Unit 2 Understanding The Process: Structure

Statistical Process Control Unit 2
Unit 2 Understanding the Process
Structure
2.1 Introduction
Objectives
2.2 Meaning of Process
2.3 Examples of Processes
2.4 Definition of Process Management
2.5 Customer Satisfaction and Process Management
Information regarding the process
2.6 Process Mapping and Flowcharting
2.7 Process Analysis and Statistical Process Control
Statistical process control
2.8 Summary
2.9 Glossary
2.10 Terminal Questions
2.11 Answers
2.12 Case Study
2.1 Introduction
In the previous unit, you studied about statistical process control and its
importance in detail. In this unit, let us discuss more about processes and
the ways to manage them in order to achieve business objectives.
A process comprises of a series of activities that aim at converting inputs
into a desired output. To achieve the desired output from a process, an
organisation needs to ensure they are effectively managed.
Process management is a systematic approach to plan and monitor the
performance of a process. Basically, it involves an application of various
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tools, techniques, skills, and knowledge to measure and improve the

performance of a process and accommodate the customers’ need in an
efficient manner.
In this unit, you will study the meaning of a process, concept of process
management, information provided by a process and its significance. You
will also study the concepts of process mapping, flowcharts, and process
analysis.
Objectives
After studying this unit, you should be able to:
 define a process
 list a few examples of processes
 discuss the concept of process management
 explain how customer satisfaction is related to process management
 describe information provided by a process
 discuss process management and statistical process control
2.2 Meaning of Process

A process comprises of a set of activities aimed at converting inputs into
output as desired or as per specifications.
Let us now, take a simple example of a process of preparing a resume.
Here, the input comprises of your basic information, such as name, date of
birth, address, educational qualifications etc. and all these are put together
and typed on an MS-Word document file in a computer, to produce a
structured resume in accordance with the job description. This example
brings forth certain characteristics of a process.
The main characteristics of a process are as follows:
1. In every process, the output to be generated is predetermined or

fixed.

2. Every process comprises of a set of activities.
3. Every process converts input into output.

Hence, it is important to design a set of activities, which lead to the desired
output. It is essential to monitor each and every step in a process, to ensure
that the set of activities do not deviate from a predetermined path. If there
are any interruptions, appropriate actions should be taken to rectify these
barriers.
Here are some of the definitions of a ‘process’ given by experts:
According to Thomas H. Davenport, an American academic and author,
“A process is a structured, measured set of activities designed to produce a
specific output for a particular customer or market. It implies a strong
emphasis on how work is done within an organisation, in contrast to a
product focus’s emphasis on what. A process is thus a specific ordering of
work activities across time and space, with a beginning and an end, and
clearly defined inputs and outputs: a structure for action. Taking a process
approach implies adopting the customer’s point of view. Processes are the
structure by which an organisation does what is necessary to produce value
for its customers.”
According to Michael Hammer and James Champy, founders of the
management theory of Business Process Reengineering (BPR),
“A process is a collection of activities that takes one or more kinds of input
and creates an output that is of value to the customer.”
Every business unit or organisation comprises of several processes, and
each of these processes is designed to achieve the overall business
objective. In addition, each of the processes generates the desired outputs.
Figure 2.1 depicts an example of how different processes in an organisation
work in order to achieve business objectives:

Figure 2.1: Working of Processes in an Organisation

In Figure 2.1, it is depicted that the management of the organisation is
responsible to identify the customer’s requirement and satisfy their
requirements by providing a product.
Let us understand the figure, and see how this is achieved by looking at the
following steps:
1. Management conducts market surveys to identify customers’
requirements.
2. After that resources are procured for translating these requirements into
products.
3. Later, the product is launched in the open market.
4. After launching of the product, the management of the organisation
again conducts a market survey to get the feedback of customers on
the product.
5. Based on customer feedback, modification is made to the product.
6. Furthermore, the process of identifying the requirements of the
customers and modifying product is again started and continued after
regular intervals of time period.

