1. Process Management
Concepts and Insights
Bill Voravuth

2. 10 Critical Questions: Process Management
1. How do you design and innovate your
overall work SYSTEM (how the work of
your organization is accomplished)?
2

3. Is this a system ?
Dr. Russell L. Ackoff, father of operations research, cited in a keynote address on systems engineering in University of Pennsylvania 3

4. Is this a system ?
Dr. Russell L. Ackoff, father of operations research, cited in a keynote address on systems engineering in University of Pennsylvania 4

5. Then, what is a system ?
SYSTEM
(from Latin systēma, in turn from Greek σύστημα systēma)
A set of INTERACTING and
INTERDEPENDENT ELEMENTS forming an
integrated WHOLE to serve a PURPOSE
The word system in its meaning here, has a long history which can be traced back to Plato (Philebus), Aristotle
(Politics) and Euclid (Elements). It had meant "total", "crowd" or "union" in even more ancient times, as it derives
from the verb sunìstemi, uniting, putting together
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6. National Aeronautics and Space Administration
A “system” is a construct or collection of
different elements that together produce
results not obtainable by the elements alone.
the ELEMENTS, or PARTS, can include
people, hardware, software, facilities,
policies, and document; that is, all things
required to produce system-level results. The
“VALUE ADDED” by the system as a whole,
beyond that contributed independently by the
parts, is primarily “CREATED BY THE
RELATIONSHIP AMONG THE PARTS”;
that is, how they are interconnected.
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7. Why we need systems ?
“The WHOLE
is greater than
the SUM OF ITS PARTS”
Dr. Russell L. Ackoff, father of operations research, cited in a keynote address on systems engineering in University of Pennsylvania 7

8. Very important system criteria
KNOW or DECIDE on your system boundary
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9. NASA system, elements, and boundary
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10. 10 Critical Questions: Process Management
1. How do you
DESIGN and
INNOVATE your
overall work
system?
Mohanbir Sawhney, Robert C. Wolcott, Inigo Arroniz of Northwestern University. Article in MIT Sloan Management Review 2006 10

11. On innovation
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12. On innovation
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13. On innovation
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14. On innovation
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15. On innovation
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16. On innovation
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17. On innovation
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18. On innovation
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19. On innovation
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20. On innovation
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21. On innovation
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22. On innovation
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23. On innovation
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24. 10 Critical Questions: Process Management
2. How do your work systems and key work
processes (your most important internal
value creation processes) relate to and
capitalize on your CORE COMPETENCIES?
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25. Core Competencies
AREAS OF GREATEST EXPERTISE
of an organization which:
• DELIVERS stakeholder-perceived VALUE
and enable business to succeed
• Is RARE and DIFFICULT for our existing or
potential competitors TO COPY
• EXTENDS ACROSS key services, products,
processes, systems, and markets WITH
organizational SETUP TO UTILIZE IT
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26. 10 Critical Questions: Process Management
2. How do your work systems and key work
processes (your most important internal value
creation processes) relate to and CAPITALIZE
on your core competencies?
Manufacturing
NO ! 26

27. Core competencies - best practices
a variety of external data to help them
• The organization uses
identify their core competencies.
• Objectivity and reliability of data sources used to help determine core
competencies.
• The organization has identified 4-6 major core competencies
as opposed to a long list.
consistent with the organization’s
• The 4-6 core competencies identified appear
reputation, position in the market, and past
performance.
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28. Core competencies - best practices
consistent with the organization’s
• The core competencies are
mission and core business.
• Major processes that are not identified as core competencies and
these are farmed out to contractors/suppliers or partners, as appropriate.
• The organization periodically reviews its list of core competencies to
determine if they are still valid or need to be revised.
• Core competencies identified make it likely that the organization will be able to
accomplish its major action plans or strategies
outlined in the strategic plan.
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29. FAQ’s on relationships between:
Core Competencies
Work Systems
Work Processes
Harry Hertz - MBNQA Director - present 29

30. Core Competencies vs. Strategic Advantages
Strategic Resources &
Relationships
(External)
Core Competencies
(Internal)
• Marketplace benefits/attributes that influence
likelihood of future success
• Frequently sources of success relative to competitors
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31. 10 Critical Questions: Process Management
2. How do your work systems and KEY WORK
PROCESSES (your most important internal
value creation processes) relate to and
capitalize on your core competencies?
31

