Process Management

Process Hierarchy

Senior M a na gement O w ned

Enabling Processes do not directly impact the customer. They must exist to enable and support the execution of the core processes.

Enabling Processes

Core Processes

A Core Process is directly related to generating revenue, providing services to the customer or creating a strategic advantage for the company.

PM Summary

M iddle M a na gement O w ned

PM Summary

Process M ember a nd Process O w ner Responsibilities p

Process A

Process B

Process C

Process D

Process E

The many detailed activities, tasks and decisions involved in satisfying a process output y g p p

Processes are classified as either core processes or enabling processes. A core process is directly related to generating revenue, providing products or services to a revenue generating Customer or creating a strategic advantage for the company. yp y y processes in a company and they are made up of various major p y y p j Typically there are only 4 to 6 core p processes and sub-processes. Typical core processes are sales and marketing, manufacturing/fulfillment, design engineering, order entry and processing, etc. As you can readily begin to comprehend, these are large processes that many departments contribute to. Enabling processes exist to enable and support the execution of the core processes. A core process could not sustain itself without the support and services provided by the enabling processes. Typical enabling processes are Information Technology, Human Resources, Finance, Legal, Documentation, etc. Enabling processes do not touch or directly impact the external Customer Customer. A part of Process Management is to identify those processes and process steps which are critical to the success of these higher level processes. Metrics are generated to either monitor or control the performance of these processes. Because the processes are critical to success, the associated metrics are tracked on a periodic basis in what is called a Process Management Summary report. The Process Management Summary is most often owned by middle management and is a simple aggregation of the key inputs and outputs of each critical process. You will learn later that the metrics you will want to track are called C iti l Xs and significant Ys or CTQs. ll d Critical X d i ifi t Y CTQ The Critical Xs and significant Ys actually exist as part of the sub-processes and their numerous process steps. These consist of the many detailed activities, tasks and decisions involved in satisfying a process output. These processes are owned by the members of the process and their immediate manager, this BCL Business Improvement Adapted from OpenSourceSixSigma

Process Management
Process Hierarchy (cont.) person is usually referred to as the Process Owner. A Process Owner is a person who manages the process end-to-end to ensure optimal overall performance, someone who coordinates functional/cross-functional activities at all levels of a work process, a person who has the responsibility to approve changes in the process and a person who sponsors improvement efforts (teams). A Process Member is a person who is a key contributor or supporter for the successful completion of the deliverables from the process. It is important for you to understand that the core processes are made up of major processes which are then made up of sub-processes. Some but not all of these sub processes are critical to the success of sub processes sub-processes the business. In an ideal world we would immediately know all the critical processes. In reality we discover them either systematically or because it is obvious they are causing problems. Many people who have learned to think of processes tend to see process in terms of departments or functions. This is referred to as the Silo or vertical view of process flow. Value actually flow horizontal across the many silos of a company, in other words, core processes expand horizontally across the company. Process Management Value Stream Just as the graphic depicts, efforts are usually stove-piped and without conscious effort or thought about how value flows through the organization the stovepipes simply get taller and more ridged. This is counter to the efficient and effective running of a business.
Process M a na gem ent is configuring a nd coordina ting core a nd ena bling business processes to a chieve the goa ls of the orga niza tion a nd to repea tedly a nd consistently deliver results a nd va lue to customers.
Organization Organization
Vision & Mission Vision & Mission Goals & Objectives Goals & Objectives Strategies & Tactics Strategies & Tactics

Core Processes

Value Stream Flows Horizontally

Strategic Alignment
Usually Stove-piped

This is where Process Enabling Training Finance IT Management can Processes make a significant Accounting g HR difference. Process difference Management is all about creating a framework and an actionable effort aimed at configuring, coordinating and aligning both core and enabling business processes to achieve the goals of the organization. Process Management creates the insight to see how value flows across the various stovepipes or functional organizations of the company. Key inputs and outputs of these value creating and supporting processes are identified, and their performance or capability is characterized. The organization can see how outputs of one process become inputs to another process, until, finally, an output to an external Customer is made.

BCL Business Improvement

Adapted from OpenSourceSix

Process Management
Building a Process Management System A Process Management system is built one process at a time. You will use this five step process as a part of your workplace assignment. The ability to better manage your processes starts when you or a workgroup first identifies its key processes. A key process is defined as a process that is important to the success of the business or the Customer and/or is in need of immediate improvement to alleviate a business problem.
3 . Build the Process M a na gem ent System.

Process Management occurs when work groups identify their key processes and then create a system for managing each process. Process Management will provide a clear picture of how you develop, produce and deliver your products and services.
1 . W ha t processes do I w ork in or ow n?

Using the selected process characterize and Using the selected process characterize and structure the process to improve its structure the process to improve its efficiency, effectiveness and adaptability. efficiency, effectiveness and adaptability.
P ro c es s A

P ro c e s s F lo w
P1

S te p

In d ic a to r

P2

P3
1

P4

P5

P1 P2 P3 Q1 P4

4 . Tra ck a nd ma na ge the process.

Using aaProcess Management Summary Using Process Management Summary periodically review the performance of the periodically review the performance of the process and take necessary actions. process and take necessary actions.
P rocess

Processes Processes 1.___________ 1.___________ 2.___________ 2.___________ 3.___________ 3.___________ 4.___________ 4.___________ 2 . W hich process should I focus on first? W hich of these are the most important to our W hich of these are the most important to our customers (internal and external) that are in customers (internal and external) that are in most need of improvement based on the most need of improvement based on the VOC, VOB and VOP? VOC, VOB and VOP? Selection Criteria
Process 1 2 3

On w er

S tep

P erform a n ce

T et arg

T rend

Lin T ks o:

C stom u er

Imrovem p en tA ctivities

C m ts om en

S g ortin

Jon s e

P 1

4.2 %

1.3 %

M eI4 erg

S ith m

N e on

5 . Pick the nex t process to improve. Pick the next process identified from the Pick the next process identified from the selection tool and perform stepss 1throughh4. selection tool and perform step 1 throug 4. Continue until all selected process are Continue until all selected process are included in the Process Management System. included in the Process Management System.

Rank

Process Management Summary Process Management is all Process M a na gement provides a systematic about your ability to better approach and knowledge about the true workflow manage the behavior and while helping prioritize improvement efforts. performance of your processes. Process Management provides Benefits: a systematic approach and 1. Creates indicators to help manage objectively knowledge about the true 2. Focuses on the needs of the customer, the process and the workflow allowing you to business achieve improvement efforts. 3. Provides a structure for the continuous monitoring of an The benefits include: Process organizations capability to meet customer requirements indicators to help manage p priorities 4. Establishes work improvement p objectively, objectively creates a focuses 5. Provides a common language within and across on the needs of the customer, departments the process and the business, 6. Links together all process activities so the team can better provides a structure for the understand and perform the necessary work continuous monitoring of an 7. Maintains the gains achieved by problem-solving teams organizations capability to meet and process redesign teams customer requirements, establishes work improvement priorities, provides a common language within and across departments, it links together all process activities so the team can better understand and perform their work and maintains the gains achieved by problem-solving teams and process redesign teams.

BCL Business Improvement

Adapted from OpenSourceSixSigma