This document discusses business processes and process management. It defines a process as a series of actions designed to achieve an end, and notes that processes take inputs and convert them into outputs. Process management involves planning, monitoring, and improving processes to meet customer needs profitably. Systems models can help understand processes, which managers must effectively oversee at all levels of an organization to integrate its activities.

1. AIM: This unit focuses on the
understanding and skills needed to
manage activities in the workplace to
improve effectiveness and efficiency.

2.  Every business has a reason(s) why it operates.
 An aim is where the business wants to go in the
future.
 A mission statement sets out the business vision and
values.
 Business objectives are measurable targets of how
to achieve aims.
 All companies have a culture, a set of values or
beliefs they follow.
 All functions of the business have to work
together to achieve the aims/goals of the
business.
 Business Process management (BPM) provides
methodology and tools to identify, measure and
improve companies‘ processes operations.

3.  ..Process
 Processes
 Inputs
 Outputs
 Goods
 Services
 Outcomes
 Process Management

4.  PROCESS: A business process or business
method is a collection of related, structured
activities or tasks that produce a specific
service or product (serve a particular goal)
for a particular customer or customers.
 PROCESSES: ―A series of actions or operations
designed to achieve an end‖.
A process takes inputs and converts or
transforms them into output.

5.  INPUTS: These are the resources which are
used in a process.
 There are two main types of resources which
all organisations make use of. They are
People and facilities (which includes all non
human resources such as buildings,
equipment and technology.
 OUTPUTS: Business Outputs are defined as
being two types.
 They are either goods or services.

6.  GOODS: ―Goods would be defined as anything
that anyone wants or needs‖.
E.g: Food and clothing
 Goods are tangible and can be stored…
 SERVICES: ―Services would be the
performance of any duties or work for
another; helpful or professional activity‖.
E.g: Teaching, Emergency services
 Services are intangible….

7.  OUTCOMES: Outcomes are the results or
consequences of a process.
E.g: A faulty manufacturing process is likely
to result in a good which does not meet its
specification. The likely result is that
customers will not buy it or if they do they
will return it.
 Activity 1.

8.  PROCESS MANAGEMENT: Process management is
the ensemble of activities of planning and
monitoring the performance of a process. The
term usually refers to the management of
business processes and manufacturing.
 Process management is the application of
knowledge, skills, tools, techniques and systems.
Thus, to visualize, measure, control, report and
improve processes with the goal to meet
customer requirements profitably.
 Business Process Management (BPM) and Business
Process reengineering are interrelated, but not
the same.

9.  We will look at appropriate systems that improve
organisational performance.
E.g Total Quality Management, ISO9000
 ISO9001 (Family of Standards) promotes the
process approach to managing an organisation.
 ...promotes the adoption of a process approach
when developing, implementing and improving
the effectiveness of a quality management
system, to enhance customer satisfaction by
meeting customer requirements.

10.  In Marketing, the seven Ps refer to the product,
price, promotion, place, process, physical
evidence and people that make up the marketing
mix. They are an extension of the more basic
―Four Ps‖: product, place, price and promotion.
 'Process' refers to the processes and systems
within the organisation that affects its marketing
process.
 Processes are important to deliver a quality
service. Services being intangible, processes
become all the more crucial to ensure standards
are met with. Process mapping ensures that your
service is perceived as being dependable by your
target segment.

11.  In business the words ―process” and “system”
have become interchangeable.
 For example: The ‗Induction Process or System‘
— that is the way in which we bring new
members of staff into the organisation to make
them effective employees as quickly as possible.
 ..‗Production System or Process‘ or the
‗Materials Handling System or Process‘.
 We can use Systems Approach models to provide
an effective method of understanding processes.
 The following diagrams develop this theme.

12. Inputs Outputs
CONVERSION
Land PROCESS
Goods or
services
Labour
Capital Feedback
Machinery

13.  The diagram illustrates simply that inputs are
processed into outputs by converting them.
 The simple systems or process diagram could
represent an individual process.
 Itneeds to be emphasised that all the
activities necessary to obtain the inputs and
to convert them into output (of either goods
or services) are the responsibilities of
managers.

14.  ...Allorganisations operate in an
environment.
 They obtain inputs from it, convert them into
a good or service which is then an output
back into the environment.
 Organisations start with a series of aims and
objectives and complete them by meeting
their goals.

15. ENVIRONMENT ENVIRONMENT
Outputs from Inputs to
other systems other systems
Series of activities
TRANSFORMATION OR
Aims and INPUTS OUTPUTS Organisational
CONVERSION UNIT goals
objectives
Interrelated sub-
systems
Feedback Feedback
 The above is an example of how the technique of
modelling can be used in business.