32. What is a process ?
• ALL WORK is a process.
• EVERYTHING YOU DO is a process.
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33. The Nestcafé Process
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34. The Starbucks Process
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35. Why process ?
Procedures
Methods Products
People
Services
INPUTS Skills PROCESS OUTPUTS
Information
Training
Knowledge Paperwork
Information
(including specifications)
A PROCESS CONVERTS INPUTS INTO OUTPUTS
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36. NASA process
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37. NASA process levels
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38. Why Process Management ?
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39. Why Process Management ?
Moving from Functional to Process View (Westin Hotel)
Reservation Process
Sales & Marketing
Sales & Marketing
Food & Beverage
Food & Beverage
Check-in Process
Front Desk
Front Desk
Check-out Process
Food Preparation
Process
Food Delivery
Process
Functions drive Processes are Processes drive
the business acknowledged, but the business
function dominate
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40. Why Process Management ?
Example of Core and Sub-Processes (Westin Hotel)
Westin Core Processes
Rooms Events Outlets
Customer
Check- in Reservations
Acquisition
Check- out Scheduling Food Preparation
Room Services Food Preparation Food Delivery
Housekeeping Room Setup Room Setup
Presentation/KTS implementation/ Eckes for APQC 2006 40

41. First step in mapping process – SIPOC diagram
Car Dealer Example
Suppliers Inputs Process Outputs Customers Requirements
 Manufacturer  Cars  See Below  New Client Account  Car Buyer  Color Selection
 Supplier  Option Packages  Paperwork to State  Dealership  Build to Order
 Gas Station  Fuels for Cars  Paperwork to Dealer Owners  Paperwork filed
 Wash Center  Car Washes  Paperwork to  Department of within 24 hours of
 Printer  Car Needs Worksheets Manufacturer Motor Vehicles Car Purchase
 Payment  Service  Cashier Check or
 Service Contract Department Money Order
 Service Notifications
Understand Present Options Agree on Sign Paperwork
Meet with Client Needs to Client and Options, Price, and Hand Over
New Client in New Car Test Drive Cars and Delivery Keys/ Title
Date
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42. Second step in mapping process – flowchart
A. Determine the boundaries
B. List the steps
C. Sequence the steps
D. Draw appropriate symbols
E. System model
F. Check for completeness
G. Finalize the flowchart
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43. Process mapping - best practices
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44. Process mapping - best practices
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45. Process mapping - best practices
No
Receives AlertFind and Arrive at scene Does Direct Security Does Does Complete
Call taxi
911/CER Yes
Medical
calls into SCC to indicate if and assess Communication impacted person require Yes impacted person have No Remain on Emergency
Team
and Go to
B available. If available to condition of need to be Center that 911/ nonambulance transportation someone who is a nonblue cross scene till Medical Report and
give out A
respond, obtain details of impacted person called if CER should be for further medical employee who could come pick ride arrives route to Corp Safety
voucher
event such as location, etc and treat hasn’t? called attention? them up? Coord.
No End Yes
· Arrive at scene
· Direct CER if called to the Is Does
*Applies typically
Contract-First Does Call taxi and
Security*
site, and stay until they leave this Med impacted person
Contract
responders are impacted person give out
· No Was No Yes
to Eagan
CPR and first-aid Assist medical team if Emerg occur- require nonambulance have someone who is a No
C present 911/CER nonblue cross employee
voucher and
trained ing during transportation notify Security
· Perform crowd control if called? who could come pick
business for further medical Communication
necessary them up?
· Gather data for the event and hours? Yes attention?
Yes Notify Security
report back to SCC End No Yes
Communication
Obtain: Wait for resolution.
Call 911/CER
· Name of impacted person if Complete gathering
available information from the
· Name of reporting party reporting party, contract
· Call back # and office # of the security and medical team
reporting party 01.03.1.2 and document in the
Med Emerg Medical Injury Report form
Description of the event from the Eagan
reporting party Where is the indicating if person was
Security Communication
list? Needs to transported
be formalized Does
impacted call 911/CER
Center (SCC)
Go to Impact
Eagan Begin to fill out Is party exhibit any of the Business on
Receive Is the Yes
Campus the Medical this Medical symptoms/injuries on the list that 01.03.1.1
notification of an location District Yes
Injury Report Emergency occurring may require 911/CER? e.g. Go to
event type- Office, Eagan Campus,
form with the during BCBSMN · Severe breathing B Instruct reporting party help is on the
medical or Northern
reporting party business hours? · Shortness of breath way-
emergency Campus?
on-line. · Chest pain · Medical team has been called
Notification may be · Signs of stroke
received via: Northern
Dispatch Medical · Request not to move the
District Team via AlertFind impacted person
· Phone call to Campus
Office No indicating if 911 · Request someone to stand in
security officer in
SCC at X21212 No has been called aisle to direct medical team when
(SCC is available 24 they arrive
hrs) Instruct reporting party help is on the way- · If CER was called instruct
· In person via lobby Go to Go to
· Request not to move the impacted someone to meet them at door
or communication 01.03.1.3 01.03.1.1
ME Northern ME District Is 911/CER No person
center
· Direct Campus Office needed? · If CERS were called request if someone Dispatch
Go to
is available to meet them at door when contract
