OE21 Guideline: 6.1a

Product, Service and Process Design

Design products, services and work processes to meet customer needs 

Strategic Objective:

Strategic Objective:

Ensure design of products, services and work processes meet requirements

Quality Objective:

Approved by: (Name) Chair, Leadership Focus Team (LFT)

Approved: DD-MMM-YY

Quality Objective:

Responsibility:

Lead: Operations Focus Team (OFT)  Support: Customer Focus Team (CFT)

VALUE ADDED         

Implementation of this standard helps the organization design and improve key processes and process performance. During implementation, the OFT discovers the following value-added information:

 

1. Requirements - Determination of key product, service and process requirements.

 

2. Key Work Processes - Documentation of key work processes and their requirements.

 

3. Design Concepts -  Design to requirements processes, with the incorporation of new technology, organizational knowledge to design for product and service excellence, customer value, and consideration of risk and agility.

POLICY          6.0 COMMENTARY

The organization has adopted the Baldrige Framework Item 6.1a Product and Process Requirements and 7.1a Customer-Focused Product and Service Results as the internal policy, including the following sub-items:

 

6.1a (1) Product, Service, and Process Design - The organization determines key product, service, and work process requirements.

 

6.1a (2) Key Work Processes - The organization defines key requirements for work processes.

 

6.1a (3) Design Concepts - The organization incorporates new technology, organizational knowledge to design for product and service excellence, customer value, and consideration of risk and agility.

 

7.1a Customer-Focused Product and Service Results - The organization measures, tracks and improves trends in key measures and indicators (results) of the performance of products and services that are important to and directly serve customers. Results are compared with competitors and other organizations with similar offerings, customer groups, and market segments.

 

PROCESS

6.1 Flow Diagram (Figure 6.1a-1 Operations)

6.1a Process Chart (Figure 6.1a-2 Product and Process Design)

Inputs to 6.1a Product Service and Process Design

 

 

 

  • Lists of organization departments and work units (sub-departments)

 

  • Lists of current Standard Operation Procedures (S.O.P.) if available

Measurement and Analysis Tools and Techniques

Outputs from 6.1a Product Service and Process Design

  • Product, Service, and Process Requirements (documented)

 

  • Key Work Processes (identified)

  • Work Process Designs (process charts and designs implemented)

  • Departments and Processes (integrated)

 

  • Standard Operating Procedures (S.O.P.s) documented

Case Study

  • Read the 6.1a Case Study

​​

Implementation Instructions

Key Decision: The OE21 focus team responsible for this standard should begin by deciding whether or not the OE21 standard adds value (on is non-value added) when compared to any existing standard, SOP, or process the organization uses now. The decision process is:

 

1. The focus team studies all Tasks and tools used in the OE21 standard.

2. The focus team answers the questions:

  • NON-VALUE ADDED? Does the organization currently use a standard, SOP process that is deemed as better or essentially as good as the OE21 standard? If YES, then the focus team should document that this standard is deemed as NVA, and then the focus team should proceed ahead to the next OE21 standard.

  • VALUE-ADDED? Does the organization currently use a standard, SOP process that is deemed as better or essentially as good as the OE21 standard? If NO, then the focus team should proceed ahead to complete the following OE21 Implementation instructions.

 

Note: The NVA finding will be used later in the OE21 Certification Audit process.

START IMPLEMENTATION

Task 6.1a-1 Determine or Update Product, Service, and Process Requirements - The Operations Focus Team (OFT) works in collaboration with the Customer Focus Team (CFT) to determine or update (revise) product, service and process requirements based on customer and prospective customer needs, expectations and market factors, competitors, or similar organization offerings. The following key customer and prospect assessments and internal specifications and offering descriptions are used in the determination and updates of product, service and process requirements:

 

  • CFT 3.1 Voice of Customer Assessment (survey)

  • CFT-3.1 Voice of Prospect Assessment (survey)

 

OE21 3.1 Voice of Customer is used as a reference for the additional customer and prospect requirements. See Task 3.1.9 Listening to Web-based Customer Indicators (including social media). As these customer requirements are discovered, the OFT and CFT create new or update existing requirements, using the CFT-11C Product/Service Requirements Specification as a guide. The CFT-11C Specification addresses these items:

 

(a) Type of products, services or programs required

(b) Requirements or specifications needed for products, services or programs

(c) Typical order quantities or frequency of delivery expected

(d) The customer desired order-to-delivery cycle time

(e) Customer desired costs

(f) Competitor/comparative organization costs for similar products or services

(g) Quality requirements for products, services or programs

(h) Organizational Profile Part 1 of 2 (from Topic 1.1)

(i) Strategic Action Plans (from Strategic Plan)

(j) Results of Voice of Customer, Voice of Prospect and Customer Satisfaction Assessments

(k) Value Ratings (1-5) for products, services or programs

 

These design inputs and specifications are used to help incorporate new technology, organizational knowledge, product/service/program excellence, customer value, and agility (flexibility to quickly meet changing requirements).

 

  • PROGRESS: You have reached Milestone 1 (good work). Input the status [21%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 6.1a-2 Determine or Update Key Work Processes Requirements - The Operations Focus Team (OFT) with support from the other focus teams and OE21 Facilitator, use product, service and process requirements discovered from the implementation of Task 6.1a-1 and including internal key personnel's experience and suggestions. Work process types and designs vary depending on these factors:

 

  • Nature of product or service offerings (new, or variants of existing offerings)

  • Current or new work process requirements based on Strategy Development and Deployment

  • Current or new worker capability, capacity or core competency requirements

  • Need for re-engineering of existing offerings or processes

  • Manufacturability, delivery, and servicing 

  • Special safety requirements

  • Special requirements for reliability, availability, and maintainability

  • Environmental, legal and regulatory requirements

  • Special measurement and process capability

  • Special needs for suppliers or supply-chains

  • Other unique or unique customer or market requirements 

 

The OFT uses each of the items on the list, as appropriate, in determining the list of key work processes needed as well as the requirements of these processes.

