processes and performance

Winning at lean using process understanding

Processes and Performance

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What is a Process?

Look around you right now. Consider the objects in the room where you are. How did they arrive there?

What was involved in producing the items around you? Who made them?

What about the services that you use every day? What is involved in getting the end product of that service to you?


Many things around you involve processes and operations

PROCESS The complete chain of events that takes place when

manufacturing any product or providing any service to a customer.

OPERATION One or more processes that go towards meeting the

needs of an end user.


Know your process

How do you run a process that meets the exacting needs of the customer, yet costs less, runs faster with less waste and all at the same time?

How well do you know what actually happens in your processes?

Or are you trying to improve a process that you don’t fully understand?

Learning Objectives

Understanding your process is the first step in improving it, and that’s a fundamental skill you should have. By the end of this presentation you should be able to:

Relate the terms process, input resources, outputs and operations to different manufacturing and services organisations.

Use a framework for depicting and analysing processes called the “Transformation Model”.

Determine the performance of a process using a tool called the performance diagraph.

Use a tool called a S-I-P-O-C diagram to quickly capture the essential features of a process.

. ...so let’s begin on your journey to your lean operation!


Transformation Processes

INPUTRESOURCES

Adds VALUE to INPUT

RESOURCES to create OUTPUT

PRODUCTS AND

SERVICES

OUTPUT PRODUCTS

AND SERVICES

By looking at the quality of the resulting product or service we can modify the quality, quantity and source

of the input resources. We call this information flow feedback.

Any process takes input resources and transforms them into products or services that somebody needs by a sequence of process steps. The process to “add value” to the input resources we call a transformation process.


Processes can be found everywhere

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INPUT OUTPUTPROCESS

An ice cream manufacturing process takes ingredients and facilities and produces finished ice cream products.

A shop selling the same ice cream also has a process with inputs and outputs.

All operations, if you look hard enough, contain a transformation process.


Types of Input Resources

The three main types of input resources that may be transformed in a process are:

o Materials that become transformed into finished goods or used in providing services.

o Information that is used, passed on, or turned into information products (like television programmes, or this e-Learning unit).

o Human – the people who are involved in or pass through a process in some way expecting to receive a benefit from it.

OUTPUT

Human

Material

Data PROCESS

Feedback


Types of Input Resources

OUTPUT

Human

Material

Data

Energy

Know-

How

Facility

PROCESS

Feedback

Knowledge of the Ice cream recipes.

The electricity required to power the freezers.

The factory buildings and equipment used to make the ice cream.

Energy

Facility

Know-How

Human

Material

Data

Physical Facilities

Know How

Energy

In some processes there may be other inputs that may not be quite so obvious.

By understanding what the inputs to a process are we know some of the things we need to change to make the process cheaper, faster, or more efficient.


Transformed and Transforming Resources

Transformed resources Those that undergo some type of change in the operation to produce the goods or services.

Transforming resources Those that are used to perform the change process on the transformed resources.

Raw Materials

Customers

Patients

Information

Machinery

Factory Operators

Service Workers

Energy

Facilities

PR

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It is useful to be able to distinguish between two main types of input resources.

At any time a process will have transformed resources which are worked on by transforming resources.


The Process of Transformation

INPUT

PROCESS OUTPUT

Feedback

The inputs to a process will always be acted on by a number of process steps. We use the term transformation to describe this. The process of transformation simply means that the transformed input resources have undergone some type of change.

All manufacturing processes involve changing the form of

something (materials or components) into something

useful to the customer.


Types of Transformation Process

Type Transformation Process

Form A manufacturing process transforming materials into finished goods.

Ownership An estate agent office transferring ownership of a house from one person to another.

Location A shipping office moving a shipment from one location to another.

Storage A library taking in returned books and keeping them up to date until they are re-loaned.

Purpose A recycling centre transforming waste products into raw materials that can be reused.

Physiology A hospital outpatients department treating sick patients.

Psychology A natural therapy practice transforming stressed patients into relaxed ones.

Here are some examples of different types of transformation:


Outputs from a process

INPUT

PROCESS OUTPUT

Feedback

The main outputs from a process are the products or services that were intended. These can be physical goods, documents, knowledge, a person's health status, or even an altered state of mind!!