In this manner, an organisation is able to improve the quality of a product

and meet the objective of changing tastes and preferences of customers.
Self Assessment Questions:
1. Every process is a collection of _____________.
2. Every business unit or organisation comprises several processes and

each of these processes is designed to achieve the overall business
objective. (True/False)
3. Select the incorrect statement from the following:
a. A process comprises of a series of activities that aim at converting

inputs into a desired output.
b. In a process the output is not predetermined or fixed.
c. Process management is a systematic approach to plan and monitor

the performance of a process.
d. It is essential to monitor each and every step in a process, to

ensure that the set of activities do not deviate from a
predetermined path.
Activity 1:
Research and determine the packaging process of a soap manufacturing
organisation.
2.3 Examples of Processes

Let us now look at some of the examples of processes.
Example 1:
In a software industry, there is a process of testing software. Software
testing is done at various stages or phases. The software testing process
would usually consist of the following steps:
1. Identifying aspects of the newly developed software that need to be
tested.

2. Determining the criteria for testing the different aspects of the software.
3. Preparing a plan for testing the software so that all the activities
involved in the testing process can be performed effectively.
4. Deciding the testing methods that need to be used.
5. Executing the testing of different aspects of software.
6. Preparing a report based on the results of testing. In this report, it is
mentioned that whether software is ready to be released or not. The
report also contains information related to the errors (if any) determined
during the execution stage of software testing.
In case any error/defect is determined in the testing process of the software,
the software is sent back to the development team for rectification. Further,
the software comes to the testing team for ensuring that the software is
ready for release. Here, you should note that the testing team will send the
software back to the development team until all the defects in the software
are rectified.
Figure 2.2 shows the summarised diagrammatic representation of the steps
involved in the process of software testing:
Identifying the
aspects of newly Determining the
Preparing a testing
developed software criteria for software
plan for the software
that needs to be testing
tested
Preparing report on
software testing Deciding the
Executing the
that mentions the software testing
software testing
software errors (if methods
any)
Figure 2.2: Software Testing Process

Example 2:
Let us now take an example of a travel requisition process in the
manufacturing industry. This process involves arranging transportation for
employees to commute to their offices.

The travel requisition process would consist of the following steps:

1. Filled-in details by employees on the travel requisition form.
2. The form is deposited in the administration or the human resource
department.
3. The form is further sent to the concerned authority to get it sanctioned.
4. The concerned authority verifies the details of the form.
5. After verification, the authority sanctions the vehicle.
This completes the process or in other words, the travel requisition process
has produced the output that is the sanctioning of the vehicle for official
purpose.
Figure 2.3 shows the diagrammatic representation of the steps involved in a
travel requisition process:
Filled-in details by employees on the travel requisition form
The form is deposited to administration or human resource

department
The form is further sent to the concerned authority to get it sanctioned
The concerned authority verifies the details of the form
After verification, the authority sanctions the vehicle
Figure 2.3: Travel Requisition Process in Manufacturing Industry

2.4 Definition of Process Management

All the processes in an organisation play a significant role in achieving
organisational goals and objectives. Therefore, it is of utmost importance for
any organisation to manage all its processes within the stipulated time.
In this section, let us discuss some more about process management.
Process management can be defined as a tool for managing the different

activities of a process in order to achieve the business objectives. These
activities include, designing the process, measuring the process, monitoring
the process, and taking corrective actions when the results are not in
accordance with the desired output.
The different stages involved in a business process management are as

follows:
1. Model: A new model is designed to increase the efficiency of a

business process.
2. Workflow automation: At this stage the designed model is

implemented in the organisation in order to automate the workflow.
3. Monitor: The working of the implemented model is observed and

recorded.
4. Analyse: In this stage the recorded data is assessed to determine

whether the model is providing the desired results or not.
5. Improve: The model is further improved on the basis of results

obtained during the analysis stage.
Figure 2.4 shows the business process management stages:

Figure 2.4: Business Process Management

The main aim of process management is to improve processes on a
continuous basis. Thus, process management is a proactive task and needs
continuous monitoring. It involves identifying the processes that are not
adding value, correcting them if possible, or discarding them. Some of the
characteristics of process management are:
4. It is a continuous activity.
5. It requires constant monitoring of a process.
6. It requires continuous analysis of a process.
7. It requires continuous improvement of a process.
Process management provides several advantages to an organisation.

Some of these advantages are:
8. Improving the quality of a product or services.
9. Increasing the level of customer satisfaction.
10. Facilitating the continuous improvement of processes.
11. Decreasing the time and cost involved in completing a process.

