The idea of representing the organization in the form of a set of process management and its activities as managing a set of processes began to spread in the last decade. The world’s leading companies are adopting this approach and have proven in practice the importance, efficiency, cost-effectiveness, and progressiveness of the transition to customer-oriented production with a process-oriented management system.
The process model of the enterprise is the basis for the analysis of processes, which often leads to conclusions about the need to change processes, both from a technological and organizational point of view, to improve the efficiency of the organization as a whole – increasing profits, reducing costs, improving product quality, increasing production potential, etc.
For a single process, the objectives, criteria, and methods necessary to ensure effectiveness both in its implementation and in its management should be define. Of particular interest is the integration into a single system of such process management technologies as goal management, performance management – both in relation to individual processes and their totality.
General process management methodology
The ISO 9000 standard defines a process as a set of interrelated and interacting activities that transform inputs into outputs. In other words, any activity or set of activities in which resources are use to convert inputs into outputs can be consider as a process. At the same time, resources may include equipment, means of maintenance, technology, personnel, and methods of its work.
A process is a sequence of actions of the deployment in time and subject to control action, provide with the requirements of resources and having establish requirements for input parameters, output parameters and parameters of the process itself. Measurements can be made at the inlet and output of the process. As well as in the various phases of the process. To confirm that the requirements have been met.
During the production process, a supply chain is require to form. The relationship of the process between the supplier and the consumer. Suppliers and consumers can be both external (another enterprise, organization) and internal (another division of the same enterprise, other processes of the organization).
Process Approach
When managing an organization from the standpoint of the process approach. The previous process, the process-supplier, and the subsequent process, the process-consumer, is consider as a consumer. In the supply chain (both external and internal). The principle must be strictly adhere to, stating that it is the assessment of products by the consumer that is the true assessment of their quality.
The result of the process is production. Products may include services, software, technical means, recyclable materials, or a combination of these categories. Products can be tangible (e.g., equipment or recyclable materials), intangible (e.g., information or concepts), combine.
The products may be intentional (e.g., products offered to a consumer) or unintentional (e.g., environmental pollution).
Quality system requirements
Requirements for quality systems in accordance with ISO 9001 can be apply to all product categories. So, for example, in the processes performed by the management, planning, financial departments of the organization, the product, as a rule, is a document or service (managerial or informational) for other processes.
The process, transforming the object of labor, adds value to it, and values from the point of view of the consumer – both external and internal. In each process, resources, including labor, are spent in a certain way, thereby adding value to the converted object. The more the process adds value to the product and the less resources it consumes, the higher the efficiency of the process:
Where is the efficiency of the process:
- Value added by the process for the end user.
- The value added by the process for the end user (the cost of resources consumed).
Overall quality management is achieved through the management of processes in an organization.
Process control includes:
- Definition of objectives and expect results of the process.
- Determination of the quality characteristics of the process, including the criteria for the effectiveness of the process. The criteria for the effectiveness of process management and the generalized direct quality indicator – the effectiveness of the process.
- Identify resources, including labor, need to complete the process.
- The Identification of methods and means of performing the process and achieving the set goals.
- Management of resources that are allocate for the implementation of this process. (Staff motivation is also included in the management).
- Analysis of input and output data, management of process parameters.
Process quality indicators
The management system should ensure continuous improvement of processes in the organization. Which is a requirement of ISO 9001.
To meet this requirement, it is necessary to define measurable indicators of the quality of the process.
It seems to us appropriate to structure these indicators into three groups.
Groups
First Group
The first group is the performance indicators of the process.
Operational management of the process is built, as a rule, on the basis of indirect indicators, reflecting mainly the technical component. Indirect indicators of the quality of the process, which can be attribute to the performance indicators of the process, can serve, for example:
The following generalized characteristics:
- Process accuracy – characterized by the magnitude of the deviation of the product parameters at the output of the process from the nominal values establish in the documentation (specifications). for the workflow process, for example, the accuracy of the process may be characterize by the number of errors and inconsistencies in the develop documents.
- Process capabilities (stability indicator) – characterize by the magnitude of the spread of product parameters at the output of the process within the boundaries of the tolerance field established in the documentation (specification).
- Process reliability – characterize by the frequency of process failures leading to a change in product characteristics, or the time of operation of the process without failures.
- process performance – can be measure by the time of execution of the process consumer’s request (service time).
