Process Design Appraisal [abridged] Research from the Artige Company

Process Design Appraisal [abridged]




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		Refer to the full article to see how this synopsis was arrived at.

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Overview

Analysis

Conclusion




Overview		One of the questions that is frequently asked of the Artige staff goes along the lines of "what is the difference between (take your choice): TQM; Quality Management; Kaizen / continuous improvement; ISO 9000; reengineering; change management / BPR; BPM; six sigma; lean manufacturing". So we decided to write up a response and post it as an article in a living document for all to read. This allows us to update the article as new Operations Research (OR) buzzwords make their way into the business world. We also added a section covering the misgivings of OR usage to solve management problems, as it seems everyone has a different answer.

		The original article uses the reductionist tools of scientific analysis that were derived during the scientific revolution (makers of the "paradigm shift"), rely upon mathematics for modeling and natural laws of physics for constraints, to impartially analyze the process design methodologies. In this way hype factors do not play part to influencing the results of the analysis. It also provides for an apples-to-apples comparison of the different OR methodologies that are available to the business practitioner. We rely upon these doctrines in an attempt to explain process design principles in a transparent manner. We feel that using cause-and-effect based methods is more practical and comprehensible than relying solely on model-based methods. Only the pertinent elements of the analysis are presented here, so it can be read quickly, and are not encumbered by the numerous details that were required to compile the analysis.



Analysis		Our first concern when assessing the process design methodologies was to determine which methodologies we would consider. This was our way of defining the challenge we were taking on, and at the same time, assert what we saw a process design methodology to be. For this assessment we are considering methods that one can use to conceive processes and assemble practices that allows one to execute a business plan, or realize the principles of the business' mission. This will include both manufacturing (physical business) and service industry (task performed as an agent, in lieu of the service customer performing the task.). Many of the process design methodologies are associated with quality initiatives of one kind or another. There is a reason for this, which will be explained further on. For the first pass of the analysis we will consider the following popular initiatives (descriptions are the ones we use at Artige):

		TQM	List of tools available to the quality company
		Quality Management	Based upon Quality Control / Quality Assurance
		Kaizen	Small improvements to processes
		ISO 9000	Process that are audited
		Reengineering	Process replacement and elimination
		Change Management	Method to institutionalize change of processes in an organization
		BPM	Just tools to create enterprise applications
		Lean Manufacturing	Process design to eliminate waste
		Six Sigma	Process control applied to process operation, which drives changes to process design.


		Then we had to establish the criteria that we are assessing the process design methodologies against. Process design has its roots in operations research and statistics. It is an exercise in sequencing tasks so that resource consumption is minimized. To help us understand process design, we need to separate this concept into its smallest components. We can resort to physics to give us some definitions that we need: After all, process design relates to the organization of a system, which derives its legitimacy from the laws of physics, and consequently with thermodynamics. This reliance on physics presents us the bonus ability to do an impartial analysis. These physical criteria we will designate as parameters going forward, and a list of them appears below:

		Energy	Resource that provides the capability to effect a change.
		Distance	Difference between two points in space.
		Work	Energy consumption, or force expended over distance.
		Stock	A resource that provides a physical substance.
		Task	A well-defined set of work performed over a course of time. It can be expressed as the summation of all work involved, divided by the time it took to perform all of the well-defined work.
		Product	Desired output from a system.
		Waste	Undesired output from a system.
		Rate	Time to perform a task.
		Lag	Time interval between tasks.
		Value	Work and resources that were required to produce only the desired product.


		The parameters listed above refer to a system, so it shows that we need to align our processes within a systemic view. A system is defined to be a black box that accepts an input and transforms it to create an output, with the ability to accept feedback from the process. With this definition of a system, the alignment of a process is straightforward; the inputs are energy and optionally stock, the transformation is the work, and the output is modified stock or satisfied customers that has had work applied to them. Refer to our popular "Toothbrush Factory" exercise to better understand the black box approach to process design.

		Another important characteristic is that the parameters can themselves be characterized as being first order or second order. First order parameters, called primary parameters, would apply to the direct operation of the process, monitoring the consumption of resources and verifying that the transformation products are what one desires. Second order parameters, called secondary parameters, consider each process as a resource into a larger process, that being the business plan. It is the secondary parameters that relate to the fact that processes themselves need to be changed or replaced or eliminated altogether as a business grows.

		So now that we know what parameters to look for, we explored each process design methodology and sought out the characteristics for each methodology. At this point we also had enough data that we could judge whether the selected popular process design methodologies are indeed techniques that one can use to design processes with. This endeavor revealed two points of interest. First of all, there were two methodologies that turned out not to be methodologies, rather philosophies or toolsets. They were TQM and BPM (see the full article for reasons why). Going forward we will not be considering these practices. The second discovery was that each and every one of the remaining methodologies was able to handle primary process design methodology similarly. So on a purely physical basis, we found no difference between the process design methodologies for primary parameters. On the other hand, we found differences in how the methodologies handled the secondary parameters.

