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Process approach – 7 reasons why it is the most important quality principle


Just as each gear contributes to the operation of the mechanism, each process identified in the organization contributes of its effects. In this article, you will learn why, from all the quality principles, process approach is – in my opinion – the most important.

Qualitywise.pl, Agata Lewkowska, Process, Process approach, IATF 16949, ISO 9001, QMS

 

How to understand the process?

A process is understood as events that occur over time. These events follow each other leading to the formation of causally related changes.

process approach, SZJ, QMS, quality, quality management, 7 quality management principles

The process can be specified broadly or narrowly. Broad definitions emphasize the overall (integrated), purposely and sequential (or time-simultaneous) nature of the process. Narrow, on the other hand, describe the process as a consecutive activity (activities, operations) concerning the selected area of activity of the company. Let’s see how the process is described in the literature:

  • ISO 9000:2015: “a process is a set of interrelated or interacting activities that use process inputs to deliver the intended result”[1],
  • M. Hammer and J. Champy: “a set of activities requiring a “contribution” at the entrance and giving an output result of some value to the customer”[2],
  • C. Adair and B. Murray: “a series of tasks or phases (steps) which, on the one hand, are supplied with “raw materials” (materials, information, people, machinery, methods) and, on the other hand, lead to the manufacture of a product (material product, information, service) which is intended for use for specific purposes by the recipient for whom the product is manufactured”[3],
  • H. Harrington: “transforming specific inputs into expected results, and these results, as inputs to other processes, do not necessarily directly create added value for the end customer”[4] (this author stresses that the process client can also be inside the organization).

All process characteristics contained in the above definitions are reflected in the process requirements of ISO 9001:2015. Going forward, it should be mentioned that a common way of describing the process is the so-called turtle diagram presented in the figure below.

 

process description in a tutle diagram

Process approach – where does it come from?

Frederic Taylor

The concept of organising a company in a process manner is not new. Processes as a category used to analyze the organization’s activities were recognized as early as 1911 by Frederic Taylor in the work “Principles of Scientific Management”. Although over the centuries some publications have discussed a process approach (e.g. F. Nordsieck[5]), th ey did not lead to its popularisation. In the 1950s, the concept of a process approach to structualise and formalise production management was restored by automating and streamlining the production process[6].

Total Quality Management

As in the 1970s, management was focused on productivity, so in the 1980s it focused on quality through Total Quality Management (TQM) philosophy, which increasing importance has led to thinking in the process[7] cathegory through a collection of eight[8] principles, including a process approach.

The M. Porter value chain and Six Sigma

In addition to TQM, other process-related concepts were developed in the 1980s, namely the Michael Porter value chain and the Six Sigma method. For the former, actions are presented as processes with an emphasis on those that generate added value for an internal or external client. Six Sigma’s goal, on the other hand, is to reduce volatility in key characteristics to a level where no defects are very unlikely (3.4 defects per million possibilities). However, in order to identify the source of the problems, this method uses a process approach, as the developers of Six Sigma “decided to improve all operations of a given processes simultaneously”[9].

Business Process Reengineering

All previous approaches have created process awareness resulting in the first publication of Michael Hammer in 1990 initiating the concept Business Process Reengineering (BPR)[10]. Reengineering is based on radically improving processes in the enterprise by redefining and designing them together with the total rejection of their existing organization, leading to a breakthrough improvement in performance, such as costs, quality, service and speed[11].

Thomas Davenport and James Short are also considered to be the creators of reengineering. They combined it with IT giving it the rank of “the most powerful tool of the twentieth century (…) new industrial engineering[12].” All these reengineering authors also emphasize in their concept the role of the entire process, not specific tasks or business functions.

Business Process Management

BPR has evolved to improve business processes into Business Process Management (BPM) with the publication of “BPM: Third Wave” in 2002 by H. Smith and P. Fingar.  It has aroused considerable interest and discussion[13], as well as launched an increase in both scientific and professional publications on BPM[14].

Business Process Management is a difficult concept to establish: on the one hand, it is strongly linked to process-oriented techniques and tools such as process modelling or material flow management, and on the other hand it can also be considered a management concept that has emerged from the achievements of predecessors such as Total Quality Management and Business Process Reengineering[15]. In general, Business Process Management should be understood as achieving the goals of an organization by improving the management and control of basic business processes.

ISO 9001

Today, the process approach is most popularised by the certification of management systems for compliance with ISO 9001:2015. The standard-complying organization shall identify the processes present in it, together with the determination of their sequence and interdependencies, as well as the methods of supervision and methods of evaluating effectiveness, to continuously implement the actions necessary to achieve the intended results and to be able to continuously improve processes[16].