- Harmony of the process – characterize by the parameters of product queues at the input and output of the process. These queue parameters can be set to the average and maximum queue length, average, and maximum product queue times.
- Controllability of the process – characterize by the magnitude of the reaction of the process to the control action.
- Process safety – characterize by the frequency of process failures that cause harm to the health of employees.
- Ergonomics of the process – characterize by the average fatigue time of employees when performing the process.
- environmental friendliness of the process – characterize by the frequency of process failures that lead to harm to the environment.
The degree of compliance of the actual indicators of the process with the plan (establish) considering the risk of non-compliance can be taken as an assessment of the effectiveness of the process.
Second Group
The second group is the performance indicators of process management.
For processes managed by a quality management system, quality objectives should be formulate. These objectives should be link to quality policies and, at a minimum, set objectives for improving performance. The degree of improvement in the process quality indicator (for example, from those listed above) is an indicator of the effectiveness of process management.
Third Group
The third group is the indicators of the effectiveness of the process.
Indicators of the effectiveness of the process reflect its “efficiency coefficient”. It is direct indicators of the effectiveness of processes that can provide the most valuable factual basis for management decision-making by senior management.
Setting process goals
The groups of process quality indicators discussed above define three levels of process control:
- Management of the effectiveness of the process.
- Process management performance management.
- Process efficiency management.
The goals of the process are structured according to these levels of management. The implementation of goals has a certain sequence:
First of all, it is necessary to ensure the effectiveness of the process. The next step is to ensure the effectiveness of process management, only after that we can talk about efficiency. But this is true mainly at the stage of formation of the quality management system. Once the goals of the first two levels have been set. They become equally mandatory to achieve, and the achievement of level 3 goals can still be in the future. The same thing happens when the goals of all three levels are set – they all become equally mandatory.
Goal levels.
Level 1
Targets are set to achieve predetermined performance targets. It is impossible to create an ideal process from the very beginning, because in order to immediately predict and prevent the occurrence of all problems. It will take a volume of resources striving for infinity.
At this stage, it is advisable to use the tools of mathematical statistics (statistical methods of process control, for example, Pareto analysis, Ishikawa diagrams, control charts, etc.).
Level 2
Objectives are define to improve the performance of the process and to “tighten” the normative indicators. The formulation of goals must necessarily be accompanied by an analysis of the resources (investments) require to achieve them. It is the limits on the allocate resources that determine the limitations on setting goals.
Achieving quality goals poses new challenges for the effectiveness of the process.
At this stage, quality assurance and control mechanisms such as FMEA, Deming chain reaction, Deming-Shewhart cycle (PDCA) can be used.
Level 3
The objectives are define to reduce resource costs while improving process performance and process management (“process efficiency”). If an organization is able to isolate from the total value to the consumer that part of the value that is added by the process, then the true indicator of effectiveness will be the attitude to.
Maximizing this relationship becomes the main goal of process management and sets new goals for improving the effectiveness of the process and the effectiveness of process management. At this stage, financial analysis tools work and among them functional-physical analysis, functional-cost analysis, quality cost accounting system, deployment of quality functions, SWOT analysis.
In the process of financial analysis, the organization determines the priorities for the development of processes and structural units and may also decide to “get rid of” those processes (or, if possible, minimize them) that consume resources that are disproportionate to the value added to the products.
Objectives and indicators of quality by levels of management
The principle of formation of the quality criterion: the goal is -> the measured value of -> criterion. The measured value is the quality indicator. The numerical value of an indicator (usually a range of values) that defines the boundary between “good” and “bad” is a criterion.
The deployment of the goal is build by analogy with the decomposition of processes – from the general to the particular. Considering the activities of the organization as a network of interrelated processes.
Goals Levels
It is possible to formulate the main goals of this network by levels:
| Organization Goal Level | Purpose of the organization | Measured value (quality indicator) | Data source |
| Performance of the organization | Fulfillment of requirements and expectations of the consumer | Indicator of the degree of customer satisfaction of the organization | Marketing Service (Consumer Survey) |
| Effectiveness of organization management | The most accurate definition and implementation of the requirements and expectations of the consumer | Indicator of growth in the degree of customer satisfaction of the organization | Marketing Service (Consumer Survey) |
| Efficiency of the organization | Accurate identification and implementation of requirements and expectations of the consumer while reducing the costs of the consumer and the organization for the life cycle of products | Where; – product quality. – customer satisfaction. – image coefficient of the organization. – value to the consumer. – cost to the consumer. | Financial and Analytical Service, Marketing Service |
But it’s not enough to set goals. It is necessary to prove the reality of their achievement and show the ways of achievement. Here, as a rule, the concept of the development of the organization is born. It is impossible to unambiguously state what is primary – goals or concept. It is possible that they are create simultaneously, or one is part of the other.