observation by Yes
C
they arrive. Security
Corporate
Call 911/
Security Staff
CER
Receive Emergency Does
Go to No
Medical Team Report investigation
A investigate Yes End
several days after the need to
Coordinator
event. occur?
Corporate
Safety
No
Receive report from Was
AlertFind after Review report along Does Consult notification
notifying Medical team with AlertFind and medical team Yes filth Yes
indicating which team Incident report if need to be Medical
received
of first report of Go to
members responded requested consulted? Team 01.03.1.1
to the emergency. injury? First report
No of injury
*CER=Community Emergency Responder
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46. 10 Critical Questions: Process Management
3. What are your KEY WORK PROCESSES?
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47. 3 steps to finding your key work processes
STEP 1
A. Based on what your KEY CUSTOMERS tell you, what
does your organization provide them that they VALUE?
B. What are the MAIN PRODUCTS or SERVICES that key
customers expect to buy or receive from you and what are
the PROCESSES that produce each?
C. What are the STEPS FROM the INPUT of materials and/or
information TO the OUTPUT (the product or service)?
D. How would you NAME THE PROCESS for internal
identification?
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48. 3 steps to finding your key work processes
STEP 2
A. Which processes are essential to your
CORPORATE PURPOSE?
B. Which processes COST THE MOST in terms
of time and money?
C. Which processes will HELP YOU COMPETE
in the future?
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49. 3 steps to finding your key work processes
STEP 3
RATE each process using these questions:
A. How central is the process to our organization’s
STRATEGIC PLAN and COMPETITIVE SUCCESS?
B. How central is the process to ATTRACTING NEW
CUSTOMERS and RETAINING EXISTING ONES?
C. Which processes do KEY CUSTOMER feel are central
to their SATISFACTION AND LOYALTY? (And don’t
assume you know the answer. Ask them.)
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50. 10 Critical Questions: Process Management
4. How do you determine the KEY REQUIREMENTS
FOR THESE PROCESSES and what are they?
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51. Process requirements - best practices
• Requirements are identified for all Key Work Processes.
• customer or other
Requirements come from research on
stakeholder needs.
• Asystematic process is used to define
requirements for each process.
• Requirements are checked periodically to see if
customer/stakeholder needs and priorities have changed.
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52. Process requirements - best practices
• Requirements research is through and appears valid.
• Requirements are specific versus generic.
• Requirements appear to drive customer buying
behavior and loyalty when met.
• Requirements for processes clearly link to important
outcomes or output measures.
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53. 10 Critical Questions: Process Management
5. How do you DESIGN and INNOVATE your work
processes TO MEET THESE REQUIREMENTS?
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54. Process design & innovate - best practices
• Systems for communicating relevant information
to product/service design personnel.
• systems are used and have helped improve the design process on specific
products/services.
• Use of cross-functional product/service design and review teams.
• input is sought from diverse sources in the organization early in
the design process when the input will be most valuable.
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55. Process design & innovate - best practices
• Involvement of operations/production
personnel on design teams.
• Thoroughness of design reviews so as to include all
appropriate production/operational variables.
• Link between customer requirements, process
metrics, and standards for production/delivery processes associated with
new products/services.
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56. 10 Critical Questions: Process Management
6. How do you ensure that the DAY-TO-DAY
OPERATION of these processes meets
their key process requirements?
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57. Day to day operation – best practices
• Evidence thatcontrols are in place to ensure that process requirements are met.
• Existence of documentation for key processes where it is required.
• Scope and development of training on meeting process requirements.
• Use of the best technology affordable to ensure process
compliance.
• Deployment of approaches like “lean enterprise” or “six sigma”
where appropriate.
• In-process measures are tracked on a real-time or frequent basis
and fed back to appropriate personnel.
• information fromsuppliers/partners is considered where appropriate to set
process standards and develop controls.
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58. 10 Critical Questions: Process Management
7. What are the KEY PERFORMANCE MEASURES
and IN-PROCESS MEASURES used to control
and improve these processes?
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59. SIPOC Metrics
Suppliers Inputs Process (Billing Process Example) Outputs Customers
• Billing
Department Start Step 2 Step 3 Step 4
•A Staff Step 1 •X
• Customer • Delivered
•B Database Invoice •Y
•C • Shipping Info End Step 7 Step 6 Step 5 •Z
• Order Info Step 8
Input Metrics Process Metrics Output Metrics
• Staff • System Responsiveness
Expertise • Accuracy of order Info • Rework Percentage at Each • Invoice
• System • Accuracy of shipping Info Step Accuracy Quality
Up-Time • Accuracy of Database Info
• Number of Process Steps
• Time to Receive order Info • Time to Complete Invoice • Invoice Cycle Cycle
• Time to Receive Shipping Info • Time to Deliver invoice Time Time
• Delay Time Between Steps
• Number of Billing Staff
• Invoices Processed/Month • Number of Process Steps • Cost per invoice Cost
and Variability 59

