Process Management-part 1

1. Process Management-part 1 AGENDA Typical Business Management Cycle Corporate Terminology Process definitions Process Classes Business Processes

2. Typical Business Management cycle DRIVES Organization Mission Excellent Organizations have excellent “processes” at every stage in this cycle. DEMANDS DELIVERS DELIGHTS Interested Parties (Stakeholders) Results

3. Corporate Terminology Many a times, employees are either confused or they misunderstand the meaning of commonly stated “Management Words (jargon!)”. May be it is a good idea for us to interpret some of these as below so as to be on a common platform. (--read all and then discuss) Purpose : Why we exist, why we do what we do. Goal : Our intended destination Values : What beliefs will guide our behaviour Corporate Policies: Rules that guide our decisions and actions –the signposts en route (--discuss typical examples) --continued on next slide

4. Corporate Terminology --Continued from previous slide: Mission : Where are we going – the journey Vision : What we want to become Strategy : How we are going to get there (-achieve Mission, Vision) Objectives : What we want to achieve – the results. Measures : What will indicate achievement(Parameters and Indicators) Targets : What we “aim at” to achieve objectives – the levels of results to be achieved.

5. Mission Relationship between Policies--Objectives--Processes Customer(Stakeholder) Needs Objectives Policies Processes Results Customer(Stakeholder) Satisfied

6. So what is a “Process”? “Process” as per Webster’s Dictionary : -- a natural phenomenon marked by gradual changes that lead toward a particular result (e.g. the process of growth) ---a natural continuing activity or function (such life process as breathing) -- a series of actions or operations conducing to an end especially a continuous operation or treatment (e.g. in manufacturing)

7. Process Definitions Juran defines a process as a systematic series of actions directed to the achievement of a goal. In Juran’s model the ‘inputs’ are the goals and ‘required product features’ and the ‘outputs’ are “products possessing the features required to meet customer needs”. Michael Hammer (the coauthor of “Reengineering the Corporation”) defines a process as a collection of activities that takes one or more kinds of inputs and creates an output that is of value to the customer.

8. Process Definitions A process is defined in ISO 9000 as a set of interrelated or interacting activities which transforms inputs in to outputs and goes on to state that processes in an organization are generally planned and carried out under controlled conditions to add value. The concept of “adding value” and the “party receiving” the added value is seen as important in these definitions. This distinguishes Processes from Procedures.

9. Procedures vs. Processes The “Procedural” approach is about doing a task, conforming to the rules, doing what we are told to do. The “Process” approach is about understanding needs, finding the best way of fulfilling these needs, checking whether the needs are being satisfied and in the best way and checking whether our understanding of these needs remains valid.

10. Process Classes There are two classes of Organizational Processes – namely Macro-Processes and Micro-Processes. Macro-Processes are multi-functional in nature consisting of numerous micro-processes. Macro-Processes deliver business outputs and have been referred to as “Business Processes” for nearly a decade or more .

11. Process Descriptions (Referring to policies, standards, guides & procedures) Organization (System) Relationship between Processes and the defining documentation • Mission Management • Resource Management • Demand Creation • Demand Fulfillment Business Process • Plan Production • Produce Product • Deliver Product • Support Product Work Processes Operating Procedures Activity • Set up machine • Make parts • Assemble parts • Test Parts Instructions • Operation 1 • Operation 2 • Operation 3 Task

12. Business Processes For processes to be classified as business processes they need to be in a chain of processes having “the same stakeholder” at each end of the chain. The input is an input to the business and the output is an output from the business. The typical “business process flow” is : customer to sales/marketing; sales/marketing to production/design-production; production to distribution; distribution to customer and customer to your bank (i.e. customer in need to a satisfied customer—end-to-end)

13. Stakeholder’s Needs Intelligence Feedback Satisfied Stakeholders Org. as a set of interconnected processesGeneric System Model • Manage Mission Capable Resources Resources • Manage Resources Capable Resources Engage • Create Demand Products / Services Demands • Fulfill Demand

14. Mission Management (BP1) Determines the direction of the business, continually confirms that the business is proceeding in the right direction and makes course correction to keep the business focused on its Mission (incl. Vision, Values). The business processes are developed within mission management as the enabling mechanism by which the Mission is accomplished. (Owners/Stakeholders at both the ends)

15. Resource Management (BP2) Specifies, acquires, develops and maintains the resources (Physical, Financial and Human) required by the business to fulfill the Mission and disposes of any resources that are no longer required. (Resource User at both the ends)

16. Demand Creation (BP3) Penetrates new markets and exploits existing markets with products and a promotional strategy that influences decision-makers and attracts potential customers to the organization. New product development would form part of this process if the business were market driven.(Customer at both the ends)

17. Demand Fulfillment (BP4) Converts customer requirements into products and services in a manner that satisfies all stakeholders. New product development would form part of this process if the business were “order” driven.(i.e. the order contained performance requirements for which a new product or service had to be designed) (Customer at both the ends) (Participants to review Flow Charts and discuss)

18. THANK YOU