		On the other hand, we found differences in how the process design methodologies handled the secondary parameters. To restate the latter discovery more exactly, what we found was that every true methodology addressed the parameters to one extent or another. The differences lie how the particular methodology focused on the primary or secondary order of the parameter. Some methodologies focused on the primary order, while the remainder focused on the secondary order. Translated to familiar terminology, some methodologies focused on operating a process while the others focused on the interaction of the processes with the business plan. Some methods would alert when a process was running outside of specifications, while others noted that a process was not delivering value according to the enterprise's mission.

		The reader might recognize that the difference in secondary parameters might be the source of the term "management du jour". What we have shown is that there is more than one method to design processes that attempt to fulfill the vision of an enterprise's mission. All methods are physically valid and can accomplish the business goals. The difficulty is in recognizing which methodology is correct for your business, and when it is appropriate to be deployed. This is why OR is confusing, in that it does NOT offer a single correct answer; one will have to understand the business' mission in order to select an economically viable process design methodology. Selecting a methodology that does not fit the business mission will still "work", but can be painful in resource consumption, and possibly in emotional terms also.

		Another common business practice truism can be extracted from this existence of primary and secondary parameters, that being the notion of a leader vs. caretaker. These two managers can be assigned directly to the parameter types. The caretaker is a manager that runs a business according to existing processes, maintaining status quo, not having any need to alter current business practices. Those issues are the primary parameters. The leader is one who manages according to the business plan, who has the ability to recognize processes that do not work and change them as required. That would be covered by the secondary parameters.

		One observation brought out by the analysis was that the process design methodologies provide the ability to change a process within a variety of time periods. Most methods provided small changes over long periods of time, which we could easily classify as incremental. Some methods provided large changes over short periods of time, which most business practitioners would considered to be radical.

		Organizations would be naturally attracted to one process design methodology or another based on their culture, as the methods are just one manifestation of an organization's culture, or methods of executing a business plan. The simple resemblance would be that a rules-based or bureaucratic organization would be more comfortable with the incremental methodologies. A start-up firm or a flexible organization might instead be comfortable with a radical methodology.

		We have summarized the observations of this appraisal in a diagram, presented below in Figure 1. First, the figure shows that the process design methodologies all emanate from TQM, which in itself emanates from operations research and statistics. Then the process design methodologies are mapped along two axes, representing the two key features that were discovered during this analysis. The vertical axis shows how much focus the design methodology provides for the primary parameters vs. secondary parameters. The horizontal axis shows how aggressively the methodology is advocating change, varying from incremental to radical.


		Figure 1

		Process Design Considered Against Parameter Category vs. Level of Change

		The above figure shows that the majority of the process design methodologies have an incremental focus. This would not be surprising, as it is human nature to rely upon a known entity and avoid change when possible. It also shows that most processes are geared towards handing the primary parameters. This would reflect the fact there the primary parameters are simpler to manage, where the secondary parameters are more difficult to handle, or even conceptualize. This figure shows that the most opposite process methodologies would be ISO 9000 and reengineering. This would make sense, as ISO 9000 is the epitome of bureaucracy, whereas reengineering would have absolutely no concern that the existing rules were disposed of and new ones deployed.

		One important point was expounded upon with relation to the various process design methodologies. It was noted that the methodologies were impacted to a greater extent by a primary or by a secondary parameter. What we found is that a successful business design process methodology will need to take into account multiple sets of criteria. Most process design methods focus consciously on satisfying the criteria of the primary parameters, just to make sure the process functions as needed. Problem is that the transformations that the process is using will be used for multiple processes at the same time, with these additional criteria sets being ignored, as they are not directly attached to the design task at hand.



		Figure 2

		Fish State Diagram, in the "Jonah State"

		Ignoring these secondary criteria sets results in a lower quality process design. Our solution is to map the inputs and outputs between the primary and secondary processes, which should allow one to capture all criteria sets, and see how they are related to each other. We also made up a figure to demonstrate this relationship, based upon fish models that one might have seen used in other design situations. We call this model the Jonah fish model, presented in the Figure 2 above. More discussion on these fish models was presented in the full-length article.



Conclusion		This article appraised nine popular business practices, in an attempt to see what the difference was between them. It found that seven of the practices were true process design methodologies, and two were either a philosophy or a toolset. This article used physical laws, called parameters, to compare the methodologies in an attempt to impartially determine the differences. During the course of the analysis it was discovered that the parameters can be invoked on two levels of process design; primary that related directly to the process in question, and secondary that related to how the process interacted with a firm's business plan. It was found that all of the methodologies handled the primary parameters, but differences were revealed in the secondary parameters. This means that all of the appraised process design methodologies can handle day-to-day operations of a business. The main reason to select one methodology over another will be related to how closely its secondary parameter handling matches that to the firm's culture. Two criteria can be used for this selection. One relates to the level of change that a firm wishes to endure, incremental or radical. The other criterion relates to the desire for process management as it relates to the business plan, if one wishes to have it stay the same for all time or comfortable with processes that are constantly changing. If anything this article has found, is that there is no right or wrong decision regarding the selection of one business practice or another.




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Last updated:
20-June-2005 16:02z