16.  E.g
of this might be break-even
charts or Gantt charts. Budgetary control
charts, profit and loss accounts are further
examples.
 Otherareas, eg gross and net profit ratios,
are described as equation models (but still
forms of symbolic modelling).....

17.  One of the key tasks that managers have is to manage
business processes.
 ...Management relates to all the activities of the
organisation and is undertaken at all levels of the
organisation.
 It is an integrating activity.
 An influential writer on managing business processes was
Dr W. E. Deming who initiated the Total Quality
Management Approach....
 He insisted that all companies or organisations which
wished to establish and maintain a reputation for quality
must:
• improve existing processes
• innovate new processes.

18.  ...Managers need to manage the process to reduce all
waste and inefficiency.
 E.g:... Inverness Airport has grown spectacularly
quickly in linewith the growth of the city. Despite a
£9 million development some 5–6 years ago it has
outgrown that and now requires a really major
expansion.
• Over 330 aircraft movements per week at the airport.
• 50 per day
• Airport closes at 10 pm, except in emergencies.
• Growth like this emphasises the importance of
managing processes.
 Think about some of the processes which may be
involved in an organisation like Inverness Airport.

19.  Processes that need to be focused on.
 Check in passengers.
 check in baggage
 Handle baggage
 Handle increased aircraft movements
 Car parking
 Transport systems, such as road and rail links
 Waiting facilities for passengers and for those coming to
the airport to
meet passengers and/or to see passengers off
 Air traffic movements.
 Of course it is not just enough to handle all this extra
traffic. It must be done while reducing waste and
inefficiency.

20. Look at a much smaller set-up,
for example the workshop
manager of a franchised garage
in a small town
Q1. What business processes
need to be managed?

21.  Managers need to manage the following processes:
• reception where cars are received from customers
• diagnosis of faults in cars
• provision of standard services such as MOT testing
or routine services
• billing customers.
 The manager will need to manage all these processes
to make sure that available resources are used as
effectively as possible.
 Having mechanics hanging about with nothing to do
or equipment lying idle is simply a guarantee of going
out of business.
 Managing processes involves the manager in
constantly juggling activities to ensure that resources
are as fully utilised as is possible.

22.  A process:‗a series of actions or operations designed to
achieve an end‘.
 Series of actions is designed to convert (or transform)
inputs into outputs.
 Every business process there will be a specific
aim, objective, target or goal.
 Any organisation is likely to have a very large number of
processes.
 Managers are responsible for managing business
processes....
 Processes may be divided up to suit the departmental
structure of an organisation.
 E.g The process of dealing with customers:
 An order from a customer, for instance, may be dealt with
by several different sections in an organisation.
 ...In principle defining a process is straightforward, in
practice it may not always be easy.
 Thus, interrelationship of functions and processes.

23.  What the expected outputs (and outcomes) will be,
ie what exactly does the process have to achieve.
• what the starting point is, eg the process could be
something new, starting from a completely unknown
situation, or it could follow on from
an earlier process?
• what the goal or target is which is expected of the
manager of the process?
• what inputs or resources the process will require?
• what activities and operations will be involved in
converting the inputs into the desired output?
 Designing a business process involves thinking about
the key characteristics of a business process.

24.  Business processes are designed to ensure that
organisations achieve the targets and goals that
they have established for themselves.
 These targets or objectives will depend on the
nature of the organisation.
 For many business organisations this means
making a sufficient level of profit to continue in
business or to grow.
 Charities or local authorities may not have profit
objectives.
 They will however, have equivalent objectives.

25.  ...A charities objective may be to gain a specific
amount of income from donations, charity events
and so on.
 A local authority may aim to provide a specified
service at a stated cost.
 All organisations, whatever their objectives,
have processes and every organisation needs to
measure how well the processes are working.
 This means that managers need to ensure
effective management of all the resources used
in every process within the organisation.

26.  All forms of measurement for processes fall in two
categories. These are:
• quantitative, ie numeric
• qualitative, ie meet the specifications determined.
 In most business processes both categories will have to be
met.
 Obviously there would be little point in turning out a good or
service in large quantities which customers were not
prepared to purchase.
 Another example might be operating a passenger train
service with the trains running almost empty.
 Equally it would be entirely illogical to produce a good or
service which was of such high quality that its costs of
production were such that no customer was willing to pay
the price which would result.

27.  Measuring business processes, therefore, requires
that measures are used to cover both categories
(Quantitaive and Qualitative).
 With modern computer-based systems it is often
possible to combine the quantitative and qualitative
measures.
 Modern production lines, for example, can usually
measure output and test the product against the
quality specification.
 For example, producing something as simple as a
chocolate biscuit would see the final product being
counted then separated into those which pass the
(automatic) test and those which do not.
 Again these two results (which can be described as
outcomes of the manufacturing process) will be
counted.

