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CHAPTER 5
Process Management
Teaching Notes
This chapter investigates the concept of process and techniques used to design and manage
processes. It emphasizes the fact that it is essential to design products and services to meet customer
Key objectives for this chapter should include:
• To define a process as a sequence of linked activities that is intended to achieve some result,
such as producing a good or service for a customer within or outside the organization.
Generally, processes involve combinations of people, machines, tools, techniques, materials,
and improvements in a defined series of steps or actions.
• To introduce the concept of process management, which involves planning and
administering the activities necessary to achieve a high level of performance in value
creation and support processes, including their design, control, and improvement.
• To teach that cycle time is an important concept in process design, and refers to the time it
Process Management 2
• To define value-creation processes (sometimes called core processes) as those most
important to “running the business” and maintaining or achieving a sustainable competitive
advantage. These processes frequently relate to an organization’s core competencies and
strategic objectives.
• To understand that projects are important value-creation processes in many organizations.
Projects generally cut across organizational boundaries and require the coordination of many
different departments and functions. Project management involves all activities associated
with planning, scheduling, and controlling projects.
• To understand that in manufacturing, process design usually involves detailed technical
analysis of product characteristics, such as technology capabilities, production sequences,
etc., using tools such as flow-process charts, assembly charts, and work methods analysis,
whereas, in pure service environments, processes are often designed around the five key
service dimensions: reliability, assurance, tangibles, empathy, and responsiveness.
• To understand that pure service processes are frequently designed around the five key service
dimensions of: reliability, assurance, tangibles, empathy, and responsiveness. Designing a
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• To define Poka-yoke (POH-kah YOH-kay) as an approach for mistake-proofing processes
using automatic devices or methods to avoid simple human error. It might consist of
designing potential errors out of a process, identifying potential defects and stopping a
process before the defect is produced, or finding defects that enter or leave a process.
• To learn that control is the activity of ensuring conformance to requirements and taking
corrective action when necessary to correct problems and maintain stable performance. The
• To encourage understanding and development of documented control procedures, which are
usually written down in a process control plan, in order to provide a clear understanding of
the appropriate equipment and working environment; methods for monitoring and controlling
critical quality characteristics; approval processes for equipment; criteria for workmanship,
such as written standards, samples, or illustrations; and maintenance activities.
• To explore the concept of continuous improvement which refers to both incremental
changes, which are small and gradual, and breakthrough improvements, which are large and
rapid. Process improvement should be viewed as an opportunity, not simply a reaction to
problems. Kaizen, the Japanese philosophy of quality improvement, may be used in all areas
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to rate and certify suppliers who provide quality materials in a cost-effective and timely
manner.
In addition to the Honeywell FM&T video mentioned above, the Instructor’s Resource website has a
number of Baldrige video clips which give an inside view of organizations that have received the
Baldrige award. Some of those are especially appropriate for this chapter, having scenes that show
how process and supply chain management can enhance an organization’s quest for world-class
quality.
ANSWERS TO QUALITY IN PRACTICE KEY ISSUES
K&N Management, Inc.
1. K&N Management uses innovation and technology to create product offerings that meet or
exceed guest requirements. Guests can access store information and events via Web sites and
social media, as well as through innovative approaches such as EyeClick, an interactive
system at each Mighty Fine location. Feedback is collected with an iPad that administers
2. Customers require high-quality food served quickly and accurately by friendly team
members (K&N’s terminology for their employees) in a clean environment. Thus, the key
purpose of process management at K&N is to meet customer requirements. This is carried
out by designing well-defined processes with clearly-defined requirements and
Building Japanese Quality in North America
1. The processes to support achievement of high product quality at Lexus’ Cambridge, Ontario,
plant start with training workers on the importance of using their skills and knowledge to
make a quality product. Skills are developed via cross-training on various jobs. Knowledge is
Process Management 5
2. The lessons and practices that might be learned and applied to other companies, even outside
the automotive industry include:
• Don’t be stingy with worker training.
• Build visual systems to help workers and managers keep track of progress.
• Design, control, and improvement quality are all important parts of the quality system.
