvention, rather than incremental improvement
It is a strong medicine and not always needed or successful.

FOCUS OF REENGINEERING
Critical Processes the emphasis of reengineering should be on core business processes, rather than functional departments such as purchasing or marketing. Strong Leadership senior executives must provide strong leadership for reengineering to be successful.

FOCUS OF REENGINEERING
Cross-Functional Teams a team, consisting of members from each functional area affected by the process change, is charged with carrying out a reengineering project. Information Technology it is a primary enabler of process engineering.

FOCUS OF REENGINEERING
Clean Slate Philosophy reengineering requires a clean slate philosophy that is, starting with the way the customer wants to deal with the company. Process Analysis a reengineering team must understand things about the current process: what it does, how well it performs, and what factors affect it.

PROCESS IMPROVEMENT
It is the systematic study of the activities and flows of each process to improve it. Its purpose is to learn the numbers, understand the process, and dig out the details.

Process improvement must be applied to the following:

The process is slow in responding to the customer. The process introduces too many quality problems or errors. The process is costly. The process is a bottleneck, with work piling up waiting to go through it. The process involves disagreeable work, pollution, or little value added.

BASIC TECHNIQUES FOR ANALYZING PROCESSES

Flow Diagram traces the flow of information, customer, employees, equipment, or materials through a process. Process Charts is an organized way of recording all the activities performed by a person, by a machine, at a workstation, with a customer, or on materials.