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Delivering Process Excellence through Process Management

Why is Process Management Important?

Most organizations are trying (in varying degrees), to:
Create compelling new products and service offerings Provide service delivery as defined by Customers Generate attractive returns for Shareholders Ensure they are the best place to work for Employees Operate mutually value-creating partnerships with third party Partners/Suppliers Act with social responsibility

In operating environments characterized by increasingly:

Aggressive competition Discerning, value oriented buyers (consumers, businesses and shareholders!) Mobile, itinerant employees Extended supply chains across multiple organizational functions Complex third-party partner and suppliers relationships, often across numerous cultures, time zones and geographies Tough regulatory and corporate governance requirements

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Lean, DMAIC, & Process Management are most often used for addressing change
These methodologies utilize the most powerful tools in the business improvement tool box today No one method can address every problem. The challenge for organizations is to apply the right method in the right way at the right time to get the required results Our recent survey findings indicate that todays leading firms are delivering results from combining methods that have been adapted to their own specific organizational culture, circumstances and needs Well now provide a brief overview of LSS Process Excellence and each of these core methods.

LSS Process Excellence

LSS Process Excellence is both a goal and an overarching framework to achieve that goal. The approach enables organizations to apply the most appropriate and powerful methods, tools, and techniques to transform and continually improve their performance. Its about achieving improved business results - its not about implementing a methodology!

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LSS Process Excellence

LSS Process Excellence mobilizes the organizations performance transformation and improvement efforts around three key themes: 1. Process leadership 2. Process knowledge

3. Process execution

LSS Process Excellence Framework

Customer Organization
Mission, Vision & Values Strategies & Tactics Process Leadership
Vision

Process Knowledge
Capabilities Architecture Measurement

Organization
Process Results Results

Shareholder

Strategy
Governance

Transformation And Improvement

Culture

Ownership

Process Execution

Regulator

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Six Sigma The Methodology Explained

There are two main types of Six Sigma methods: Six Sigma Improve and Design for Six Sigma

Six Sigma Improve (Classic) Define Measure Analyze Improve Control

Typically used to remove defects and variation in order to improve an existing process

Design for Six Sigma (or Redesign) Define Measure Analyze Design Verify

Typically used to design new processes or redesign existing processes containing numerous defects

Lean Basics Core Concepts

Value Each activity has a value that can be described as value adding, value enabling or nonvalue adding. Target non-value-adding activities for removal, and optimize those tasks which add value to the customer Flow Align capacity with demand and organize the flow of the product so that the process flows at the right speed (Takt) Pull Change the process so that the actual customer orders trigger production or movement in the process - move away from forecasting Perfection Establish a culture with a complete intolerance of imperfection and waste and a desire to seek continuous improvement

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Process Management
Process Management is a system of management that enables process leaders and participants to answer the following critical questions about their business: Whats important to our customers and other key stakeholders? Are our processes fully addressing their requirements? What projects should we be working on and in what priority order? How do we know that our improvement efforts are creating tangible and sustainable value? The purpose of Process Management is to optimize the results from the organizations process improvement initiatives.

Process Management Is A System

Customer Expectations
Service Standards Product Specifications

Service Delivery

Process Design and Execution Feedback Loop Outside in Black Translation Loop Inside in Blue

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The Process Management Methodology

LSS Process Management

Define

Measure

Analyze

Improve Control

Define The process, the value, the process owner, customers, and other key stakeholders Measure The voice of the customer, the voice of the process, map the process, and establish clear measures for both Analyze The gaps between the two, establish scorecards and project opportunity pipeline Improve and Control Processes by establishing a process governance framework

The Define Phase

Define

Measure

Analyze

Improve Control

Objective: The objective of the define phase is to establish the team for the end-to-end initiative, to scope the relevant processes, and begin to understand your customers requirements. Key steps in the define phase:

Process maturity
Beginning the effort Understanding your processes Understanding your customer and stakeholder

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The Measure Phase

Define

Measure

Analyze

Improve Control

Objective: The objective of the measure phase is to create detailed diagrams of your process, collect and validate existing data, and build new metrics as needed. Key steps in the measure phase: Documenting the process Measuring the process

The Analyze Phase

Define Measure

Analyze

Improve Control

Objective: The objective of the analyze phase is to understand the performance of your current process, the key drivers of that performance, and to identify the common failures in that process. This allows you to establish common performance standards for the process. Key steps in the analyze phase: Understanding process relationships Establishing baseline standards Identifying process failures

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The Improve/Control Phase

Define

Measure

Analyze

Improve Control

Objective: The objective of the improve/control phase is to create a system for managing and assessing your processes in a sustainable fashion.

Key steps in the improve/control phase:

Plan for control Manage the scorecard Manage the portfolio of improvement opportunities

It starts with leadership .

Requirements Process Results

Customer Organization
Mission, Vision & Values Strategies & Tactics Process Leadership
Vision

Process Knowledge
Capabilities Architecture Measurement

Organization
Process Results Results

Shareholder

Strategy
Governance

Transformation And Improvement

Culture

Ownership

Process Execution

Regulator

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. and requires a vision of the future process world .

Today s Process World Current process maturity (e.g. all performance related pay is made based on meeting functional, departmental goals)
C D E F B

Company Name Process Maturity Model Date A

Perfect Process World Aspirational Statements (e.g. performance related pay is integrally linked to achieving the end-to-end process (POA) .

Themes (e.g. process leadership) and topics (e.g. end-to-end Process results orientation)

Journey plan with interim checkpoints to enable you to get from todays process world to your perfect process world

. ideally expressed in key metrics .

Customer Acquisition End-to-End Process

Process Performance Today POA

Applications Processed
Sigma Level Unit Cost Customer Satisfaction

10MM
3.2 5% 80%

25MM
6.0 50% >95%

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. with clearly defined roles & accountabilities .

Process Owner Process Leadership Team

Process MBBs Operationalize the process POA by developing a multigenerational plan; Develop and execute end-to-end process measurement plans to ensure robust dashboard data is available for decision making; Support benchmarking initiatives; Manage the end-to-end process project portfolio on a day-to-day basis prepare updates for process review meetings; Align and sequence LSS projects for maximum impact; Expertise in advanced improvement methods, tools and techniques; Quarterly assessments of progress toward process maturity; Day-to-day guidance to improvement teams.

Improvement Teams Refine LSS Project charters and validate the project rationale/value; Select appropriate improvement approach and level of investigation to develop effective solutions; Maintain communication with the process leadership team; Drive projects to successful completion; Provide documentation of team efforts such as progress reports and project storyboards

Establish and lead the process leadership Team; Develop the process POA and journey plan; Regularly liaise with other process owners to ensure that core process linkages and interfaces are understood and aligned; Guide process management implementation; Develop and establish process governance; Make available required resources; Remove barriers to crossfunctional performance; Be a role model display and communicate the critical cross-functional behaviors required for end-to-end process management.

Review process performance using the health of the process dashboard; Monitor and guide development of new scorecards and metrics; Assess progress on closing data gaps; Manage the project portfolio; Enable processes to optimize results such as financial controls, IT support; Manage change activities

.and supported by a reward and recognition system

Drivers of Performance Pay

Overall company performance End-to-end process performance Function performance Individual performance

Before Six Sigma

20% 0% 50% 30%

With Six Sigma

20% 40% 10% 30%

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In Summary There are improvement methodologies that address one or two of these areas: The Program The Process The Project And the People! Process Management integrates all the pieces into a coherent strategy for change

About ASQ and more on this topic

www.asq.org www.asq/org/sixsigma www.asq.org/knowledge-center/

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