Process-oriented management approach

In ISO 9000:2015, section 2.3.4.1 provides a declaration of process approach which states: “Consistent and predictable results are achieved more effectively and efficiently when actions are understood and managed as interrelated processes that function as a coherent system.” Further in section 2.3.4.2, the standard states: “QMS consists of interrelated processes. Understanding the mechanism of creation in such a result system enables the organization to optimize the system and its effects.

It follows that the essence of process-based management is the idea that each organisation has a system of interrelated processes, each of which affects the achievement of the organisation’s objectives. To meet them, there is a need to identify the elements that make up the process approach.

 

Structural recognition of the process approach (process as an object of construction of the organization)

In this respect, the process approach consists in identifying the related activities and defining their interdependencies. It reffers to an organisation in which all processes are interconnected at each level of management, as well as for all management functions and functional areas. This indicates a link with system theory. Systemicity should be understood as the consideration of elements, properties and relationships for any problem in cause-and-effect relationships, as internal and external dependencies in relation to the environment[17].

Therefore, the essence of systemic thinking focuses on how an object interacts with other elements of the system to which it belongs[18]. It can therefore be said that processes form the basis of a systemic approach to management, which means identifying, understanding and managing interconnected processes of an organization in a systemic way and based on understanding the idea of the system and the role of the processes that make up the management system.

In such a spirit, a duly established process-based management system should have the following characteristics[19]:

  • cohesion – can react to external stimuli,
  • effectiveness – to what extent the planned actions are implemented and the planned results achieved,
  • efficiency – defines the relationship between the results achieved and the resources used,
  • synergies – as a whole, the system is more than a set of individual activities that make up it,
  • prevention – a system aimed at preventing the occurrence of problems, and not only at eliminating their effects.

Functional approach (planning, organizing, leading, controlling)

In this respect, the process approach is considered in the context of classic management functions, i.e. planning, organizing, leading and controlling. According to them, process management plans the structure of processes, organizes (groups, coordinates) activities and resources, motivates employees to achieve the objectives of the process and controls the degree of their achievement. Such an approach means a link between process management and human resources management (e.g., selection of employees, way of motivating) and the need to carry out a control function in the functional sphere of the organization[20].

To manage processes efficiently, defining them in your organization is a prerequisite, but not enough. In line with the control function of the classical management school, it is necessary to ensure that the actual activities are in line with the planned ones. Control therefore relates to objectives, which implies that process management is focused on achieving the organization’s objectives by controlling and improving processes.

The control can be carried out by indicators such as effectiveness or efficiency. A clearly formulated goal with a deadline becomes an efficiency standard that allows you to evaluate your progress and take all measures needed to ensure that all of your organization’s resources are most effectively used to achieve the corporate goals. A modern company organized in a process way is designed to increase the efficiency of all activities that result in an increase in value for the customer.

The aim of process management in functional approach is to:

  • “increasing the efficiency of human activities by structuration activities according to the criterion of added value generation,
  • structuralizing of activities by defining: activities, decisions, documentation and their flows,
  • a description of the process in the enterprise in a dynamic system that considers the time factor,
  • a description of the process in the enterprise in a spatial arrangement, that is, assigning responsibility for each element of the process to the individual organizational units of the enterprise,
  • the dominant role of the customer.”[21]

Functional approach (elements of organizational structure)

In this respect, the process approach refers to elements of the organisational structure. Management rules proposed by F. Taylor’s work gathered in a direction known as scientific work organization was based on a division of labor and an organisational structure built around functions, where activities were carried out by non-cooperating functional structures, pursuing individual objectives, often inconsistent with the company’s strategic objectives[22].

Almost 100 years later M. Hammer (the creator of BPR) predicts that the 21st century corporation will be built around the processes, not around the functions[23].

In a functional approach as elements of organizational structure, functions are managed separately, the organization has the characteristics of a silo with low coordination capacity and low market orientation. A functional approach promotes difficulties in integrating and communicating between departments, resulting in inefficient management of the organization, limiting its operation. Because the process approach is the focus of business managers, the organization should focus on processes, not on jobs, functions, or tasks assigned to employees. The whole organization creates a team whose individual cells do not compete with each other but support each other during the implementation of processes. Thus, the organization moves away from treating organizational units or jobs as a source of its success.

It is not easy to eliminate the functional approach,

 

because, regarding the resources used, the establishment of functional support teams for each individual process forces the allocation of functions per process. This is costly if the high workload of the tasks of the in-question specialized cells cannot be ensured; economic considerations support the preservation of functional type structures.

The coexistence of two structural dimensions creates a matrix structure of the organization.

Specialists studying matrix structures found that “granting the same power to horizontal and vertical lines does not have good results. For an organization to function, one of them should always have a dominant position.”[24] Thus, the existence of a functional organisational structure does not necessarily mean a complete absence of a procedural structure.

