Operations Management In Practice.
Process management at FedEx is viewed as a systematic examination of how the actual work of operating a business gets done. This approach, which cuts across divisional, functional, and departmental lines, entails collaborative investigation, anal) sis, and then refinement of the basic processes, activities, and tasks by' which a business
operates. The five core business processes defined at FedEx are (a) providing direction; (b) acquiring and retaining customers; (c) servicing customers; (d) moving, tracking, and
delivering the product; and (e) invoicing and collecting payment. Process management at FedEx is customer-driven. It focuses first on customer requirements to assure that
the process is designed to meet the expectations of the customer. It utilizes analytical techniques to identify high leverage opportunities for standardizing work processes,
as well as for creating opportunities for continuous improvement. Measurement is also important at Fed Ex. The old business maxim, "You cannot manage what you cannot
measure," has been an inspiration for measuring both customer satisfaction and service quality. Measurement is accomplished through the use of process quality indicators
(POls), which measure the outputs of processes, as well as other process indicators, which measure such factors as the quality of the process results, the cycle time of each
operation within a process, and the cost of the process. An example of a POI within the moving, tracking, and delivering the product core process is "the total number of
conveyances (trucks and aircraft) arriving late at Hubs, destination ramps, and destination stations, which is measured on a daily basis at the corporate level."
FedEx recognizes that its future success depends on many factors, including its ability to improve its business processes. It believes that only if it can adopt and fully utilize
analytical business tools, such as process management, to improve operations will it be able to compete against other companies in the marketplace. However, the full utilization of the techniques of process management depends on the motivation and competencies of its front line management. Its managers must have analytical, communication, and decision-making skills, and Fed-Ex provides training to ensure that these managers obtain these required skills.
Several key elements in this definition should be emphasized. Continuous measuring implies that benchmarking is an iterative process with no end. With competition constantly "raising the bar," accepted levels of performance today will not be tolerated by the customer tomorrow. Only through constant monitoring of our performance and that of our competitors will we be able to know where we stand at any point in time. (One of the requirements of the Malcolm Baldrige National Quality Award (MBNQA) is that a firm's performance be benchmarked against other companies.)
Benchmarking means measurement. This can be accomplished internally within the
organization as well as externally with competitors and world-class firms. It is important
for management to be cognizant that benchmarking is not limited only to manufacturing, but can also be applied to the other functional areas in an organization. . "-Benchmarking should not be limited only to direct competitors. Rather it should focus
on those firms or business functions or operations within firms that have achieved recognition as world-class operations. In other words, as Robert Camp states in the title of his b?ok, "benchmarking is the search for best practices that leads to superior performance.