Session 10: Process Analysis and Improvement (Simplified for Easy Learning)

Session 10: Process Analysis and Improvement (Simplified for Easy Learning)

What You Need to Know (Chapter Objectives)

• What is a business process? It's a series of steps to achieve a business goal and create value for customers.

• Why map processes? It helps you see, understand, and improve how things work.

• What are the four main types of Process Maps? Focus on FlowChart, SwimLane, Value Stream, and Line Balancing.

• How do you measure performance? Learn about Productivity and Efficiency.

• What is Business Benchmarking? How companies learn from others.

• What are Lean and Six Sigma? Methods for making things better and removing waste.

• What are the eight major forms of waste (Muda)? Learn to spot and remove them.

Business Processes: The Basics

• A process is simply a series of related tasks done to reach a specific business result, creating value for a customer.

• Types of Processes:

  • Primary Process: Directly creates value for external customers (e.g., making a product).

  • Support Process: Helps primary processes, creates value for internal customers (e.g., HR, IT).

  • Development Process: Works to improve primary and support processes.

• Processes often involve many different teams and people across the organization.

Mapping Business Processes: Seeing the Steps

• Mapping: Drawing out the steps and connections in a process.

• Why Map Processes?

  • Everyone understands the process the same way.

  • Clearly shows where a process starts and ends.

  • Helps measure how much improvements actually help.

  • Makes problems easier to spot and fix.

  • Reveals real issues in how the organization operates.

Types of Process Maps (Simple Breakdown)

• FlowChart Process Map:

  • Looks like: Steps connected by arrows, usually top-down.

  • Good for: Understanding and simplifying any process.

• SwimLane Process Map:

  • Looks like: A flowchart, but with separate 'lanes' for different departments or roles, showing who does what over time.

  • Good for: Seeing who is responsible for each task, especially in complex processes or software-managed workflows.

• Value Stream Process Map:

  • Looks like: Shows the entire journey from raw materials to customer delivery.

  • Good for: Finding delays and waste in the whole value creation process to make sure customer needs are met efficiently.

• Line Balancing Process Map:

  • Looks like: Lists tasks and how long each takes for different functions.

  • Good for: Evenly spreading work among different teams or people to boost efficiency.

Measuring How Well Processes Work

• Key Measures:

  • Quality: How good is it? (e.g., performance, reliability, features).

  • Cost: How much does it cost? (e.g., labor, materials, fixing problems).

  • Time: How fast is it? (e.g., delivery speed).

  • Flexibility: How easily can it adapt? (e.g., changing products, handling different volumes).

• Important Formulas (Don't let the math scare you! Focus on what they mean):

  • Productivity = Outputs / Inputs

    • What it means: How much stuff you get (outputs) for what you put in (inputs).

    • Example: If you make 10 widgets (outputs) using 2 hours of labor (inputs), your productivity is $10 / 2 = 5$ widgets per hour.

    • Units change depending on what you're measuring (e.g., 'cars per person', 'dollars per hour').

  • Efficiency = $100\% \times (\text{Actual Outputs} / \text{Standard Outputs})$

    • What it means: How well you're doing compared to what you should be doing.

    • Expressed as a percentage.

    • If Efficiency is less than $100\%$: You didn't meet the standard.

    • If Efficiency is more than $100\%$: You exceeded the standard!

    • Example: If you actually produce 90 units (Actual Outputs) but were expected to produce 100 units (Standard Outputs), your efficiency is $100\% \times (90 / 100) = 90\%$. This means you are 90% as efficient as planned.

Benchmarking: Learning from the Best

• What it is: Finding and using the best practices from other organizations to make your own better.

• Types:

  • Competitive Benchmarking: Comparing with direct rivals (often uses public info).

  • Process Benchmarking: Looking at how non-competitors do a specific process really well.

  • Internal Benchmarking: Comparing different teams or departments within your own company.

• Where to find info: Industry magazines, quality groups, consultants, or even other companies willing to share.

Lean & Six Sigma: Improving and Removing Waste

• Lean Philosophy: Focuses on getting rid of waste and involving everyone in improvements.

• Six Sigma: Uses data to solve problems and reduce variations to make processes more consistent.

• Lean Six Sigma: Combines both for big organizational changes, leading to better costs, less inventory, and happier customers.

