15.10.2003 Version 10.0The High Performance Organisation LtdCreating A Process Based Management System 1

Welcome

Creating a Process BasedManagement System

for ISO9001:2000

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Outline of the day

• What is a process based management system?

• Introduction to process approach

• Designing the management system

• Process design & process management

• Key performance indicators

• Implementing process management

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Session one

What is a process based management system?

Learning points:•To understand the 8 quality principles of ISO9001:2000•To understand what is meant by the term management system•To be able to put process management in context

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The management systemDefinitions

•Management: The action or manner of managing ….. the conduct of affairs, administration, direction, control

•System: A whole composed of parts in orderly arrangement according to some scheme or plan

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Is the human body a system ?

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– an orderly arrangement of parts?– all parts have specific deliverables?– all parts contribute to required outcome?– all parts required for full performance?– sub-optimal performance if any part is not

fully functioning or properly ‘connected’ ?

Is the human body a system ?does it have?

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Is a business a system ?

• Does (Should) a business have -– an orderly arrangement of parts?– a definite scheme or plan?– all parts with specific deliverables?– all parts contribute to required outcome?– all parts required for full performance?– sub-optimal performance if any part is not

fully functioning or properly ‘connected’ ?

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The management system

•Business structure defines the detail of the management system

• i.e. the ‘parts’ to be managed

•‘parts’ are defined by the management

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Quality (business) principles• Customer focus• Leadership• Involvement of people• Process approach• System approach to management• Continual improvement• Factual approach to decision making• Mutually beneficial supplier relationships.

ISO 9001:2000 process model

Continual improvement of the management system

Customer Customer

Requirements

Satisfaction

Management responsibility

Resourcemanagement

Measurement,analysis andimprovement

Productrealisation

Product

outputinput

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System management

Inputs Outcomes / results

LearnChange

Law

Society

Economic Products &Services

Customersatisfaction

Environmental

Regulations

The big picture

‘setting off in the right direction is critical’

ISO 9001:2000

Systems & processthinking

Management systems development

Management skills development

Learning and change

Corporate Social Responsibility / Corporate Governance

Based on

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Session two

Introduction to the process approach

Learning points:•To understand the ‘high performance cycle’ and its links with ISO9001:2000•To understand what processes are and why they operate across the organisation and not in department silos•To understand the ‘system’, ‘process’ and ‘procedure’ relationship. (The difference between ‘What’ we do and ‘How’ we do it)

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High performing organisations

Determine customer & stakeholder needsDetermine customer & stakeholder needs

Agree business objectives

Agree business objectives

Define business processes

Define business processes

Establish KPI’sEstablish KPI’s

Monitor KPI’s & improve

Monitor KPI’s & improve

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Processes v silos

Deliver the service?

Service design & development?

Business planning?

Dept 1 Dept 2 Dept 3 Dept 4

Customerfocused

Communicating & winning business?

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Departmental - ‘silo’ thinking

KPI KPIKPI KPI

95%

Environment Engineering PlanningLocal Land Charges

95% 95% 95%

SLAs SLAs SLAs

What the business sees

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Processes - ‘Joined up’ thinking

NewEfficiency

andEffectiveness

KPIs(stakeholder / customer

needs)

95% 90% 85% 81%

Environment Engineering PlanningLocal Land Charges

What the customer sees

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Management system structureOwner – Head of scope

Management system

A process A processOwner - Process Owner

‘the what’

A procedure

‘the how’

• measure efficiency and effectiveness

• measure business performance• finance, customer, process

Training Guide

Photograph

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1. What are the potential benefits of having processes that run cross functionally?

2. What cultural issues does this raise within the organisation?

EXERCISE ONE

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Session three

Designing the management system

Learning points:•To learn how to scope your management system and identify the ‘key’ business processes

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Management system structure

Owner – Head of scopeManagement system

A process A processOwner - Process Owner

‘the what’

A procedure

‘the how’

• measure efficiency and effectiveness

• measure business performance• finance, customer, process

Training Guide

Photograph

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A typical system?Understanding

themarket

Monitor & measure

performance

Winning business

Design / enhanceservices

Businessplanning

Bringing aboutchange

Deliver services

Managingassets

Managingpeople

Managing finance Supporting ?

Core?

Enabling?

Managing after sales

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Understanding Our

Customer & Stakeholder Requirements

Planning & Managing Our Business

Managing Product Orders

Generating & Winning Business

Managing Business Improvements

Managing Service Support

Managing Our Finances

Developing Our People

Measure & Evaluate Business Performance

Managing Our I.T.

Managing Training Services

Company Policies & Procedures

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Points to remember•Don’t use functional / departmental names for processes

•Use organisational jargon not management jargon

•Has to be understood by everyone, including customers

•Organise processes to reflect the ‘high performance cycle’

•Think business first then the standard

•Cover all areas of the business

•Don’t forget processes that cover stakeholder needs, business

planning and bringing about change etc.

•Use the 8 quality principles to check everything is included

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Designing a system

1. Design a management system for a large independent Supermarket

EXERCISE TWO

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System design session• Facilitated half day for identification of processes• Cross-functional senior management team• Introduce business process management• Focus on business performance not ISO9001:2000• Cover all activities• Add in others (best practice, ISO9001 etc)• Get feedback from outside the meeting.