On the basis of the general concept, the concepts of development of the organization’s divisions are form (hierarchically, from top to bottom). For the division, determine suppliers and consumers, determine the requirements for suppliers, requirements, and expectations of consumers. At the same time, suppliers and consumers are define as both external and internal.
Process Unit Goal levels
Form the goals of the units, which can also be arrange by levels and based on the general provisions given in the table below:
| Unit goal level | Purpose of the unit | Measured value (quality indicator) | Data source |
| Performance of the unit | Fulfillment of requirements and expectations of the consumer | Unit customer satisfaction index | Own analysis of feedback from the consumer, financial and analytical service, marketing service |
| Effectiveness of unit management | The most accurate definition and implementation of the requirements and expectations of the consumer | Indicator of growth in the degree of customer satisfaction of the division | Own analysis of feedback from the consumer, financial and analytical service, marketing service |
| Efficiency of the unit | Accurate identification and implementation of requirements and expectations of the consumer while reducing the costs of the consumer and the division for the life cycle of products | Where is the efficiency. (1) the value added by the unit to the end user. (2) value added by the unit for the end user. | Financial and Analytical Service, Marketing Service |
By representing the activities of the organization as a network of processes, it is possible for each process to define its processes-suppliers and processes-consumers and to form the goals of the process at the proposed levels:
Goal levels : Process Management
| Process Goal Level | Purpose of the process | Measured value (quality indicator) | Data source |
| A. Process performance | Compliance with established standards (requirements of consumer processes) | Degree of compliance of the process indicators with the planned ones, taking into account the risk of non-compliance. | [1] Process Executor |
| B. Effectiveness of process management | Increase the effectiveness of the process. Assign more stringent process quality standards. Improve process stability. | Degree of improvement in process quality characteristics. | [2] Process Master |
| C. Process Efficiency | Reduce resource costs when meeting Level 1 and Level 2 objectives | Where is the efficiency. (1) value added by the process to the end user. (2) value added by the process to the end user. | [3] “Sponsor” (investor) of the process |
Goal management is a dynamic process and requires a constant analysis of the suitability and sufficiency of the goal. The ISO 9001 standard requires the implementation of management only of the objectives that in our classification belong to levels 1 and 2.
Nevertheless, we consider it useful and necessary for the development of the organization to use the above principles for determining indicators and goals for Level 3 – process performance management.
Analysis of the target system
In accordance with the provisions of ISO 9001, as well as management practices. The objective analysis is carrying out under the following headings:
- The presence of a goal – the goal is formulate and document.(It is highly desirable that the goal is not a certain value (value) of the quantitative indicator).
- understandability of the goal – the formulation of the goal is clear, and understandable for the personnel of the appropriate level.
- Measurability of indicators – indicators are define in measured values.
- Availability of a criterion – the criterion for achieving the goal is document.
- The availability of a mechanism for achieving – the mechanism (method) for achieving the set goal is formulate, document, and understand.
- Revision of the criterion – the mechanism (method) of changing the criterion for achieving the goal is formulate, document, and understand.
- Availability of records – documentary records of quantitative indicators are maintain in working order.
- Availability of the analysis process – at the appropriate level, a regular analysis of the achievement of the goal is carrying out, the results of the analysis and conclusions are document.
- Effectiveness of goal management – based on the results of the analysis, corrective and / or preventive measures are develop, implement, and document as effective.
Consistency – alignment with higher-level goals.
Conclusion
In most Indian organizations, the system of regular management is not build. For such organizations the cite system for assessing the quality of processes can bring many difficulties. Each head of the organization ultimately determines what principles to follow in the management of the organization.
For small and medium-sized business organizations, the approach outlined above may be economically unprofitable. If we consider large business organizations, then their leaders need to build a “transparent” management system that allows them to make timely decisions based on facts and is able to respond quickly to external changes.