Subject approach (resources involved in the process)

This approach is analyzed in the context of resources.

Classical production factors in economy are work, capital and land.

Taking them into account human resources, financial resources and fixed assets involved in the process will therefore be the subject of process approach.

The analysis of the process approach in question should start by indicating that in the organization the top management, in its decision-making role, allocates resources and allocates responsibilities. In the context of a process approach, it designates its owner for each process defined in the organization.

This role is extremely important because it brings together the authority of power and responsibility for the process (hence there is a concept among some researches that it is important for the process owner to be a representative of the management in the organization[25]).

The owner is authorized by the top management for assigning resources to the process, as the person who manages the process knows its needs.

The literature states that the established role of process owner and the involvement of top management are a key success factor for the outcomes of the process approach[26].

Thus, regarding the abovementioned factors of production in the classical sense in the area of financial resources and fixed assets, their allocation to processes is obvious, i.e. the allocation takes place on the basis of the needs necessary to meet the objectives set by the process, while in the area of human resources the process approach requires additional consideration:

  • whether roles in the process have been defined and how people are assigned to those roles,
  • whether the employees have the appropriate competences and whether the organization provides them,
  • whether the organization manages the knowledge and how it communicates it,
  • whether effective communication has been established,
  • whether employees are motivated,
  • whether process career paths are established,
  • whether teamwork has been established,
  • whether empowerment has been established,
  • or the top management supports the implementation of processes.

To sum up the presented approaches, the process approach consists of:

  • identification of processes, determination of sequences and links between them,
  • establishing the process structure,
  • supervision of processes by monitoring the effectiveness and efficiency of processes,
  • process improvement,
  • allocation of resources around processes.

 

Let me now tell you why, within all the quality principles, process approach is – in my opinion – the most important.

 

1. The conditions under which current management takes place have changed!

The changes of the modern world are taking place more and more often, faster, in an increasingly unpredictable environment. These include strengthening competition, globalization, increasing product complexity while simplifying processes to generate added value, increasing the importance of individual customer needs or ever shorter product lifecycles.

Flexibility is needed in response to these changes in the environment. When adapting to external requirements, an organization m.in focus on and improve its processes. The need to be open to process improvement is due to their dynamism to make the fastest and most beneficial changes. As a result of successive actions and their cause-and-effect relationships, the process allows you to adapt to the conditions as quickly as possible.

2. Not only ISO 9001

Today, process management goes beyond ISO 9001. It fits into the broad concept of Business Process Management (BPM), which covers all aspects of the company e.g. strategy, culture, IT. The importance of BPM is growing, as reflected in dedicated international journals (e.g. Business Process Management Journal, conferences (Business Process Management Conference), dedicated courses at universities (e.g. Ghent University, Belgium), or finally in the growth of publications. This indicates that this is not just a temporary fashion in management.

3. The process approach reflects the other principles of quality management

In line with the idea behind the process approach also described in this article, it should not be surprising that the process approach is based on the adoption of other principles of quality management in processes by: customer orientation as a result of meeting its requirements, involvement of management through the establishment of processes, inclusion of all employees in the implementation of processes, improvement by making decisions based on facts arising, for example, from process monitoring and management of relations with stakeholders, which can be an internal customer or vendor defined at the process input.

4. The process approach reflects Deming’s PDCA cycle

Deming’s PDCA cycle is a very fundamental principle from the point of view of quality management that defines the functioning of an organization. It is quite easy to see its link with the functional approach of the process considered in the context of classical management functions, i.e. planning, organizing, conducting and controlling.  

Deming cycle PDCA

5. The process approach directly contributes to improving the financial outcome of the organization

There are a lot of publications available on how directly the process approach contributes to increasing the financial performance of the organization by: reducing the long duration of operations in processes and increasing productivity, increasing quality and thus reducing costs of poor quality, flexibility in responding to changing needs in customer orders or even increasing market share and increasing competitiveness.

6. The process approach fosters innovation

By engaging in innovation, internal and external customers increase the effectiveness and speed of innovation in the organization. It is possible to use various resources, knowledge and technologies, in particular external ones, which the organization does not have at its disposal. This implies so-called open innovation.

7. Customer, customer, customer!

According to the idea of Michael Porter, added value is created for the customer. A process-oriented organization is focused on meeting the needs of customers (internal and external), while a function-oriented organization strives to achieve its goals.

 

In conclusion…

The 7 most key factors outlined above are the essence of my decision to examine the process approach described in my doctoral thesis. Of course, each of these factors can be supplemented by more accurate arguments published by researchers, which further emphasize its rank. Thus, it is impossible to avoid the conclusion that a process approach, at odds with the functional approach, is the best solution for modern organizations.