OPERATIONAL PROCESSES

SUPPORTING RESOURCES

LEADERSHIP

Managing Our Facilities

Developing Our Business Plans

Dealing With Complaints

Review & ImproveOur Performance

Managing Our People

Managing Our Information Systems

Managing Our Finances

Routing Enquiries

Considering Allegations

Investigate Allegations

Presenting Cases to

the Adjudication Panel

Producing Guidance & Publications

Running Events

Developing Policies

MONITOR PERFORMANCE

Auditing Our Systems

External Relationships

A management system

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A management systemUnderstanding stakeholders & market needs

Stategy & planning

Communicating w ith customers & stakeholders

Identifying improvments

for higher performance

Change management

Delivering other services

Managing event marketing

Managing F2F assignments

Managing contact centres

Managing & developing our

people

Managing our Information

systems

Managing our f inances

Managing our facilities

Managing our L&D services

MAKING EFFECTIVE CUSTOMER CONTACT

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Session four

Process design and process management

Learning points:•To understand what a process is and how it can be mapped•To understand what process management is and how this links to the overall performance of the organisation

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Management system structureOwner – Head of scope

Management system

A process A processOwner - Process Owner

‘the what’

A procedure

‘the how’

• measure efficiency and effectiveness

• measure business performance• finance, customer, process

Training Guide

Photograph

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What is a process?

Inputs Output

Transformationactivity

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Extract from HPO process map

Operations Director

Review Marketing Plan & identify

marketing needs

Define marketing objectives,

promotional routes & costs

Board & any relevant partners

Create specif ication & mock up

Approve?

All events / promotions

Operations Manager

Select dates, f ind deliverers & venues

& pre-book

Public event

Calibrate equipment using

subcontractor

W/shop Coordinator

Update equipment

record including due date for calibration

W/shop Coordinator

New item of test or measuring

equipment purhased

W/shop Coordinator

Add to test equipment list &

generate equipment

record

W/shop Coordinator

Calibration not required

W/shop Coordinator

For fault diagnosis

only?

Is theequipment calibrated?

Recall equipment

falling due for calibration

W/shop Coordinator

Calibrate equipment using

subcontractor

W/shop Coordinator

Agree action required, i.e.

re-test, replace or repair

W/shop Coordinator

Update equipment

record

W/Shop Coordinator

Passcalibration?

Return equipment to

service

W/shop CoordinatorYes

No

No

Yes

PROCESS OWNER: ROGER WIRTZ

Process Objectives To ensure test equipment used to verify

product to specified requirements, is calibrated

Process KPI's

1. Number of instances test equipment is found to be out of calibration

No

Yes

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What is process management?

Inputs OutcomesOrganisation as a series of activities

Measure against targets, learn & improve

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Process management

Step 4Step 4Step 1 Step 2 Step 3

Tar Act Var

Inputs Outputs

Knowledge

ResourcesCompetence

Teamwork

Budget

LearnChange

Ownership

Training Guide

Photograph

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Process owners role

• Identifying the process

• Identifying process KPI’s

• Reporting process performance

• Holding process review meetings

• Approving and implementing process improvements

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Session five

‘Key Performance Indicators’(KPI’s)

Learning point:•To understand the importance of KPI’s in a process based management system•To understand the importance of selecting the right KPI’s•To understand how ‘system’ and ‘process’ KPI’s link together

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Linking KPI’s at different levels

Stakeholder Needs ISO 9004Customer Needs ISO 9001

Business (quality) objectives

Processes

Key performanceindicators

Monitor Performance& Improve

System KPIs

Process KPIs

‘shaped by the needs of stakeholders &customers’

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What is a KPI?

•Metric not a target, often percentage•Measures efficiency (in the process) - process•Measures effectiveness (of the process) - product•Allows management by fact•Managing processes not procedures•Meaningful to those involved•Utilise existing KPIs.

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Example KPI’s• People

– % Staff turnover– % absenteeism / sickness– % enjoy working at organisation

• Process– stock turnover– on time delivery performance– energy consumption

• Customer– % of market share– % of very satisfied customer– % of existing customer growth

• Finance– Operating profit– Debtor days– % return on investment

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Business objectives + KPI’s

Process objectives + KPI’s

People objectives + KPI’s

The business focussed management information system

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EXERCISE THREE

1. Why is the choice of KPI’s so important?

2. How can effective process management influence the performance of the overall organisation?

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Session six

Implementing process management

Learning point:•To understand the key steps to be taken in implementing a process based management system•To understand the key stages of the ISO9001:2000 assessment process

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Project phases

•Design management system•Identify processes•Develop processes & KPIs•Set up management information system•Review / develop procedures•Implement changes•Carry out process audits•Compare with standard•Improvement (KPI data & audits)•Registration.

Education&

Change

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ISO9001:2000 assessment process

• Obtain quotes & agree assessment company• Pre-assessment option• The assessment visit itself

– Question the Auditor• Decision on the day• Follow-up action• Continuing assessment visits

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Session seven

Summary

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Management system essentials• Adding together all process outputs will deliver

the strategic objectives

• Taking away any one output will not allow all strategic objectives to be met

• ‘High performance cycle’ is embedded in both the processes and the system

• It is not just about process mapping

• It is a communication tool

• It is a live system - developing over time

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