Processes and Performance

Processes and Performance
Winning at lean using process understanding

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“I want to know about modern
process improvement techniques
but without the jargon.”

“I need to get more efficiency
from my manufacturing
processes.”

“I want cost effective training
delivered where and when I
need it”

“My team has so little time to
take off-site training
courses.”

What is a Process?
Click to edit Master title style
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”.

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

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

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

Transformation Processes
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.

Adds VALUE
to INPUT
RESOURCES
to create OUTPUT
INPUT PRODUCTS
RESOURCES
OUTPUT AND
PRODUCTS SERVICES
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.

Processes can be found everywhere
All operations, if you look hard enough, contain a transformation process.

INPUT PROCESS OUTPUT

An ice cream
INGREDIENTS and

MABUFACTURE
manufacturing process
ICE CREAM

PRODUCTS
PROCESS
takes ingredients and
FACILITIES

facilities and produces
finished ice cream
products.
SHOP DISPLAY AND

A shop selling the
CUSTOMERS WITH
SALES PROCESS
WITHOUT ICE
CUSTOMERS

ICE CREAM
same ice cream also
CREAM

has a process with
inputs and outputs.

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.

Human
Material
Data
PROCESS OUTPUT

Feedback

Types of Input Resources
In some processes there may be other inputs that may not be quite so
obvious.

The Human
electricity
Energy required to Material Human

power the Material

freezers.
Data Data
PROCESS OUTPUT
Energy

Energy Know-How
Facility

Knowledge Know-How
of the Ice
Know How Facility
cream Feedback
recipes.

The factory By understanding what the inputs to a
Physical buildings and
equipment used process are we know some of the things we
Facilities to make the ice need to change to make the process
cream. cheaper, faster, or more efficient.

Transformed and Transforming Resources
It is useful to be able to distinguish between two main types of input
resources.

Transformed resources Transforming resources
Those that undergo some type Those that are used to
of change in the operation to perform the change process
produce the goods or services. on the transformed resources.

Machinery
Factory
PROCESS

PROCESS
Raw Materials Operators
Customers Service
Patients Workers
Information Energy
Facilities

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

The Process of Transformation
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.

INPUT PROCESS OUTPUT

Feedback

All manufacturing processes involve
changing the form of something
(materials or components) into
something useful to the customer.

Types of Transformation Process
Here are some examples of different types of transformation:

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.

Outputs from a process
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 clothing
A food item
A jet engine

INPUT PROCESS OUTPUT A legal contract
A tap dancing diploma!

A healthier pet!

A good time at the
Feedback 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
Motor car servicing process
healthy teeth.
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
Processes sometimes produce outputs that were
not the ones desired by the customer. It is
important to recognise these.

By-Products
Outputs that result from
the process that are often
PROCESS OUTPUTS
useful for purposes other
INPUTS
than the intended one.

Feedback
Waste products
Waste products and by-products often occupy a lot Outputs that result from
of the operations managers time. Either in trying to the process that are less
desirable than the
minimise them or find other uses for them. intended ones.

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

What passes through your
process, “things” or
There will usually be one primary
people? Many processes
transformation process of your
deal with both. Even
operation. In an ice cream factory,
Primary though ice cream
the primary operation is the
Processes manufacturer’s make and
production and distribution of ice
distribute ice cream
cream products.
products, they would also
have customers to provide
a direct service to if they
also sold product at their
own retail outlets
Internal or Service or
TYPES
External OF PROCESS
Production
Tasks Tasks

External processes have
external customers, but some
processes can serve “internal” Support Support processes enable the primary
customers from within the Processes processes to function but are not in
organisation. themselves part of the chain of events
involved in the primary processes. An
An example of an internal
example of a support process would be
process would be the steps
the ice cream company’s finance or
involved in hiring new staff.
quality control department”.

How Operations Differ
Improving a process first means understanding it fully....

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 Airline operator EasyJet, in the United
services/products Kingdom, specialise in standardised low cost air
produced. travel without the extras. British Airways have
a range of different services for Standard,
First and Business Class Customers.
Where the customer Hewlett Packard build a limited number of
is involved in the models of computers to specific market needs.
process. Dell allow the customer to make design
decisions by creating any specification using a
wide range of standard components.

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

Micro and Macro Processes
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

MACRO PROCESS

ICE CREAM PROCESS Micro Processes

INPUTS BLEND CONDITION FREEZING FILL/FORM OUTPUTS
RAW PACKING &
MATERIALS FREEZE

Micro Processes

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

Primary and Support 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.