An item of new clothingA food itemA jet engine

A legal contractA tap dancing diploma!

A healthier pet!

A good time at the cinema!

In fact pretty much everything is the output of some type of process.We challenge you to think of anything, yes anything! that is not the end result of some input resources and a transformation process.


Outputs from a Process

Patient’s with unhealthy teeth are transformed into patients with healthy teeth.

Motor car servicing process transforms poorly performing motor cars into well performing motor cars.

Some processes have one primary process output, whereas others may have more than one output. Some outputs are tangible, while others are less so.


Secondary Outputs

INPUTS OUTPUTSPROCESS

Feedback

By-Products Outputs that result from

the process that are often useful for purposes other than the intended one.

Waste productsOutputs that result from the process that are less

desirable than the intended ones.

Processes sometimes produce outputs that were not the ones desired by the customer. It is important to recognise these.

Waste products and by-products often occupy a lot of the operations managers time. Either in trying to minimise them or find other uses for them.


TYPES OF PROCESS

PrimaryProcesses

Service or Production

Tasks

Support Processes

Internal orExternal

Tasks

How Operations Differ

What passes through your process, “things” or people? Many processes deal with both. Even though ice cream manufacturer’s make and distribute ice cream products, they would also have customers to provide a direct service to if they also sold product at their own retail outlets

External processes have external customers, but

some processes can serve “internal” customers from

within the organisation. An example of an internal

process would be the steps involved in hiring

new staff.

There will usually be one primary transformation process

of your operation. In an ice cream factory, the primary

operation is the production and distribution of ice cream

products.

Support processes enable the primary processes to function but are not in themselves part of the chain of events involved in the primary processes. An example of a support process would be the ice cream company’s finance or quality control department”.

It is useful to know the ways in which operations differ from one another.


How Operations Differ

Scale of Operations.

Motor manufacturers such as Ford or Toyota have complex operations with many plants. Bristol Motor Company in the UK produce custom made motor vehicles to individual order from a single factory.

Number of different

services/products produced.

Airline operator EasyJet, in the United Kingdom, specialise in standardised low cost air travel without the extras. British Airways have a range of different services for Standard, First and Business Class Customers.

Where the customer is

involved in the process.

Hewlett Packard build a limited number of models of computers to specific market needs. Dell allow the customer to make design decisions by creating any specification using a wide range of standard components.

Improving a process first means understanding it fully....

And how it differs from other processes.....


ICE CREAM PROCESS

OUTPUTSINPUTS

MACRO PROCESS

RAW MATERIALS

BLEND CONDITION FREEZING FILL/FORM

PACKING &FREEZE

Micro and Macro Processes

Micro Processes

Micro Processes

CONDITIONING

STEP ONE

STEP TWO

STEP THREE

The overall transformation process can be described as a macro process within the macro operation, and the more detailed transformations within this macro operation are micro processes

Many processes when viewed at high level are made up of other smaller processes. We need to understand where to draw the boundaries of the processes we need to improve.


INPUT RESOURCES OUTPUTS

Primary and Support Processes

OPERATIONAL PROCESS

PRIMARY PROCESSES

SUPPORT PROCESS

SUPPORT PROCESS

SUPPORT PROCESS

OPERATIONAL PROCESS

OPERATIONAL PROCESS

FINANCE

ENGINEERING

HUMAN RESOURCES

SECONDARY PROCESSES

Processes that work on the transformed resources that eventually get to the customer are called primary processes. The sequence of events involved in mixing ingredients, and forming and freezing them in an ice cream factory is an example of a primary process.

This understanding allows us to focus on the right part of the operation, and in turn improves the process that contribute best to the business operation.


The Simple Input – Process – Output Diagram

INPUT – PROCESS – OUTPUT DIAGRAM

THE PROCESS INVOLVEDINPUT RESOURCES

OUTPUT GOODS OR SERVICES

CreamSugarVanilla Flavour

Packaging

Mixing EquipmentFreezing

Equipment

Recipe Information

50g Vanilla Ice Cream

Tubs

100g Vanilla Ice cream

tubs

Waste process water

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Freezi

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Form

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Past

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Hard

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Pack

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FORM & PACK LINE

.

