Process View of Organization describes elements of business process. defines. Defines the process, factors determining effectiveness of a process. How these elements can help in performance evaluation.
3. THE PROCESS VIEW OF
ORGANIZATIONS
• Introduction: The process view considers any organization, or
any part of an organisation, to be a process that transforms
input into outputs as shown in the Fig 1.1.
FIGURE 1.1 The Process View of an Organization (Black Box)
To evaluate and improve the performance of a process- we
must examine the transformation of inputs into outputs. The
following five elements of a process characterize the
transformation:
4. Five elements of Process that facilitate transformation.
1. Inputs and outputs.
2. Flow units.
3. Network of activities and buffer.
4. Resources.
5. Information structure.
5. 1. Inputs and Outputs : Input refers to any tangible or intangible
items that flow into the process from the environment; which includes
raw materials, component parts, energy, data, and customers in
need of services.
Outputs : Outputs refers to any tangible or intangible items that flow
out of the process into the environment; such as finished products,
processed information, material, energy, cash, or satisfied customers.
2. Flow Units The second step in establishing a process view is
obtaining a clear understanding of the flow units—the item—being
analyzed. Depending on the process, the flow unit may be a unit of
input, such as a customer order, or a unit of output, such as a
finished product. The flow unit can also be the financial value of the
input or output. For example, the flow at an Amazon warehouse can
be analyzed in terms of books, customer orders, or dollars.
6. Table1.1 lists some generic business processes and identifies the flow units that move through
the input–output transformation.
7. 3. Network of Activities and Buffers: The third step in adopting the
process view is describing the process as a network of activities and
buffers.
An activity is the simplest form of transformation; it is the building
block of a process. An activity is actually a mini-process in itself, but
for our purposes of process evaluation and improvement, we are not
concerned with the details of any specific activity, so a black box view
of the activities will suffice.
For example, when studying an interorganizational process such
as a supply chain that includes suppliers, manufacturers,
distributors, and retailers, it is enough to view each organization
as one activity or black box rather than looking at all the activities
that take place within each organization.
8. A buffer stores flow units that have finished with one activity but are
waiting for the next activity to start. For example, a patient who has
registered at an emergency room waits in a waiting room to see the
doctor. Similarly, cars that have been painted wait in a storage
area before entering the assembly line.
A process, however, may also have a buffer that does not
correspond to any physical location, as in case of customer
orders waiting to be processed. You can think of storage in a
buffer as a special activity that transforms the time dimension of
a flow unit by delaying it. In business processes, storage is
called inventory which is the total number of flow units present
within process boundaries. The amount of inventory in the
system is an important performance measure.
9. Process activities are linked so that the output of one becomes an
input into another, often through an intermediate buffer- hence the
term a Net work of activities and buffer. The network describes the
specific precedence relationship among activities.
Figure 1.2 shows a process as a network of activities and buffers and the routes or precedence relationships
among them.
FIGURE 1.2 A Process as a Network of Activities and Buffers
10. 4. Resources: The fourth element of the process view consists
of organizational resources. From an operations perspective,
resources are tangible assets that are usually divided into two
categories.
•Capital—fixed assets such as land, buildings, facilities,
equipment, machines, and information
systems
•Labor—people such as engineers, operators, customer-
service representatives, and sales staff.
11. Resources facilitate the transformation of inputs into outputs
during the process. Some activities require multiple resources
(a welding activity, for instance, requires a worker and a welding
gun), and some resources can perform multiple activities (some
workers can not only weld but also drill). The allocation of
resources to activities is an important decision in managing any
process.
5. Information Structure: The fifth and final element of the process
view of an organization is its information structure, which shows
what information is needed and is available to whom in order to
perform activities or make managerial decisions.
12. Summary :
We can now define a business process as a network of activities
separated by buffers and performed by resources that transform
inputs into outputs. Process design specifies the structure of a
business process in terms of inputs, outputs, the network of
activities and buffers, and the resources used.
Process flow management, therefore, is a set of managerial
policies that specify how a process should be operated over time
and which resources should be allocated to which activities. This
process view of organizations is the basis for evaluating and
improving organizational performance. We will see how process
design and process flow management significantly affect the
performance of every organization.
13. SELECTED BIBLIOGRAPHY
1. Managing Business Process Flows- Ravi Anupindi
2. Service Operations Management.
3. Intangible Assets and Value creation- Juergen H. Daum.
4. Business Performance Measurement Theory& Practice – Andy
Neely.