4. ____________ involves identifying the processes that are not adding

value, correcting them if possible, or discarding them.
5. Process needs to be continuously improved. (True/False)
Activity 2:
Identify the process of sanctioning loans in a bank.
2.5 Customer Satisfaction and Process Management

In contemporary business scenario, customer satisfaction is an important
aspect of organisation to remain competitive in the market. As customers
are not only important from the sales and revenue perspective, but they are
a great source of indirect marketing and goodwill. In order to achieve the
desired level of customer satisfaction index, an organisation has to manage
its processes efficiently. Let us take an example to understand this
relationship.
Domino’s, a popular pizza chain, has a tagline, in which it commits to deliver
pizzas within 30 minutes or else they are free of cost. In order to deliver the
pizzas in 30 minutes the organisation has to effectively manage all its
processes (dressing, baking, and delivery of pizza). The result is a satisfied
customer, lots of goodwill, and higher revenues for Domino’s.

Now let us further understand how Domino’s is able to achieve such a feat
through process management.
Some of the important aspects of process management of Domino’s that
enables the organisation to deliver the pizza within 30 minutes to its
customer are:
 The organisation takes orders only from customers within the range of 4-
5 kilometers, based on road and traffic conditions.
 It conducts regular surveys on traffic conditions in different areas to be

aware of the current situation.
 It has separate workforce for delivering pizza.
In this way, the organisation is able to achieve the objective of delivering

pizza within 30 minutes, which satisfy the customers and increase its sales
and profits.
2.5.1 Information regarding the process

A process provides different kinds of information, some are listed as follows:
1. An overall view of activities responsible for converting inputs into

output.
2. The functioning of each activity.
3. How the activities are interlinked with other dependent units.
4. The time factor involved in process execution.
5. What measures can be adopted to increase the efficiency of the

process.
Let us re-consider the Domino’s example mentioned above. The

organisation is able to deliver pizzas within 30 minutes by collecting and
executing information about several inter-related processes. The information
obtained through different activities of pizza delivery of Dominos is as
follows:
 Time required for delivering pizza within a specified distance.

 Particular number of individuals required for meeting the goal of pizza

delivery in 30 minutes.
6. An organisation needs to manage its processes efficiently in order to

satisfy its customers. (True/False)
7. Processes provide an overall view of the activities in the
organisation. (True/False)
8. Processes depict the _________ that can be adopted so as to

increase their efficiency.
9. Processes depict how different activities are interlinked with other

dependent units. (True/False)
2.6 Process Mapping and Flowcharting

Process mapping represents the steps involved in explaining what a
business process actually accomplishes, who is liable, and how can the
success of a process be measured. It shows the flow of different processes
in an organisation. In other words, it depicts how any task is carried out in
an organisation.
There can be different types of process maps such as:
Relational maps
Relational maps are designed to show an overall view of an organisation.
They show various departments in a business unit and how these
departments communicate with different stakeholders of the unit.
Figure 2.5 shows an example of a relational map, where different
departments, sub groups are communicating with suppliers and customers:

Figure 2.5: An Example of Relational Map
Cross-functional maps
Cross-functional maps are designed to depict various functions of an
organisation and how they interact with one another. Figure 2.6 shows an
example of cross-functional map depicting how different functions of an
organisation like sales, purchasing interact with and work together to
achieve the objective of customer satisfaction.
Figure 2.6: An Example of Cross-Functional Map

Process flowcharts or diagrams

Process flowcharts are designed to depict the workflow of a single process.
Figure 2.7 shows an example of process flowchart, depicting the different
steps involved in order processing process of an organisation:
Figure 2.7: Process Flowchart

Some benefits of using flowcharts are mentioned as follows:
 promoting clear understanding of the process
 identifying bottlenecks

 help to identify non-value-adding operations
 identifying problem areas
 facilitate effective communication
 identifying opportunities for improvement

10. Relational maps are designed to show an overall view of an
organisation. (True/False)
11. Flow chart depicts the inter-relationship between various functions.
(True/False)
Activity 3:
Determine the process of handling the customer complaints of a mobile
service provider and represent the process using a flowchart.
2.7 Process Analysis and Statistical Process Control

Process analysis can be defined as a step-by-step evaluation of each stage
of a process, to understand the behaviour and direction of the process. In
addition, process analysis helps to identify any anomalies in the process
and the potential steps that can be taken to improve or change the process.
In analysing a customer satisfaction process, an organisation may dwell

upon the most satisfying stage or most dissatisfying stage for a customer
etc. To do so, all the necessary steps be taken to analyse a process are
represented on a chart called, ‘the process analysis chart.’
Figure 2.8 shows an example of process analysis chart, depicting the

various stages of analysis in a process.

