/
Process View Process View

Process View - PowerPoint Presentation

conchita-marotz
conchita-marotz . @conchita-marotz
Follow
381 views
Uploaded On 2016-05-21

Process View - PPT Presentation

amp Strategy Based on the Book Managing Business Process Flow Processes Produc ts or services must meet customer expectations physical comfort safety convenience psychological ID: 329528

product process customer flow process product flow customer quality cost time customers high performance production operations unit competencies systems

Share:

Link:

Embed:

Download Presentation from below link

Download Presentation The PPT/PDF document "Process View" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.


Presentation Transcript

Slide1

Process View

&

Strategy

Based on the Book: Managing Business Process Flow.Slide2

Processes

Produc

ts

or services must meet customer expectations;

physical

(

comfort

, safety, convenience),

psychological

(relaxation, peace of mind),

social and spiritual

;

and they must do so within a

budge

t

.

Business processes provide products and services

: new car financing, producing an engine, making a hamburger, delivering a book from Amazon to a customer, teaching a course.

How do organizations

categorize customer expectations?

How

do they

develop

processes

capable

to

fulfill

customer expectations?

What

Metrics

are used to

measure? Slide3

Process

view

Process view: any organization or any part of an organization is

Input  Process  OutputInputs: tangible or intangible items that flow into the process from the environment: natural or processed resources, parts and components, energy, data, customers, money, etc.Outputs are any tangible or intangible items that flow from the process back into the environment: products, energy, information, served customers, cash, etc..

Raw

material

 Manufacturing Process  Finished goods

Data  Accounting Process  Financial Statements

Accounts Receivable  Billing Process  Cash

Unsatisfied customer demand  Transformation Process  Satisfied customer demandSlide4

Five Elements of the Process View

Outputs

Goods

Services

Human & Capital

Information

structure

Network of

Activities and Buffers

Inputs

(

natural or processed resources, parts and

component

s

, energy, data, customers, cash, etc.)

Resources

Process

Management

Flow UnitSlide5

Flow Unit: The Item to be analyzed

A flow unit may be a unit of input, such as

a

customer order, or a unit of output such as a finished product, or the value of input or output.

Process

Flow Unit

Input-Output Transformation

From

To

Order fulfillment

Orders

Receipt of an order

Delivery of product

Outbound logistics

Products

End of production

Delivery to customer

Supply cycle

Supplies

Issuing a purchase order

Receipt of the supplies

Customer service

Customers

Unsatisfied customer

Satisfied customer

Product R&D

Projects

Recognition of the need

Launching the project

Cash cycle

Cash

Expenditure (costs)

Collection of revenueSlide6

Systems approach

Sub-optimization

System: A set of parts with interrelationships between parts organized to achieve a goal.

The whole is greater than the sum of the parts. 2 > 1+1.

How systems grow?

Principle:

Performance measure of Sub-systems must be linked to the performance measure of the total system. Performance of a sub-system must be measured in terms of its impact on the performance of the total system

Systems

approach and; Sales, Purchasing, and

Production.

A serial system with two stations. Slide7

Systems-Thinking

We do not have questions on these videos in our quizzes. You may watch them at your own will.

Deming-

Ackoff

on Systems Thinking in EducationThree truth about Systems ThinkingSlide8

Product Attributes & Process Competencies

Product Attribute (External)

Process Competency (Internal)

Price

Cost

Response time

Flow time

Variety

Flexibility

Quality

Quality

Customers

Define

product

a

ttributes

.

Operation Managers

Create

process

c

ompetencies

to meet

and exceed

c

ustomer

e

xpectations.

Slide9

Product Attributes

Product Price (cost for customer):

purchase

price

, service, maintenance, repair, insurance, and disposal costs. Total cost of ownership. Product Delivery-response time: total time before receiving the product. Is the product on shelves, in a distribution center, or somewhere along the production line. Reliability in response time? Low standard deviation. Product Variety: the choices offered to the customer: At a lower level; options offered for a particular model, colors, styles. At a higher level; number of product lines and product families

.

Product Quality:

the degree of excellence, how well the product works. Features (what it can do), Performance (how well it functions), Reliability, Serviceability (how quickly), Aesthetics, Conformance to expectations.

Reliability in quality?

Q

uality over time; consistent quality. Slide10

Customer Value Proposition

:

a set of benefits (in four dimensional space)

that the firm offers to customers.

Order Qualifiers: Characteristics that convince customers to consider the product. Order Winners: Characteristics (in four dimensional space) that convince customers to buy the product. They differ among market segments. Commercial airplane vs. private jets. Customers purchase based on the value they derive from a product. It is the greatest amount a customer is willing to pay (the reservation price). If this value > price, the customer enjoys positive net value (consumer surplus). Customers will buy the products that offers highest consumer surplus.Zara's business is design/manufacture/distribution/retailing. Zara differentiates itself by

timely fashion for the masses.

