More on Processes and Systems



16 May 2013

The following post, from almost a year ago, discusses processes, then briefly mentions systems. I like the post as it pertains to processes. This time, I have added comments to help clarify the distinction between processes and systems.  — C.H.




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On Processes and Systems


From: 21 June 2012


 


For a manufacturer to be Sustainable — to “thrive in perpetuity” [1] — requires the tools necessary to become and remain competitive in a rapidly changing global economy. Many of those tools, including ISO standards and the Baldrige criteria emphasize “processes”. While almost everyone has a vague idea of what “process” means, most are hard pressed to be specific. This post is intended as a refresher on business processes as they relate to improving competitive posture.   — C.H.


 


The Process Proposition




Edwards Deming [2] taught that manufacturing operates through an interactive set of processes, and that outputs, such as throughput and product quality, are determined by these processes.





Process diagram

The Process Proposition – the idea that manufacturing operates through systems of interacting processes – is quite powerful. Processes are viewed as entities that can be controlled and managed. If the inputs to a process are known and the conditions under which the process operates are controlled, then the outputs from the process become predictable. Product quality and throughput rates are understood as characteristics of the process, rather than as “art” or as indicators of individual effort levels.




Recycle MoibusISO 9000 [3] defines a process as “a set of interrelated activities which transforms inputs into outputs”.  (Notice that this definition is not limited to shop floor processes — it applies to all business processes, including bookkeeping processes and training processes.) Practically speaking, there is broad flexibility in drawing the boundaries that define processes. For example, consider baking a cake. Simplify the example such that only three “interrelated activities” are involved: measuring, mixing and baking. Whether this should be considered as one process with three activities, or as three separate processes (measuring process, mixing process, and baking process) is a Zoom Lens [4] choice.




Statistical tools [5] can be employed to measure the extent of variance in process outputs over time. Positive product attributes (such as throughput rate, physical properties, appearance, etc) are increased and negative product attributes (including defects, personal injuries, power consumption, environmental concerns, and so on) are decreased through improved control of process inputs and processing conditions, and through improvements to the process itself. Statistical tools can also confirm that improvement has, in fact, occurred.




A Caveat




The proposition “if the inputs to a process are known and the conditions under which the process operates are controlled, then the outputs from the process become predictable” is, at best, a simplification. It is often necessary to not treat the process as a “black box” and to consider relationships and interactions among the set of interrelated activities that constitute the process.




Eliyahu Goldratt’s The Goal [6], along with his many subsequent books, warn us against optimizing “interrelated activities” individually, without consideration for the effects of interrelationships on outputs at wider zoom out levels. Further, Systems Analysis [7] demonstrates that the responses from sufficiently complex (lots of interrelationships) processes, while in principle predictable, may be non-linear.



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It is easy to confuse processes and systems. The purpose of a process is to convert inputs into outputs. The causal relationships between the inputs and the outputs are sufficiently clear that the Process Proposition holds.




However, the point of Goldratt’s The Goal is that the purpose of a manufacturing business is to earn a profit, rather than to convert inputs to outputs — conversion, in other words, is means toward an end. The business itself is a system, comprised, in part, of an interrelated set of processes. The causal relationships among the elements (the processes) comprising this system (the business, with its purpose) are usually quite complex.




The Process Proposition makes improving processes straightforward, if not easy. Improving the profitability of a business is usually neither straightforward nor easy, as you may have gathered. The Goal teaches that optimizing processes may retard, rather than enhance profitability. Work on your processes — business processes as well as manufacturing processes — but, as you do so, keep your eye on the goal. — C.H., May 2013




Chuck - California CoastThoughtful comments and experience reports are always appreciated.




…  Chuck Harrington
(Chuck@JeraSustainableDevelopment.com)




P.S
: Contact me when your organization is serious about pursuing Sustainability … CH




This blog and associated website (
www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published on Wednesday evenings.









[1]
Werbach, Adam, Strategy for Sustainability, HBR Publishing, Boston (2009), pg. 9


 



[2] Deming, Edwards, Out of the Crisis, MIT Press, Boston (2004)


 



[3] ANSI/ISO/ASQ Q9000-2000, published by American Society for Quality, Milwaukee WI, (2000), section 3.4.1


 




[5] These “statistical tools” comprise the field of Statistical Process Control. A familiarity with, and understanding of SPC is essential to properly controlling one’s business processes. See, for example, Donald Wheeler and David Chambers, Understanding Statistical Process Control, Second edition, SPC Press, Knoxville TN (1992)


 



[6] Goldratt, Eliyahu, The Goal, Third edition, North River Press, Great Barrington MA (2004)


 



[7] For a readable introduction to systems and their behavior, see Donella (Dana) Meadows, Thinking in Systems: A Primer, Chelsey Green Publishing, White River Junction VT (2008)