 

Hope you found this article interesting.

Let me know in the comment and sign up to the newsletter!

Thank you for your presence.

Agata Lewkowska Ph.D.

If I can help you with quality management issues, please contact me. You may also join me in my private group on Facebook: ISO 9001 & IATF 16949 QualityWise Group.

For people who want to know more:

Knowledge must have a solid foundation to avoid information noise. Therefore, the article was based on the following literature:

[1] ISO 9000:2015, Quality Management Systems. Basics and terminology, point.3.4.1

[2] Hammer M., Champy J., Reengineering in enterprise, Neumann Management Institute, Warsaw 1996, p. 49

[3] Adair C., Murray B., Radical reorganization of the company, Scientific Publishing House PWN, Warsaw 2002, p. 134

[4] Adesola S., Baines T., Developing and evaluating a methodology for business process improvement, Business Process Management Journal 2005, No. 11 (1), p. 38

[5] Nordsieck F., Grundlagen der Organisationslehre, Poeschel 1934

[6] Sopińska A., Process organization of the company, [w:]Romanowska M. (ed.), Trotsky M., Process approach in management, Warsaw School of Economics, Warsaw 2004, Tom 1, p. 52

[7] Davenport T.H., Short J.E., The New Industrial Engineering: Information Technology and Business Process Redesign, Sloan Management Review, Summer 1990

[8] Quality management principles are most popular in ISO 9001:2015. However, it should be noted that the latest edition of the standard does not mention the eighth principle of quality management, i.e. the systemic approach.

[9] Harry M., Schroeder R., Six sigma, use quality program to improve financial performance, Oficyna Economics, Kraków 2001, p. 23-24

[10] Hammer M., Reengineering Work: Don’t automate, Obliterate, Harvard Business Review, July-August 1990, p. 104-112

[11] Hammer M., Champy J., Reengineering in enterprise, Neumann Management Institute, Warsaw 1996, p. 46

[12] Davenport T.H., Short J.E., The New Industrial Engineering: Information Technology and Business Process Redesign, Sloan Management Review, Summer 1990

[13] Jeston J., Nelis J., Business Process Management. Practical Guidelines to Successful Implementations, Butterworth-Heinemann, Oxford 2006, p. 3

[14] Ravesteyn P., Batenburg R., Surveying the critical success factors of BPM – systems implementation, Business Process Management Journal 2010, No. 16 (3), p. 493

[15] Bottom M., The role of the process in the management, studies and work of the College of Management and Finance, School of Economics 2010, No. 97, p. 161-176

[16] Lewkowska A., Process approach in quality management based on ISO 9001:2000, [w:]Grudowski P. (ed.), Quality engineering in production, service and public sector enterprises, Gdańsk University of Technology, Gdańsk 2009, p. 156

[17] Tkaczyk S., Kowalska-Napora E., Quality Management Strategy, Diffin, Warsaw 2012, p. 74

[18] Grajewski P., Process organization. Design and configuration, EuP, Warsaw 2007, p. 59; Latzko W.J., Saunders D.M., Four days with Dr. Deming. Modern Management Theory, WNT, Warsaw 1998, p. 35; Segatto M., Dallavalle de Padua S.I., Martinelli D.P., Business process management: a systemic approach?, Business Process Management Journal 2013, No. 19 (4), p. 701

[19] Miller P., System Quality Management, Difin, Warsaw 2011, p. 21

[20] Szczepańska K., Budgol M., Process Management Basics, Difin, Warsaw 2016, p. 11

[21] Tkaczyk S., Kowalska-Napora E., Quality management strategy..., p. 52

[22] Dumas M., La Rosa M., Mendling J., Reijers H.A., Fundamentals of Business Process Management, Springer-Verlag Berlin Heidelberg 2013, p. 9; Grudowski P., Process approach in quality management systems in small and medium-sized enterprises..., p. 20

[23] Hammer M., Reinżynieria and its aftermath, PWN, Warsaw 1999, p. 190

[24] Brilman J., Modern management methods and concepts, PWN, Warsaw 2002, p. 292

[25] Hammer M., The Process Audit, Harvard Business Review 2007, No. 85 (4), p. 113; Kohlbacher M., Gruenwald S., Process orientation: conceptualization and measurement, Business Process Management Journal 2011, No. 17 (2), p. 271; Kohlbacher M., Gruenwald S., Process ownership, process performance measurement and performance companies,International Journal of Productivity and Performance Management 2011, No. 60 (7), p. 712

[26] Hernaus T., Vuksic V.B., Štemberger M.I., How to go from strategy to results? Institutionalising BPM governance within organisations, Business Process Management Journal 2016, No. 22 (1), p. 173-195

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