60. Measures & metrics – best practices
• Evidence that customer requirements and desires
are reflected in process measures and standards.
• Approach to process control is preventive in nature.
• Use of valid statistical procedures for analyzing process data.
• Use of established and acceptable model for cause analysis.
• Thoroughness and rigor of cause-analysis process.
• Clear linkages between customer requirements, process measures, and
standards.
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61. Benchmarking
Process
Classification
Framework
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62. 10 Critical Questions: Process Management
8. How do you CONTROL the OVERALL COSTS
of your work processes and PREVENT defects,
service errors, and rework?
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63. Process control – Lean Six Sigma
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64. Process control - best practices
• Adequate sample sizes are used for testing to ensure overall
product quality.
• Testing/inspection is performed frequently enough to detect possible
problems.
• Automated equipment is used where possible to remove human error
and judgment from inspections/tests.
• Inspectors/auditors are thoroughly trained
and there are reliability checks on their work.
• Auditors/inspectors are objective and have no incentive to pass poor quality work.
• Auditors/inspectors are given proper authority to do their jobs.
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65. Process control - best practices
• Testing/inspection methods evaluated for effectiveness and efficiency
are
and changed or improved as necessary.
• instruments/tools are calibrated frequently.
Auditing/inspection
• Efforts to minimize inspection and testing by building in more
prevention-based approaches.
• Outside audits/inspections are done, if appropriate, to
supplement internal data.
• Evidence is shown of a prevention-based approach to
ensuring product/service quality.
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66. 10 Critical Questions: Process Management
9. How do you IMPROVE your work processes to
improve performance, reduce variability, and
improve products, services, programs, and/or
outcomes?
10. How are improvements and lessons learned
SHARED with other units and processes to
drive learning and innovation?
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67. Process analysis - เครื่ องมือคุณภาพ 7 ชนิด
กราฟ
(Graph)
ผังและเหตุผล
(Cause & Effect diagram)
ผังการกระจาย
(Scatter diagram)
แผ่ นตรวจสอบ
(Check sheet)
ผังภูมิควบคุม
(Control chart)
ผังพาเรโต
(Pareto diagram)
ฮิสโตแกรม
(Histogram)
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68. Process improvement – best practices
• Process improvement activities are directly linked to goals and strategies
outlined in the strategic plan.
• Use of a consistent model or approach for process analysis and improvement.
• Scope of process improvement activities focus on a few critical
success factors rather than having everyone work on improving their processes.
• Teams or groups used to analyze and improve processes include members that are carefully
selected for their expertise-having everyone participate in improvement teams is
often a disaster.
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69. Process improvement – best practices
• Deployment of a systematic process analysis and improvement model
throughout all parts of the organization.
• Adequacy of training and coaching on use of process improvement model.
• Process improvement is not always a reaction to performance
problems—a preventive approach is preferred.
• Use of outside data on technology, competitors, customer needs, and other
factors to drive process improvement.
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70. Process improvement – best practices
• Consideration of the interaction between processes
when selecting one to improve.
• Alternative models were considered before adopting
an approach to process analysis/improvement.
• Link between process improvements and results shown in Category 7.
• Process improvements implemented in one part of the organization are
systematically shared with others and implemented where
appropriate.
• Systematic analysis of new changing technology as a means
and
for identifying process improvement opportunities.
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71. Process improvement – best practices
• different stimuli used as impetus for process improvement efforts.
Number of
• Use of competitor or benchmark data as stimuli for
identifying opportunities for process improvement.
• Process analysis is used as a stimulus for process improvement.
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72. Back Up
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