Implementing ISO9001:2000 & process management Creating a process based management system Version...

Implementing ISO9001:2000& process management

Creating a process based management system Version EME.10.1-UK Oct 03The High Performance Organisation Ltd

Version EME.10.1-UK Oct 03The High Performance Organisation Ltd

2Creating a process based management system

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



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



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



Is the human body a system ?



– 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?



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’ ?



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



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



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



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)



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



Processes v silos

Deliver the service?

Service design & development?

Business planning?

Dept 1 Dept 2 Dept 3 Dept 4

Customerfocused

Communicating & winning business?



Departmental - ‘silo’ thinking

KPI KPIKPI KPI

95%

Environment Engineering PlanningLocal Land Charges

95% 95% 95%

SLAs SLAs SLAs

What the business sees



Processes - ‘Joined up’ thinking

NewEfficiency

andEffectiveness

KPIs(stakeholder / customer

needs)

95% 90% 85% 81%

Environment Engineering PlanningLocal Land Charges

What the customer sees



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



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



Session three

Designing the management system

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



Management system structure

Owner – Head of scopeManagement system


‘the what’

A procedure

‘the how’



Training Guide

Photograph



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



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



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



Designing a system

1. Design a management system for a large independent Supermarket

EXERCISE TWO



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



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



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



Management system structureOwner – Head of scope

Management system


‘the what’

A procedure

‘the how’



Training Guide

Photograph



What is a process?

Inputs Output

Transformationactivity



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



What is process management?

Inputs OutcomesOrganisation as a series of activities

Measure against targets, learn & improve



Process management

Step 4Step 4Step 1 Step 2 Step 3

Tar Act Var

Inputs Outputs

Knowledge

ResourcesCompetence

Teamwork

Budget

LearnChange

Ownership

Training Guide

Photograph



Process owners role

• Identifying the process

• Identifying process KPI’s

• Reporting process performance

• Holding process review meetings

• Approving and implementing process improvements



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



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’



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.



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



Business objectives + KPI’s

Process objectives + KPI’s

People objectives + KPI’s

The business focussed management information system



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?



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



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



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



Session seven

Summary



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



Outline of day 2

1. What is a process and what is process management?

2. Proposed process mapping protocol

3. Process & procedure design

4. Process measurement and monitoring

5. Practice

6. Facilitating process mapping



Session one

What is a process and what is process management?

Learning points:•To understand what is meant by the term process based management•To be able to put process management in context•To understand the system, process and procedure relationship.



What is a process?

Inputs Output

Transformationactivity



What is a process?

1. What could be some inputs to an organisational / business process?

2. What could be some outputs from an organisational / business process?



What is a process?

Process

Materials

Procedures and methods

Information

People

Knowledge

Competence

Plant or equipment

Products

Services

Information

Paperwork

INPUTS? OUTPUTS?

‘don’t get confused with resources & constraints’



What is a process?

InputsMeasure outcomes

/ results against targets

Process as aseries of activities

Resources necessarily used in carrying out the activities

Constraints



What is process management?




Learn & improve toEnhance performance



But what do we improve?




Learn & improve toEnhance performance

Budget Competence Asset use

Methods

Teamwork

Environment

CultureH&S

Information sharing

‘you manage the resources & constraints notjust the process itself’



System management

Inputs Outcomes / results

LearnChange

Law

Society

Economic Products &Services

Customersatisfaction

Environmental

Regulations



Why process management?

• Research indicates that the biggest problem is that managers do not understand the processes they are working in, and therefore cannot manage them

» Collins, P. (1997), “Using Process Mapping as a Quality Tool” Management Services, Vol. 41, No. 3, pp 24-26.



CEO

Dept.1 Dept.5Dept.4Dept.2 Dept.3

1

6

2

FunctionalHierarchy

Inputs

Outputs

Controlflows

down throughdepartments

Work processes flow across departments

3 4

5

Functional Hierarchy vs.

Product/Service Flow



Why process management?• The problems in organisations often occur between

changeovers, when one process step flows to another process step in a different department or to a different specialist ….business processes are like a relay race, with the baton passing from one person to another within the organisation.