ANSWERS TO REVIEW QUESTIONS
1. A process is a sequence of linked activities that is intended to achieve some result, such as
producing a good or service for a customer within or outside the organization. Generally,
processes involve combinations of people, machines, tools, techniques, materials, and
improvements in a defined series of steps or actions. Examples include: Common types of
production processes include machining, mixing, assembly, filling orders, or approving
2. Several key process-focused practices for quality management include:
• Identify vital work processes that relate to core competencies and deliver
customer value, profitability, organizational success, and sustainability.
• Determine key work process requirements, incorporating input from
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and effectiveness factors.
• Seek ways prevent defects, service errors, and rework and minimize costs
associated with inspections, tests, and process or performance audits.
• Implement work processes and control their day-to-day operation to ensure
3. Process management involves planning and administering the activities necessary to achieve
a high level of performance in a process, identifying opportunities for improving quality and
operational performance, and ultimately, customer satisfaction. Processes typically fall into
two categories – value creation processes and support processes (see answer to question 1,
above).
4. ISO 9000:2000 deals with process management activities (in fact, the entire standards are
focused on an organization’s ability to understand, define, and document its processes.) For
example, one of the requirements is that organizations plan and control the design and
development of products and manage the interfaces between different groups involved in
5. Processes need to be repeatable (the process must recur over time) so that enough data can
be gathered to show useful information. They must also be measurable so that patterns about
the process performance can be made clear. This ability to “predict” performance then leads
6. There are two major categories of processes – value creation processes and support processes.
Four major sub-processes of those categories are: 1) design processes, 2) production/delivery
processes, 3) support processes, 4) supplier and partner processes.
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impact on the strategic goals of an organization. Value creation processes typically include
design, production/delivery, and other critical business processes. The ultimate value of the
product, and hence, the perceived quality to the consumer, depends on both these types of
processes. Support processes are those that are important to an organization’s value creation
processes, employees, and daily operations. They provide infrastructure for value creation
7. In many companies, value creation processes take the form of projects – temporary work
structures that start up, produce products or services, and then shut down. Some
organizations are project-focused because of the nature of their work. They tend to deliver
8. Basically, a “process map” is a flowchart. To develop a process map, AT&T recommends
steps, including:
1. Begin with the process output and ask, “What is the last essential subprocess that produces
the output of the process?”
2. For that subprocess, ask, “What input does it need to produce the process output?” For
9. Once a process map has been created, the following questions may be asked during the
improvement stage:
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• Are the steps in the process arranged in logical sequence?
• Do all steps add value? Can some steps be eliminated and should others be added in order
to improve quality or operational performance? Can some be combined? Should some be
reordered?
• Are capacities of each step in balance; that is, do bottlenecks exist for which customers
will incur excessive waiting time?
• What skills, equipment, and tools are required at each step of the process? Should some
steps be automated?
• At which points in the system might errors occur that would result in customer
dissatisfaction, and how might these errors be corrected?
• At which point or points should quality be measured?
• Where interaction with the customer occurs, what procedures and guidelines should
employees follow to present a positive image?
For example, to determine if a process step has value, more detailed questions may be asked,
such as:
• Would the customer notice a loss of value if this step were eliminated?
10. The fundamental differences between manufacturing and service processes deserve special
attention. This is especially important because support processes are basically services, so
manufacturing firms invariably are also required to become involved in service delivery.
First, the outputs of service processes are not as well defined as are manufactured products.
Another way to think of this is that manufactured goods are tangible, service goods are (at
least to some degree) intangible. Second, most service processes involve a greater interaction
with the customer, often making it easier to identify needs and expectations. On the other
hand, customers often cannot define their specific needs for service until after they have
some point of reference or comparison.
Service process designers must concentrate on doing things right the first time, minimizing
process complexities, and making the process immune to inadvertent human errors,
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11. As customer needs and expectations change, organizations must design processes that are
increasingly agile. Agility is a term that is commonly used to characterize flexibility and
short cycle times. Flexibility refers to the ability to adapt quickly and effectively to changing
requirements. It might mean rapid changeover from one product to another, rapid response to
changing demands, or the ability to produce a wide range of customized services. Flexibility
12. People make inadvertent mistakes for a number of reasons, including the following:
• Forgetfulness due to lack of concentration
• Misunderstanding because of the lack of familiarity with a process or procedures
• Poor identification associated with lack of proper attention
13. Service poka-yokes are designed to prevent two major classes of errors: server errors and
14 Processes control has three requirements: 1) the owner has to have a means of knowing what
is expected of him or her through clear instructions and specifications; 2) he/she must have a
means of determining their actual performance via inspection or measurement; 3) they must
Process Management 10
15. The four components of any control system are (1) a standard or goal, (2) a means of
16. An after action review consists of asking four basic questions:
1. What was supposed to happen?
2. What actually happened?
3. Why was there a difference?
4. What can we learn?
Thus, rather than simply correcting unacceptable events, the focus is on preventing them
from occurring again in the future.