Real Results of Using Lean & Six Sigma

• Often leads to huge improvements like:

  • Less inventory (70%-97% reduction).

  • Smaller factory spaces needed (50%-70% reduction).

  • Faster delivery times (50%-95% reduction).

  • Lower operating costs (40%-60% reduction).

  • Higher productivity (10%-100%+ increase).

  • Better quality (30%-80% improvement).

  • Almost perfect on-time delivery and much happier customers.

Six Sigma Overview

• Goals: Understand what customers need, align processes, use data to find problems, and make lasting improvements.

• Belt Designations: Like martial arts belts, showing different levels of training (e.g., White Belt = basic, Champion = executive).

• DMAIC Methodology: A structured way to solve problems:

  • Define: What's the problem?

  • Measure: How big is it?

  • Analyze: Why is it happening?

  • Improve: How can we fix it?

  • Control: How do we keep it fixed?

Lean Focus: Attacking Waste (Muda)

• Lean helps identify waste – anything that doesn't add value for the customer.

• Types of Waste to Deal With:

  • Unnecessary Waste: Can be removed completely.

  • Difficult Waste: Needs creative solutions to reduce.

  • Necessary Waste: Must be managed, maybe by changing how things are structured.

• The Seven Recognized Wastes (Muda) (You need to know these!):

  1. Transportation: Moving things more than needed.

  2. Inventory: Too much stock building up.

  3. Motion: People moving unnecessarily.

  4. Waiting: Time spent waiting for materials, info, etc.

  5. Overproduction: Making too much, too soon.

  6. Overprocessing: Doing more work than needed for the customer.

  7. Defects: Errors or mistakes that need fixing.

  • Eighth Waste: Unused employee ingenuity (not using your team's good ideas).

Lean Tools & Continuous Improvement

• Visual Management: Simple visual cues (like signs or color-coding) to make processes clear and spot waste easily.

• Kanban Systems: Visual signals (like cards) that tell you when to produce or restock something, making things more efficient.

• Continuous Improvement (Kaizen): The idea that many small, ongoing improvements add up to big results over time. Methods include DMAIC and PDCA (Plan, Do, Check, Act).

Quality: What Does it Mean?

• Value Perspective: Quality means meeting customer needs and expectations.

• Conformance Perspective: Quality means strictly following set standards and specifications.

• **Garvin's 8 Dimensions of Quality (Important list!): ** 1. Performance: How well the product/service does its main job.

  2. Features: Extra characteristics beyond the basic function.

  3. Reliability: How consistently it performs without failing.

  4. Durability: How long it lasts.

  5. Conformance: How well it matches design specs.

  6. Aesthetics: How it looks, feels, sounds, tastes, smells.

  7. Serviceability: How easy it is to repair.

  8. Perceived Quality: The customer's overall impression and reputation.

Cost of Quality

• Juran's Costs: Shows that spending money to prevent problems (prevention costs) is better than paying for failures.

• Cost Types:

  • External Failure Costs: Fixing problems after the customer gets the product (e.g., warranty repairs, lawsuits).

  • Internal Failure Costs: Fixing problems before the customer gets the product (e.g., scrap, rework).

  • Appraisal Costs: Costs of checking for quality (e.g., inspections, testing).

  • Prevention Costs: Costs of preventing defects from happening in the first place (e.g., training, process design).

Total Quality Management (TQM)

• Core Principles: Focus on the customer, strong leadership, empowering employees, continuous improvement, and using facts/data for decisions.

The Seven Basic Quality Improvement Tools (Know these names!)

1. Check Sheet: A simple form to collect data.

2. Pareto Chart: A bar graph showing problems in order of how often they occur (80/20 rule).

3. Cause & Effect Diagram (Fishbone/Ishikawa): Helps find the root causes of a problem.

4. Run Charts: Shows data points over time to spot trends.

5. Scatter Diagrams: Shows the relationship between two different variables.

6. Histogram: A bar graph showing how often different values appear in a dataset.

7. Control Charts: Shows if a process is stable and under control over time.

Common Misconceptions about Lean and Six Sigma

• Don't believe that Lean only works for manufacturing, or that "just-in-time" (JIT) means never having inventory. Also, Lean and Six Sigma are not primarily about cutting jobs; they're about making processes better and more efficient.