• The Olympic relay team don’t practice running together, they only practice the baton changes!

• Having only good runners will not get you the gold medal!



Management system structure multi-level mapping

Management System

A process A process

‘the what is done’

A procedure

‘the how it is done’

Owner - Director

Owner – Process Owner

• Measure business performance finance, customer process, innovation

• Measure efficiency and effectiveness

• finance, customer process, innovation

Training Guide

Photograph



Exercise 1

Group 1 – What is the impact of process managementon an organisation?

Group 2 – What is system management and how doyou incorporate standards into a system?

Group 3 – What are the benefits of process and systemsthinking to customers and the organisation?



Session two

The principles of process mapping

Learning points:•To map a business process at the correct level•To understand how and when to use sub-processes•To design processes that can be effectively communicated•To map processes using simple tools and techniques.



To map a process

•Start by defining the ‘real’ purpose of the processi.e. what the process is designed to achieve•Define inputs•Define outputs.

Then…..



Process mapping• Process mapping aims to deliver a pictorial or graphical

representation that shows clearly:– A number of linked process definitions represented in sequential

order– Process definitions need ‘active’ verbs which describe activity

[delivery of, creation of, completion of, agreeing to, analyzing of etc….]

– Identification and visibility of process owners– Identification and immediate visibility to key functional interfaces– The start and end point of each process– Use a consistent level of detail across processes.



Basic process mapping symbols

Activity DecisionYes

No

Process Flow



The 7 golden rules of process mapping

1. Time (& process flow) moves from left to right

2. Agree overall process title with start & end points

3. Define critical activities and critical cross-functional interfaces

4. Identify Process Owner

5. Use active verbs to describe process activities and, if possible, define processes in terms of desired outcome.

6. Map using 3 levels (if required) of consistent detail

7. Apply the 80:20 rule – don’t try to map every eventuality



Exercise introductionUnderstanding the Leisure Business

Planning the business

Market our services

Run the leisure facility

Run the restaurant

Run conferences

Monitor performance

Bring about change

ManagingPeople

Managing Money

ManagingSupply chain

Managing Assets



Exercise 2

1. In groups develop a draft process map for one of the service delivery processes in hotel’s management system.



Questions to Ask?

• What difficulties did you have?

• What would prevent you from process

mapping effectively?

• What questions / issues do you have?



Other issues

•Can the map be understood in 30 secs?•Can the map be seen easily on a PC screen if needed?•Can other people understand it?•Get the big picture by concentrating on the ‘Yes’s’ first•Is it clear and concise?•Is everyone included?•Are roles and responsibilities defined?



Process map: example one

Issue Store

Machine Shop

Machinist - Honer (1) 0.0% utilization

Machinist - Turner (1) 0.0% utilization

Wait Time (1) 0.0% utilization

Wait for both batches

to be completed.

Turn piston to size. On

batch completion send out

Drill out barrel, hone

and polish. On batch

completion send out.

Take out material

and mark in sets

Assemble items.

Send out.

Heat treat to

specification. Batch

size - 1000

De-grease, sand-blast

and final de-grease.

DE-ICER MACHINING & HEAT TREATMENT

‘Comments?’



Process map: example two

Implement tactical direction and identify priority list of

what needs to be achieved, who,how.

General Managers Forum

Implement tactical direction from the Board.

General Managers SalesReview and evaluate current performance.

Management Executive Meeting M.E.M. (Group)

Research Independents and identify their needs and expectations for the

future.

Marketing

Research Independents, Multiples & Distribution outlets and identify their

needs and expectations for the future.

Sales Directors

Research market place for potential opportunities and identify potential impact on

P&H.

Directors

Review requirements of :- Bank , legal and regulatory

institutions and implications for P&H

Financial Director

Identify Holdings Board Requirements

Managing Director

Research and identify staff training needs and

expectations for the future.

Operations Director

Research and Identify Supplier / Manaufacturer needs and expectations

for the future.

Commercial Director Implement tactical direction from the Board

National Sales Manager Distribution Services plus

Account Controllers

Is direction tactical or strategic ?

Produce planning assumptions and template Finance Plan including any

sales numbers.