17. Effective process control systems include documented procedures for all key processes; a
clear understanding of the appropriate equipment and working environment; methods for
monitoring and controlling critical quality characteristics; approval processes for equipment;
18. Continuous improvement refers to both incremental changes, which are small and gradual,
and breakthrough improvements, which are large and rapid. Continuous improvement is one
of the foundation principles of total quality. It is an important business strategy in
competitive markets because
• Customer loyalty is driven by delivered value.
• Delivered value is created by business processes.
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include new and improved products and services, reductions in waste and cost, more efficient
19. Real improvement depends on learning, which means understanding why changes are
successful through feedback between practices and results, leading to new goals and
approaches. A learning cycle consists of four stages:
1. Planning
2. Execution of plans
3. Assessment of progress
4. Revision of plans based upon assessment findings
The concept of organizational learning is not new. It has its roots in general systems theory
and systems developed in the 1950s and 1960s, as well as theories of learning from
20. Kaizen, the Japanese philosophy of quality improvement, may be used in all areas of
business to make small, frequent, and gradual improvements over the long term. A kaizen
21. Cycle time refers to the time it takes to accomplish one cycle of a process – for instance, the
time a customer orders a product to the time that it is delivered, or the time to introduce a
new product. Reductions in cycle time serve two purposes. First, they speed up work
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22. Prior to the development of the TQ approach, most U.S. managers simply maintained
processes until replaced by new technology. Japanese managers generally focused on
continually improving products and processes through a process called kaizen. Often in the
West, quality improvement (sometimes mistakenly called kaizen by those who don’t really
understand its philosophy) is viewed as simply making improvements in product quality. In
23. Stretch goals, also called breakthrough objectives, are urgent, short-term goals for improving
24. Benchmarking is measuring an organization’s process performance against that of best–in–class
organizations, no matter what the industry, determining how they achieve their performance
levels, and using the information to improve on the organization’s own targets, strategies, and
implementation. Benefits include:
* The best practices from any industry may be creatively incorporated into a company’s
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25. Reengineering has been defined as “the fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in critical, contemporary measures of performance,
such as cost, quality, service, and speed.” Reengineering’s incremental improvement and
breakthrough improvement are not incompatible, but rather are complementary approaches that
26. Strong supplier relationships are based on recognizing the strategic importance of suppliers
in accomplishing business objectives, developing win-win relationships through partnerships,
27. The purpose for supplier certification programs is to rate and certify suppliers who provide
quality materials in a cost effective and timely manner to their customers.
28. Common practices for suppliers generally include:
• Certified suppliers experience virtually no product-related lot rejections for a
significant time period, usually for 12 months, or in some cases two years.
• Certified suppliers have no nonproduct-related rejections for a stated period of time.
“Nonproduct-related” means mismarkings on a container, for example.
