Category Archives: Process Measurement and Analysis

Conclusion

Processes exist in every type of business environment, be it manufacturing or service, and the type of processes that are used and how well they perform are directly related to the success of every organization. Managers, therefore, need to understand how these processes work and measure their performance on a continuous basis. An integral part of managing processes is process analysis, which is used to identify weaknesses in the process or areas for improvement For every reprocess there are a multitude of performance measures. It is therefore essential for managers to identify those key performance measures that best provide them with the proper information that will allow intelligent and effective decision making. To be most meaningful, performance measures should be compared with something. Traditionally these comparisons have been made within an organization, looking at trends' over a period of time. Other comparisons were made with industry data that were readily available. More recently, however, companies have begun looking outside their industries in order to find those firms that have the best practices in a particular functional area or in a specific type of process. This policy of seeking out the best of the best is referred to as benchmarking. Proper performance measurement and benchmarking are critical elements for those firms that want to compete successfully in the global marketplace. In such a fiercely competitive environment, where rules are constantly changing and standards are constantly being raised, only those firms that are cognizant of both their capabilities and those of their competitors will survive Managers now recognize that there are many processes that cross functional lines. Process flowcharts and analysis. which were once used solely within the manufacturing function, also can be applied to these business processes. The lessons learned in manufacturing also can be applied in a service environment. Here, however, the customer's direct interaction with the service process must be taken into consideration. This type of analysis of service operations is often referred to as service blueprinting
In an effort to improve processes in terms of both effectiveness and efficiency, business process reengineering often starts from ground zero in redesigning a process. This approach provides an opportunity for new and innovative ideas to be introduced while at the same time taking advantage of the latest state-of-the-art technology that is available.

Issues with Reengineering

In recent year. both manufacturing and service companies have adopted business process
reengineering in an attempt to be more responsive to the marketplace as well as to increase he overall efficiency of their operations, However, very few of these reengineering efforts have been successful. One reason for this is the inability of management to link the reengineering effort to the overall corporate strategy. The result is often a piecemeal approach  here the reengineering program has to compete for scarce resources along with other management initiatives such as total quality management, self-directed work teams. and outsourcing A successful reengineering program must be linked to the corporate strategy of the firm. In other words, reengineering is a strategic issue that must be addressed by the entire organization. at least at the strategic business unit (SBU) level. rather than being viewed as a tactical program, The differences in these two approaches to implementing reengineering are shown in Exhibit 5.13,'1 As with all major projects that require significant organizational changes, the successful implementation of a reengineenng effort is highly dependent upon the commitment and participation of top management.

Work Is Performed Where It Makes the Most Sense

This involves shifting work across traditional functional boundaries, No longer, for example, are all purchases made by the purchasing department. For small purchases, such as office supplies, it may be more efficient to have each department do its own purchasing.

Processes Have Multiple Versions

Unlike assembly lines, which are totally inflexible and therefore can produce only standardized products, reengineered processes have several versions to meet the unique requirements of different market niches as well as individual customers. An advantage of the multiple-version approach is that these processes rend to be relatively clean and simple in comparison to the traditional assembly processes. which are usually quite complex.

The Steps in the Process Are Performed in a Natural Order

With reengineering processes no longer have to be forced into a sequential order. Instead, a natural sequence of events is permitted, based on what .needs to be done next. This allows many jobs to be performed simultaneously thereby reducing the throughput time.