CVP

timely yet limited variety at modest cost and quality.

Customer Value PropositionSlide11

Process Competencies: Cost

Process cost:

the total cost of producing and delivering outputs.

Remove non-value adding

activities and buffers (Business Process Re-engineering). Allocation of appropriate recourses. Lower than appropriate is cheap, but quality goes down. Higher than appropriate, adds to the costs. High utilization. Division of labor. High standardization. Low variations.

Henry Ford

Shouldice Hospital

in Canada, focus on hernia operations only. Standardized repeatable outpatient surgical procedure, very high quality at a low price. Do not accept patients with any risk factor (blood pressure, allergic, ..)

P

eople of India are vulnerable to cataracts. Millions go blind in their 50s.

Aravind

eye hospital started by treating paying patients and using the profits to offer free care to

the

poor.

To support patients who could not afford transportation and required aSlide12

High Utilization, Standardization, Low Variations

relative

to accompany

them,

Aravind also added its own buses and a group of assistants. To keep costs low, surgical equipment is used all day, doctors focus only on performing surgery, pre- and post-operative care handled by nurses. Aravind served 2.5 million outpatients and performed 3 hundred thousands cataract surgeries in less than one year. Despite providing 2/3 of the outpatient visits and 3/4 of the surgeries as free service to the poor, Aravind generated healthy profits that it used to fund its growth. The key concept in lowering production cost is to allocate appropriate recourses to each operation. Appropriate? Lower than appropriate is cheap, but quality goes down. Higher than appropriate, adds to the costs. Slide13

Process Competencies: Cost Flow Time

The

cataract surgery at Aravind, the hernia surgery at

Shouldice

are example of implementing Ford Production line in healthcare.

Process flexibility:

How Chevrolet got Ford.

the

ability to produce and deliver a variety of products at high and low production volumes.

cross trained workers + general purpose equipment + short set-up time + delayed differentiation, Job-Shop layout or U-shaped layout + small batch size.

Process quality:

How Japanese got US auto industry.

the ability to produce and deliver quality products. Effective design as well as production that conforms to design. Quality at the source. Slide14

Process Competencies: Flexibility, Quality

Process flow time:

the total time to transform a flow unit from input into output. Effective layout and smooth material flow. Remove variability in arrival rate, processing rate, and quality. No starvation or blockage. No defect and re-work.

If I am forced to define Operations Management in one line

 Create a Smooth Flow. Smooth flow means (i) low cost production cost because flow units do not have time to collect cost, (ii) high quality because as soon as quality problem is observed, we must stop production, i.e., no smooth flow, and (iii) system is flexible because we do not have too much inventory and can easily respond to technological advances and changes in customer preferences and switch to new products. Slide15

Process Competencies: Flexibility, Quality

Corolla

:

flow shop, decentralized assembly plants close to market, short flow time, low cost.

Ferrari: job shop, only a single plant in Italy, longer flow time, high cost. McMaster-Carr: a materials, repair, and operations (MRO) product distributor, a process with high flexibility, high quality, short response time, but at a high priceWalMart: Operations Strategy: Short flow times, low inventory.Operations Structure: Cross docking, Electronic Data Interchange, Fast transportation system, Focused locations, Communication between retail stores.Inventory turns at retail stores:

Wal-Mart

: 9

times, Target

: 6

Sales per square foot: Wal-Mart:

$

425/

sqf

, Target: $270/sqfSlide16

Operations Management

Operations management

Structure the

process

competencies in the direction of the customer value proposition. Develop measures to evaluate

the effectiveness and efficiency of the processes.

Apply methods and techniques to

improve process performance.

By measurement we find the relationship between controllable process competencies and desired product attributes, and will be able to set appropriate performance standards.

Financial performance measures

External performance measures

Internal performance measuresSlide17

Process Competencies: Flexibility, Quality

If I am forced to provide another short definition for Operations Management

OM is the concepts, ideas, methods, models, and the whole body of knowledge to understand trade-offs.

If

I am forced to provide

still another

short definition for Operations Management

OM is the concepts, ideas, methods, models, and the

whole

body of knowledge to

remove variability.

OM is the concepts, ideas,

methodologies,

models, and the whole body of knowledge to

create a smooth flow, understand trade-off, and remove

variability. Slide18

The

advantages of process view are

a

. It can be adopted at a very broad level, such as the supply chain, or at a very micro level, such as a workstation in both manufacturing and service organizations.

b. By incorporating buffers, accounts for handoffs or interfaces between different activities-typically the areas where most improvements can be made. c. Identifies value added and none-values added points, and enables managers to improve the process and add value at every step. d. Represents any organization as a collection of interconnected processes where its success requires alignment of effort across all its processes. *e. All of the above Process View Systems View