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ANSWERS TO DISCUSSION QUESTIONS
1. Godfrey painfully, but effectively, points out the blinds spots of process management that many
organizations have. The three issues of overscheduling, lack of effective capacity planning, and
unwillingness of departments to work together create costly delays, waste, lost time, and hard
2. Key business processes for sales and marketing could include the process for identifying and
selling products/services to customers and another one for order handling and processing for
repeat sales; supply chain management requires processes for ordering routine and special
Understanding
Markets and
Customers (UMC)
Developing Vision
and Strategy (DVS)
Selling and
Customer Service
(SCS)
Acquiring Materials
and Supplies (AMS)
Managing
Information
Technology (MIT)
Determining
customers’ needs
and wants
Monitoring the
external environment
Responding to
customer inquiries
Evaluating and
selecting suppliers
Planning for
information systems
and technology
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Measuring customer
satisfaction
Managing facilities,
network, operating
systems and
technology
Managing
Movement of
Inventories and
Making Deliveries (MId)
Managing Integrated
Supply (MIS)
Developing and
Managing Human
Resources (DHR)
Managing Financial
and Physical
Resources (MFR)
Managing Quality
Improvement and
Change (MIC)
Receiving/Stocking
Marketing and sales
Managing
deployment of
personnel
Managing financial
resources
Developing and
deploying the
Quality Plan
Controlling
inventory
Acquiring materials
and supplies
Interpreting
personnel policies
Processing finance
and accounting
transactions
Measuring
organization
performance
3. Processes should be repeatable (the process must recur over time) so that enough data can be
gathered to show useful information. They must also be measurable so that patterns about the
4. Some processes that students perform are often included on Personal TQM projects (see
Chapter 1). These might include going to the gym three times per week for exercise, studying at
Process Management 16
5. As can be seen on the flowchart, Figure 5.3 below, the medication administration process
offers numerous possibilities for error at every step. The physician may not write legibly
(probably the most frequent source of physician error), or even specify the wrong drug or
dosage. The secretary may not transcribe the order correctly. The reviewing nurse may
approve an order that is not correct. The pharmacist may not read or interpret the prescription
correctly, or may mix up orders. And the attending nurse may give the wrong medication, or
the wrong amount, to the patient.
A Medication Error Committee at one hospital identified the highest ranked problems that
were deemed to be the most critical in causing severe errors as follows:
• Having lethal drugs available on floor stocks.
To reduce possible critical errors at the point of medication, these poka-yokes could be
applied:
• Remove lethal and excessive drugs from floor stock.
Figure 5.3 Flowchart for Administering Medicine
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6. Researchers have suggested that services have three basic components: physical facilities,
processes, and procedures; employees’ behavior; and employees’ professional judgment.
Designing a service essentially involves determining an effective balance of these
components. The goal is to provide a service whose elements are internally consistent and
directed at meeting the needs of a specific target market segment. Too much or too little
emphasis on one component will lead to problems and poor customer perceptions. For
example, too much emphasis on procedures might result in timely and efficient service, but
might also suggest insensitivity and apathy toward the customer. Too much emphasis on
behavior might provide a friendly and personable environment at the expense of slow,
inconsistent, or chaotic service. Too much emphasis on professional judgment might lead to
good solutions to customer problems but also to slow, inconsistent, or insensitive service.
7. a. Legal Sea Foods designs their process to include major steps of: 1) Supplier specifications
(fresh, local products from government certified beds) carefully monitored. 2) Closely
controlled initial processing (cutting and filleting in an environmentally controlled facility with
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8. This expensive “experiment” of McDonald’s may have violated many of the rules of process
design and/or improvement. It can only be speculated what went wrong without more facts.
Even a basic understanding of Deming’s PDCA model would have provided some protection
against this type of problem, if it had been done systematically. It is unclear what kinds of
market testing were done, but it is not likely that they did an extensive full-scale test of the
9. The billing and service information system at Cincinnati Water Works appears to be extremely
sophisticated and comprehensive for a utility, such as a water department. The technology that
they designed has removed many of the most obvious “hassles” and delays for customers, while
providing the opportunity for extensive productivity improvement for the department. It appears
10. The Circle H “case” problem is designed to give students a “feel” for the types of challenges that
are faced by quality auditors, who must act as “detectives” to determine what problem exists
before they can recommend how it is to be fixed. In this case, there are many questions raised
by the data from the customer survey. The main question in this case is “how to define the
problem.” answers to associated questions are:
Process Management 19
was packed and shipped from the plant, etc.)? What data is available on delivery and restocking
time? Has this changed recently, or was it always “too slow”? What information can be
provided about the lack of availability of preferred items? Was their customer representative
aware that this was a problem? What was done to communicate and handle the problems?
• What internal company information is available from the shipping department on the way the
product is packed before sending the product to the customer? Have customer preferences in
packaging been communicated to shipping?
11. Typically, examinations are a means of control (or appraisal, in quality cost terms). They could
be used as a means for gathering data to discover areas for improvement. An advantage of the
“English system” of examinations is that classroom examinations are separated from