28.  This will provide three immediate pieces of
information which are vital.
 1. What is the total output? Does it meet
planned levels?
 2. What proportions pass quality tests? Is this
acceptable?
 3. What proportion failed? Is this acceptable?
 If the failure rate (no. 3) is unacceptable
then further investigation is urgently
required to find the process which is faulty.

29.  Most measuring systems use a form of sampling
to check how well a process is working. Most
tend to concentrate on quality measures.
 The best known method of checking a product or
service as it is going through the business
process is Statistical Process Control (SPC).
 This makes use of control charts to monitor the
results of many samples over time.
 If the measures indicate that there may be a
problem with the process, it can be stopped if
this is possible.
 The problem can then be identified and any
corrective action taken.

30.  The best known system of SPC is the ‗Six
sigma‘ approach developed by Motorola.
 It began when the company introduced a
policy of ‗total customer satisfaction‘.
 This meant that products must meet several
requirements:
• be delivered when promised
• have no defects
• not experience any early life failures
• not fail excessively in service.

31.  SPC involves using statistical techniques to
measure whether the variations in a process
are within acceptable limits.
 All processes vary to some extent, eg people
do not always perform a task in exactly the
same way.
 SPC therefore is a way of checking whether
the variations remain within an agreed range
of tolerance.

32.  Motorola set very strict tolerance limits and originally
concentrated on reducing defects in manufacturing.
 The company soon realised, however, that many of
the defects stemmed from deficiencies in the design
of the products.
 This meant that as well as concentrating on getting
its processes as effective as possible it also tightened
up its design specifications.
 It is very important to do this but it is possible that
problems which arise may stem from the design of
the product or service.
 They may also be the result of poorly designed
processes.

33.  Incidentally, ‗Six sigma‘ refers to the range within which
deviations in the process will be tolerated. (Sigma is a letter
in the Greek alphabet which is used to denote a statistical
concept called standard deviation.)
 Six sigma means that a defect rate of 3.4 defects per million
is the level which will be tolerated. Anything above this is
unacceptable.
 There are a large number of other techniques which can be
used to measure business processes. The list below gives
some examples:
• Break-even charts
• Cost benefit analyses
• Pareto analysis
• Budgetary control systems
• Fishbone diagrams
• Decision trees.

34.  The above techniques can be used for measuring the
effectiveness of business processes as ways of developing new
business processes and also for measuring the effect of changes
in business processes.
 The decision regarding which one of these (or which number of
them) will be used will depend on a number of factors including:
• the particular process which is being measured (eg Motorola
were measuring manufacturing processes)
• the importance of the process to the organisation (this may
mean more than one method of measurement)
• the resources required by the technique (people may need to
be trained to use the techniques and this may take longer for
some than for others)
• the use to which the information on measuring the process will
be put.

35.  PROCESSES: ―A series of actions or operations
designed to achieve an end‖.
 A process takes inputs and converts or
transforms them into output.
 PROCESS MANAGEMENT: Process management is
the ensemble of activities of planning and
monitoring the performance of a process. The
term usually refers to the management of
business processes and manufacturing.
 Process management is the application of
knowledge, skills, tools, techniques and systems.
Thus, to visualize, measure, control, report and
improve processes with the goal to meet
customer requirements profitably.

36.  In business the words ―process” and
“system” have become interchangeable.
 We can use Systems Approach models to
provide an effective method of
understanding processes.
 SIMPLE SYSTEM OR PROCESS DIAGRAM
 One of the key tasks that managers have is to
manage business processes.
 Management relates to all the activities of
the organisation and is undertaken at all
levels of the organisation.

37.  Managers need to manage the process to reduce
all waste and inefficiency.
 Business processes are designed to ensure that
organisations achieve the targets and goals that
they have established for themselves.
 All organisations, whatever their
objectives, have processes and every
organisation needs to measure how well the
processes are working.
 All forms of measurement for processes fall in
two categories. These are:
• quantitative, ie numeric
• qualitative, ie meet the specifications
determined.

38.  With modern computer-based systems it is
often possible to combine the quantitative
and qualitative measures.
 Most measuring systems use a form of
sampling to check how well a process is
working. Most tend to concentrate on quality
measures.
 The best known method of checking a
product or service as it is going through the
business process is Statistical Process Control
(SPC).
 The best known system of SPC is the ‗Six
sigma‘ approach developed by Motorola.

39.  SPC therefore is a way of checking whether
the variations remain within an agreed range
of tolerance.
 There are a large number of other
techniques which can be used to measure
business processes. The list below gives some
examples:
• Break-even charts
• Cost benefit analyses
• Pareto analysis
• Budgetary control systems
• Fishbone diagrams
• Decision trees.

40.  Theabove techniques can be used for
measuring the effectiveness of business
processes as ways of developing new
business processes and also for measuring
the effect of changes in business
processes.