PRIMARY PROCESSES

OPERATIONAL OPERATIONAL OPERATIONAL
INPUT RESOURCES OUTPUTS
PROCESS PROCESS PROCESS

FINANCE SUPPORT PROCESS

ENGINEERING SUPPORT PROCESS

HUMAN RESOURCES SUPPORT PROCESS

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

All of the output
The diagram simply lists all
products or services are
of the transformed and
listed on the right hand
transforming input
side.
resources on one side of the
chart

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

.

Try an I-P-O Diagram Yourself
You can make your own template like the one here. Alternatively
download a template from www.plusforge.com.
The main outputs of
1 an operation are
Classify the Input Resources. easier to determine.
4 Which ones are transforming
resources, and which ones are
transformed?

List the Input Draw or list the high level
3 Resources. 2 steps in the process in the
middle section.

Completed I-P–O Chart
How did you get on? How does your diagram compare to the one shown here?

Suppliers and Customers
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?

OPERATIONS ENVIRONMENT

CUSTOMERS
SUPPLIERS

OUTPUTS
PROCESS
INPUTS

Most inputs to a process Some outputs from the process
originate from external will go to internal customers
suppliers beyond the operation. and some may go to external
ones.

The SIPOC Diagram
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.

Suppliers Inputs Process Outputs Customer
•The suppliers •The inputs are •The process is •The outputs are •The customers
are the the information the steps or the products or are the
individuals, or materials tasks that services that individuals, depa
departments, or provided by the transform the result from the rtments, or
organisations suppliers. inputs into process, and the organisations
that provide the outputs: the important that receive the
materials, •Inputs are final products or requirements outputs, the
information, or transformed, services. that the products or
other consumed, or customers need. services, genera
transformed otherwise used ted by the
resources that by the process. process.
are worked on in
the process.

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.

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.

OPERATIONS ENVIRONMENT

CUSTOMERS
SUPPLIERS

OUTPUTS
PROCESS
INPUTS

Feedback to the Feedback from
Suppliers from the Customers to the
Operation Operation

The SIPOC Diagram
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......

Inputs

Customers
What is it used for?

Process
Outputs
o Quickly and easily capture the current or "as is" state of

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

Outputs
Process
What you will need
o A white board, wall paper, or clear undisturbed wall space.
o Sticky Notes in various shapes.
o Coloured pens or markers.

SIPOC Diagram - Steps in the Process
Prepare for the exercise by briefing those involved and by
1 explaining the SIPOC process to the group members.

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

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

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

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

SIPOC Diagram – Step 1
Gather all of your supplies and make sure you have ample wall space
1 for the team to work.
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.
o Give each team member a stack of sticky notes and some magic
markers.
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.
Your chart should look like the one below…….

Next step……………

Review the SIPOC framework you have drawn on the whiteboard,
2 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.



Now complete the SIPOC chart with the group.
3 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.


Complete the “Inputs” side of the SIPOC diagram:
4 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.


Now it is time to check your completed work.
5 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.

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

How can we define the performance of an operation?

Hospital
Parcel Courier Radiography
Service Department

Five operations objectives

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

Quality
How the product or service
conforms to specifications

The time between Speed Cost
customer
requesting the Cost of making the
product or service product or operating
and getting it the service

Flexibility Dependability
How quickly the
product or service can How reliably the
be adapted to changing product or service is
needs of the customer provided.

Can relate to any operation.

The operations Performance Diagraph

We can therefore compare the performance of one operation with
another. Or show the performance of one operation over a period of
time.
The further out the performance
Quality polygon crosses each of the axes
the better the performance in that
objective.

HIGH
Speed Cost

LOW
The polygon shows the profile
of performance for the
operation on each of the five
objectives.

Flexibility Dependability

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

Setting operations objectives

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

The overall strategy of
Objectives of the
your business is governed
Operation
by how it competes with How the Business
Quality Products or rival businesses. Competes in the Market
Services Place
o What is the firm in the
Quick Delivery of business of doing?
Product or Service Overall o What does the firm do
better than anyone
Objectives else?
Dependable Product of the o What wins the order?
or Service Business o What qualifies an item
to be considered for
Appropriate Cost purchase?
o How will the firm
Flexible Range of compete?
Products or
Services
What you set for your objectives in each of the five
areas will be governed in turn by your overall
business strategy.

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.

If you liked this......
Get our new e-Learning title “Lean Operations”
 Understanding processes and performance.
 Lean operations, value and waste.
 Process mapping for lean operations.
 Developing customer focus.
 Implementing lean operations.

Easy-to-use training for lean operations professionals.
• Five modules containing expert lean advice.
• Real world examples of lean operations in use.
• 5 Memory jogger “mind-maps” summarise each module.
• Quizzes and activities to check your understanding.
• 10 practical worksheets you can use right away.

Visit us at www. plusforge.com

Processes and Performance

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