The diagram simply lists all of the transformed and transforming input resources on one side of the chart

All of the output products or services are listed on the right hand side.

Then the process steps are listed or drawn in the middle.

A useful tool to learn is the Input – Process - Output (IPO) diagram - a high level “snapshot” view of what a process looks like.


INPUT – PROCESS – OUTPUT DIAGRAM

THE PROCESS INVOLVEDINPUT RESOURCES

OUTPUT GOODS OR SERVICES

Try an I-P-O Diagram Yourself

Draw or list the high level steps in the process in the middle section.

The main outputs of an operation are easier to determine.

List the Input Resources.

Classify the Input Resources. Which ones are transforming resources, and which ones are transformed?

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You can make your own template like the one here. Alternatively download a template from www.plusforge.com.


Completed I-P–O Chart

How did you get on? How does your diagram compare to the one shown here?


Suppliers and Customers

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OPERATIONS ENVIRONMENT

Most inputs to a process originate from external

suppliers beyond the operation.

Some outputs from the process will go to internal customers and some may go to external ones.

Sometimes we need to look beyond the boundary of our own business or environment and consider the inputs that come from outside. We should also consider our customers. How do they experience the end results of the process?


The SIPOC Diagram

Suppliers

•The suppliers are the individuals, departments, or organisations that provide the materials, information, or other transformed resources that are worked on in the process.

Inputs

•The inputs are the information or materials provided by the suppliers.

•Inputs are transformed, consumed, or otherwise used by the process.

Process

•The process is the steps or tasks that transform the inputs into outputs: the final products or services.

Outputs

•The outputs are the products or services that result from the process, and the important requirements that the customers need.

Customer

•The customers are the individuals, departments, or organisations that receive the outputs, the products or services, generated by the process.

We can extend the IPO process to become a SIPOC diagram. So for each input we list its origins, and for each output its customer.

The end result of a process may be a customer within or outside the organisation, and as we have seen is likely to be part of a wider process.


Feedback from Customers to the

Operation

Feedback to the Suppliers from the Operation

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OPERATIONS ENVIRONMENT

Process Feedback

Just like before, feedback information is used to control the process, by adjusting the timing, quantity, quality or cost of input resources and regulating the processes that are used to achieve desired outputs.


Inputs

The SIPOC Diagram

What is it used for?o Quickly and easily capture the current or "as is" state

of the processes in question. o Allows the team to review all the processes in a way

that they can easily see what is currently understood or unknown in a process.

o Define the boundaries of a process before beginning a process mapping exercise.

What you will needo A white board, wall paper, or clear undisturbed wall

space.o Sticky Notes in various shapes.o Coloured pens or markers.

Outputs

Suppliers

Process

Custo

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Inp

uts

Process

Outp

uts

Customers

So a SIPOC diagram captures the internal and external inputs to a process, as well as the process steps. Here are the steps involved in creating one......


SIPOC Diagram - Steps in the Process

Prepare for the exercise by briefing those involved and by explaining the SIPOC process to the group members.

1

Agree the scope and limitations of the study, especially the starting and ending events for the process.

2

Begin by drawing in the process steps at high level, using 10 to 20 steps of your process.

3

Discuss the output requirements of the process and determine who your customers are. Add these to the chart.

4

Brainstorm the inputs to each step of the process. Add the suppliers for each of the inputs.

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SIPOC Diagram – Step 1

Gather all of your supplies and make sure you have ample wall space for the team to work.

o Provide participants a brief overview of the SIPOC process, purpose, and templates. Do this even with a knowledgeable group to bring all members in the group to the same level.

o Give each team member a stack of sticky notes and some magic markers.

o Hang your paper on the wall and write the words "Suppliers", "Inputs", "Process", "Outputs", and "Customers" along the top of the paper, leaving room below for plenty of notes.

1

Your chart should look like the one below…….

Next step……………



Review the SIPOC framework you have drawn on the whiteboard, worksheet, or flipchart.o Add the name of the process, and the name of the

“owner” of the process.o Determine the scope of the process you are studying. Agree

the process start trigger, process step, or event.o The process will also end somewhere. Agree the process

end trigger, process step or event.o Agree and list separately any known process assumptions

or constraints.

