Friday, May 9, 2008

Process Management

Copyright © 1999 by The McGraw-Hill Companies. All rights reserved. Manufactured in the United States of America. Except as permitted
under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by
any means, or stored in a database or retrieval system, without the prior written permission of the publisher.
The material in this eBook also appears in the print version of this title: 0-07-034003-X

Why Process Quality Management? The dynamic environment in which business is conducted today is characterized by what has been referred to as “the six c’s:” change, complexity, customer demands, competitive pressure, cost impacts, and constraints. All have a great impact on an organization’s ability to meet its stated business goals and objectives. Traditionally, organizationshave responded to these factors with new products and services. Rarely have they made changes in the processes that support the new goods and services.
Experience shows that success in achieving business goals and objectives depends heavily on large, complex, cross-functional business processes, such as product planning, product development, invoicing, patient care, purchasing, materials procurement, parts distribution, and the like. In the absence of management attention over time, many of these processes become obsolete, overextended, redundant, excessively costly, ill-defined, and not adaptable to the demands of a constantly changing environment. For processes that have suffered this neglect (and this includes a very large number of processes for reasons that will be discussed later in this section) quality of output falls far short of the quality required for competitive performance.
A business process is the logical organization of people, materials, energy, equipment, and information into work activities designed to produce a required end result (product or service) (Pall 1986). There are three principal dimensions for measuring process quality: effectiveness, efficiency, and adaptability. The process is effective if the output meets customer needs. It is efficient when it is effective at the least cost. The process is adaptable when it remains effective and efficient in the face of the many changes that occur over time. A process orientation is vital if management is to meet customer needs and ensure organizational health.

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