Figure 2.8: An Example of Process Analysis Chart

The objectives of process analysis are mentioned as follows:
1. Assess the effectiveness of a process
2. Identify and segregate the constraints in a process
3. Monitor the allocation of resources throughout the process
4. Determine the time involved in completing a process
5. Identify the best method for performing a process
2.7.1 Statistical process control

Efficient management of processes helps an organisation in reducing waste,
human error, and miscommunication. Process management ensures
optimum utilization of resources, which help in making an organisation
efficient, effective, and capable of adapting to changing business
environment.
In order to manage processes effectively, an organisation uses various
statistical tools and techniques. The application of these statistical tools to
oversee and regulate a process is called statistical process control.

The tools and techniques used in a statistical process control are:

 Control Chart
 Run Chart
 Pareto Chart
 Histogram
 Ishikawa Diagram or the Fish Bone Diagram
 Tree Diagram
 Affinity Diagram
 Matrix Diagram
 Relationship Diagram
A detailed explanation of all these tools has been provided in the

subsequent units.
12. __________ is a step-by-step analysis of each stage of the process to

understand the behaviour and direction of the process.
13. An efficient management of process helps in reducing waste, human

error, and miscommunication. (True/False)
14. In order to manage processes effectively, an organisation uses

various statistical tools and techniques (which is called statistical
process control). (True/False)
2.8 Summary
Let us recapitulate the main points discussed in the unit:
 A process is a set of activities responsible for converting inputs into
output as desired or as per specifications.
 Process management is a tool for managing the different activities of a

process in order to achieve the business objectives.

 Different stages of process management are monitor, analyse, improve,

model, and workflow.
 Process management provides advantages such as improving the

overall quality of a product and services, increasing level of customer
satisfaction, facilitating continuous improvement, and decreasing the
time and cost.
 A process provides different kinds of information such as an overall view

of all activities, the functioning of each activity, interlink of activities with
other dependent units, factors involved in process execution, and
measures to be adopted for increasing process efficiency.
 Process mapping shows the flow of different processes in an

organisation. Different types of process maps are relational maps, cross-
functional maps, and process flowcharts.
 Process analysis is a step-by-step evaluation of each stage of a

process, to understand the behaviour and direction of the process.
2.9 Glossary
Let us have an overview of the important terms mentioned in the unit:
Process: A set of activities performed in order to convert inputs into output

as per specifications.
Process Mapping: A map that depicts the flow of different processes in an

organisation.
Defect: Any output that does not meet the specifications.
Relation Maps: The maps designed to show an overall view of an

organisation.
Cross-Functional Maps: The maps designed to depict various functions of

an organisation and their interaction with one another.

2.10 Terminal Questions

1. Define a process. List some examples of processes.
2. Write a short note process management.
3. Discuss the information regarding the process.
4. Explain process mapping.
5. Write a short note on process flowcharts.
2.11 Answers
Self Assessment Questions

1. activities
2. True
3. (b) In a process the output is not predetermined or fixed
4. Process management
5. True
6. True
7. True
8. Measures
9. True
10. True
11. False
12. Process analysis
13. True
14. True

Terminal Questions
1. A process is a set of activities aimed at converting inputs into a desired
output. Refer Sections 2.2 and 2.3 for more details.
2. Process management is a tool for managing different activities of a

process in order to achieve the business objectives. Refer Sections 2.4
and 2.5 for more details.
3. A process provides different types of information such as an overall

view of all activities, the functioning of each activity, etc. Refer Section
2.5.1 Information Regarding the Process, which discusses the
information regarding the process.
4. Process mapping shows the flow of different processes in an

organisation. Refer Section 2.6 Process Mapping and Flowcharting,
which explains process mapping.
5. Process flowcharts are designed to depict the workflow of a single

process. Refer Section 2.6 Process Mapping and Flowcharting,
which discusses process flowcharts.
2.12 Case Study