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Now complete the SIPOC chart with the group. o Resist the urge to start on the left of your chart

with your suppliers. o Instead, start with the process first. Use post-it notes

to create a high-level list of steps, sticking to no more than 5-10 steps.

o List the outputs of each step of the process. List all of the key requirements of each output from the customer’s view.

Outputs of the process don't just include the product or service you are delivering, and not all are desirable. They can include paperwork, approvals, scrap, and just about anything else you can think of that results from your process.

o Now add the names of the customers (if there are more than one). Do they have the same requirements? Think about where each output goes and that you know who the customer is for your process.

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Complete the “Inputs” side of the SIPOC diagram:o List the inputs into each step of the process, and the

requirements of each input (in your view – the person doing the work).

Review each step of the process to determine what is necessary to complete each one.

o Inputs can include materials, people, machines, systems, information, or anything else that is necessary for the process.

o Take some extra time with the inputs and write down everything you can think of.

o In this final step, list all of the suppliers who provide your inputs. These might include the company that supplies you, the team that performed previous steps, or an internal department that passes a product or customer to you.

o List the suppliers on the extreme left side of the chart.

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Now it is time to check your completed work.o Review the completed SIPOC diagram and ask the group

to check their work. o Make sure you have captured an accurate record of the

process, and resolved any areas of uncertainty.o Verify all key components are completed/addressed.

5

We can see a completed chart on the next page…..


Ice cream factory SIPOC Diagram

You can see how the SIPOC diagram has been used to capture the critical elements of the process.

Defining the Performance of an Operation

Motor Car Manufacturer

Hospital Radiograph

y Department

Parcel Courier Service

How can we define the performance of an operation?

Five operations objectives

Dependability

Cost

Quality

Speed

Flexibility

How the product or service conforms to specifications

Cost of making the product or operating the service

How reliably the product or service is provided.

The time between

customer requesting the

product or service and

getting it

How quickly the product or service can

be adapted to changing needs of the

customer

The same five measures........

Can relate to any operation.

The operations Performance Diagraph

Dependability

Cost

Quality

Speed

Flexibility

HIG

H

HIGH

LOW

HIG

H

LOW

HIG

H

LOW

HIGH

LOW

LO

W

The polygon shows the profile of performance for the

operation on each of the five objectives.

The further out the performance polygon crosses each of the axes the better the performance in that objective.

We can therefore compare the performance of one operation with another. Or show the performance of one operation over a period of time.

We can use this information to establish some objectives for the operation in way that the people who work there can understand.


Making operations objectives specific to you

Generic Objective

Specific Operations Objective

Quality Deliver good standard of treatment.

Ensure that staff are courteous and expert.

Speed Minimum time between appointment and treatment.

Minimum time for test results.

Dependability

Minimum cancellations.

Appointments start on time.

Flexibility Offer newest treatments.

Appointments process is flexible.

Copes with different levels of demand without error.

Cost Cost of running hospital facilities and meeting staff costs supports other objectives.

We can now make these objectives specific to our own operation.........

Objectives of the Operation

Setting operations objectives

Quick Delivery of Product or Service

Dependable Product

or Service

Appropriate Cost

Flexible Range of Products or

Services

Quality Products or Services

Overall Objectives

of the Business

How the Business Competes in the

Market Placeo What is the firm in

the business of doing?

o What does the firm do better than anyone else?

o What wins the order? o What qualifies an

item to be considered for purchase?

o How will the firm compete?

The overall strategy of your business is

governed by how it competes with rival

businesses.

What you set for your objectives in each of the five areas will be governed in turn by your overall business strategy.

How you set your objectives in the five areas will depend on the overall aims and strategy of the business.


What we have covered in this section

We have covered quite a lot in this first section, in order to give you the foundations for understanding any process……

What a Process Is.

The “Transformation Model”

The Input Process Output Chart

The S-I-P-O-C Chart

Performance Diagpraphs

Operations Objectives

How complete is your understanding of these areas?. You might want to go back and review any areas you are not sure about.


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