Financial Controller

Define sales strategy and resources required to deliver sales targets.

Sales Director

Produce departmental plan covering objectives,

timescales, manpower I.T. requirements, equipment,budget etc to deliver sales

target

Head Office Department Managers

Produce Branch plan covering objectives,

timescales, manpower, equipment, budget etc to deliver the sales target.

General Managers

Consolidate all plans into P&H business plan.

Implementation Group

Facilitate a review process with Sales Director


Do individual Sales Plans fit?

no

Consolidate into Sales plan and distribute.


Define goals and objectives to Senior Managers.


Communication of business plan

implementation and advise tactical changes.

All Senior Managers

Approve plan


Facilitate Review and solve issues


Review / evaluate strategy, needs of the market and

review direction

Board

Discuss / agree shared strategy and objectives.

Board strategic

Review / sign off with relevant Directors

General Managers

Tactical Action Plan

tactical

yes

Note:- The Directors involvement is to indicate

the flow of the process only and does not explain their

full job functions.

Do different departmentall business plans fit

together?

‘Comments?’



Exercise 3

1. In groups map a another process from the Hotel’s management system but not one of the service related (core) processes.



Session three

Procedure design

Learning points:•To understand when procedures may be required•To understand how to construct procedures and linkthem to process activity•To know the mandatory procedures needed for ISO9001:2000.



Management system structure: multi-level mapping

Management System

A process A process

‘the what is done’

A procedure

‘the how it is done’

Owner - Director

Owner – Process Owner

• Measure business performance finance, customer process, innovation

• Measure efficiency and effectiveness

• finance, customer process, innovation

Training Guide

Photograph



ISO 9001:2000 Requirements

Documented procedures are required to meet the Standard (see below)

• Preventive action• Corrective action• Control of documents• Control of non-conforming product• Control of records• Internal audits.



Tips

• Start with a verb

• Don’t cover more than 1 process activity box

• Don’t be concerned with linking, it’s in the process

• Don’t need scopes, responsibilities etc.

• Use bullet points



Exercise 4

1. Prepare a number of procedures for an activity in the process you have designed



Session four

Process measurement and monitoring

Learning points:•To understand how to link process performance to theoverall organisation•To know how to select the correct key performance indicators.



Process basedperformance indicators

1. Process performance indicators linked to the purpose of a process

2. Process performance indicators which measure the outcome of a process in terms of volume, cost, time, safety & quality i.e. business results

3. A metric, a percentage not a target.



Impact on typical scopeHigh Performance Organisations

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’



KPI business examples•Number of sales leads / Number of sales achieved

•Number of deliveries made on time / Number of deliveries made

•Number or value of credit notes raised / Number of orders delivered

•Average debtor day

•Number of staff leaving within 3 months / Total number of staff

•Total sickness and absence days / Total work days available

•Number of products not to specification / Total number of products

•Number of customers leaving / Total number of customers

•Individual customer value / Total number of customers.



Process KPIs & ISO9001:2000

Outcome

(efficiency ofthe process)

(effectivenessof the process)

8.2.3 – Monitoring &measurement of

processes

8.2.4 – Monitor &measurement

of product



Exercise 5

1. Develop effectiveness and efficiency key performance indicators for the processes you have mapped.



Session five

Facilitatingprocess mapping

Learning point:•To understand the role of the facilitator.



Facilitators roleThe facilitators role could include:

• Helping the process owner to map the process with others as required•Helping to identify KPIs based on the purpose of the process•Providing training on process and systems management•Not getting involved in the detail of the process but concentrating onhelping create a good processApplying best practice in business process mapping•Ensuring that a consistent level and ‘feel’ to the process and the system is achieved•Managing the ‘pace’ of the meeting.



In summary

Build a process based on its purpose

Ensure the processaligns with

organisational objectives

Communicate & runthe process

Measure performanceAgainst targets

Improve theprocess based

on results



Session six

Skills practice



Exercise 6

•Identify a process for your organisation

•Map the process from that system

•Identify process performance indicators



Guidance, advice & support

In partnership with

The High Performance Organisation LtdTel. +44 (0)1604 470837

[email protected]

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