Customer Satisfaction at FairFeal Motors
FairFeal Motors is an automobile dealer that has agencies of a large

number of four-wheeler vehicles for A-Class, B-Class and C-Class cars. The
dealer has a large number of authorised centres at several places. The
authorised centres not only sell cars, but also provide value-added services,
such as car washing, car servicing, and insurance.
Though FairFeal has been doing reasonably well, it has been facing various
problems, such as:
 Stiff competition and availability of better services at lower prices

compared to its competitor
 Increase in customers’ complaints

Low morale of staff members
High turnaround time for car servicing.
FairFeal’s management is unable to identify the exact cause of such

problems and ways to tackle them. Finally, the organisation decided to hire
a process consultant.
The consultant identified the following causes for the above problems:
 Higher pricing of services
 No uniqueness in services
 Unorganised processes
 Lack of rewards and recognitions
 Job dissatisfaction among employees
After identifying the causes, FairFeal started working on the idea of

resolving the issues. FairFeal’s management formed a quality control team,
to look into all the processes with a microscopic view. The quality control
team, with the help of statistical tools, charts, graphs identified the
deviations and variations in the processes. After detecting the variation in
the processes, the quality control team, implemented the necessary
measures, minimised the variation, reduced the waste, and restructured the
processes.
After a few months, FairFeal was able to streamline its processes, which
resulted in higher productivity, more revenue, and better emoluments for
employees. This led to higher morale in employee and a better customer
satisfaction index.
Questions:
1. Why did FairFeal hire a process consultant?
2. Define customer satisfaction in relation to the given case study.

References
 Montgomery, D. C. (2002), Introduction to Statistical Quality Control.
Daryaganj, New Delhi: Wiley India (P.) Ltd.
 Flood, R. B. (1993), Beyond TQM. West Sussex, England: John Wiley &
Sons Ltd.
E-References
 Management as a Process. Retrieved from
http://www.managementstudyguide.com/management_process.htm
 Five Step Customer Satisfaction Process. Retrieved from

http://www.ampolbiz.com/consulting/resources/cust-sat/cust-sat.pdf
 Process Mapping. Retrieved from

http://www.fpm.iastate.edu/worldclass/process_mapping.asp

Unit 2 Understanding The Process: Structure

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Statistical Process Control Unit 2

Unit 2 Understanding the Process

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tools, techniques, skills, and knowledge to measure and improve the

 list a few examples of processes

 discuss the concept of process management

 explain how customer satisfaction is related to process management

 describe information provided by a process

 discuss process management and statistical process control

2.2 Meaning of Process

1. In every process, the output to be generated is predetermined or

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2. Every process comprises of a set of activities.

3. Every process converts input into output.

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Figure 2.1: Working of Processes in an Organisation

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In this manner, an organisation is able to improve the quality of a product

Self Assessment Questions:

1. Every process is a collection of _____________.

2. Every business unit or organisation comprises several processes and

3. Select the incorrect statement from the following:

a. A process comprises of a series of activities that aim at converting

b. In a process the output is not predetermined or fixed.

c. Process management is a systematic approach to plan and monitor

d. It is essential to monitor each and every step in a process, to

2.3 Examples of Processes

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Figure 2.2: Software Testing Process

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The travel requisition process would consist of the following steps:

Filled-in details by employees on the travel requisition form

The form is deposited to administration or human resource

The form is further sent to the concerned authority to get it sanctioned

The concerned authority verifies the details of the form

After verification, the authority sanctions the vehicle

Figure 2.3: Travel Requisition Process in Manufacturing Industry

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2.4 Definition of Process Management

In this section, let us discuss some more about process management.

Process management can be defined as a tool for managing the different

The different stages involved in a business process management are as

1. Model: A new model is designed to increase the efficiency of a

2. Workflow automation: At this stage the designed model is

3. Monitor: The working of the implemented model is observed and

4. Analyse: In this stage the recorded data is assessed to determine

5. Improve: The model is further improved on the basis of results

Figure 2.4 shows the business process management stages:

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Figure 2.4: Business Process Management

5. It requires constant monitoring of a process.

6. It requires continuous analysis of a process.

7. It requires continuous improvement of a process.

Process management provides several advantages to an organisation.

8. Improving the quality of a product or services.

9. Increasing the level of customer satisfaction.

10. Facilitating the continuous improvement of processes.

11. Decreasing the time and cost involved in completing a process.

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Self Assessment Questions:

4. ____________ involves identifying the processes that are not adding

5. Process needs to be continuously improved. (True/False)

2.5 Customer Satisfaction and Process Management