 

  • PROGRESS: You have reached Milestone 2 (good work). Input the status [32%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 6.1a-3 Implement Work Process Design or Revisions - The Operations Focus Team (OFT) leads the other teams in implementing key (significant) work process design. The OFT performs the following work process design steps to implement new or changing work process designs.

 

Step 1Integration of Departments and Processes -  Department or work processes are important internal value-creation processes. They might include product or service design and delivery, customer support, and business processes. Key processes require the main outputs of the workforce and produce customer, stakeholder, and stockholder value. Each department or work unit maintains a complete list of its key processes. Key processes are associated with the products, services or programs they support. A best practice is to begin titles of key processes with a "verb", e.g. Perform Payroll.

 

The Operations Focus Team (OFT) collaborates with the other focus teams to associate the list of key work processes with the departments or work units who will execute these work processes. The Workforce Focus Team (WFT) and Human Resources Manager are responsible for incorporating any changes to departments or work units needed to accommodate changes to key work processes. These workforce changes might include the hiring of new workers that have the capability to manage the work processes.

 

Figure 6.1a-3 provides an example of the integration of key processes and departments; to be replaced by actual processes and departments.

  • NOTICE - This example should be replaced by the organization's list of key processes and Departments, and where appropriate, Work Units are integrated below Departments, and processes are associated under the Work Unit(s) that perform them.

 

INTEGRATION OF KEY PROCESSES AND DEPARTMENTS

 

Note 1– Departments are unique; have names that describe what the department does

Note 2 - Work Units are sub-departments, as needed for larger departments

Note 3 - Process titles begin with a “verb” – such as “Implement, prepare, create, or hire.

Note 4 – Processes have one or more steps, each performed by one person or a team

Note 5 – All company processes are listed under the Department that performs them

Note 6 - Where appropriate, fundamental processes are associated with their Work Units

 

EXAMPLE: TRUCKING BUSINESS (about 100 people; 5 departments; 25 processes)

 

DEPARTMENT - Strategy and Risk Management

o Perform Strategy Planning and Action Plan procedures

 

DEPARTMENT - Financial Management

o Perform Financial Management and Tax Reporting procedures

o Perform Payroll procedures

o Perform Accounts Receivable procedures

o Perform Accounts Payable procedures

o Perform Department budgeting procedures

 

DEPARTMENT - Sales/Marketing

o Prepare company product/service/program descriptions and/or brochures or catalogs

o Prepare product/service/program sales materials

o Create a company web site

o Perform customer Marketing and Sales procedures

o Perform customer Support and Relationship procedures

 

DEPARTMENT - Operations Management

o Purchase Trucks

o Prepare Trucks for Hauling

o Maintain Trucks and Equipment

o Hire Qualified Drivers

o Train Drivers in Safety

o Train Drivers in Loading and Hauling

o Hire Site Cleanup and Restoration People

o Train Site Cleanup and Restoration People

o Perform Project Management on large procurements

o Perform Quality and Risk Management 

 

DEPARTMENT - Human Resources

o Recruiting

o Hiring 

o HR Management (legal, regulatory, internal HR)

o Training and Education (outside)

 

Figure 6.1a-3 Integration of Key Processes and Departments (example)

  • PROGRESS: You have reached Milestone 3 (good work). Input the status [40%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Step 2 - Document Standard Operating Procedures (S.O.P.) - The Operations Focus Team (OFT) in coordination with the other focus teams and subject matter experts (SME) creates or verifies that all key documents have supporting Standard Operating Procedures (SOP).

 

A guideline for a significant (key) Standard Operating Procedure (SOP) is provided as follows:

 

SOP Header:

  • Title and Description of the procedure,

  • SOP identification number,

  • Date of issue or revision,

  • Name of the organization (or department) the SOP applies to, and

  • Signatures of those who prepared and approved of the SOP

 

SOP Table of Contents:

  • Quality Assurance/Quality Control - how the SOP is checked or verified

  • Training or Certification Requirements - what training courses or certificates of training, education or achievement are required

  • References - Cited or significant references

  • Scope and applicability - Purpose of the process, its limits, and how it's used, including standards, regulatory requirements, roles and responsibilities, and inputs and outputs

  • Procedures with steps. List all the steps with necessary details, including what equipment needed. Cover sequential procedures and decision factors. Address the "what ifs" and the possible interferences or safety considerations.

  • Clarification of terminology. Identify acronyms, abbreviations, and all phrases that aren't in common parlance.

  • Health and safety warnings. To be listed in its section and alongside the steps where it is an issue. Do not gloss over this section.

  • Equipment and supplies. A list of what is needed, when needed, where to find it and standards that apply. 

  • Cautions, exceptions, and interferences. A troubleshooting section. Covers what could go wrong, what to look out for, and what may interfere with the final, ideal product.

 

A guideline for a "simple" SOP should include as a minimum:

 

SOP Header and Contents

  • Title and Description of the procedure,

  • SOP identification number,

  • Date of issue or revision,

  • Name of the organization (or department) the SOP applies to, and

  • Signatures of those who prepared and approved of the SOP

  • Procedures with steps, including who completes each step, and any special notes that should be included with process steps.

 

NOTICE: Each Department Manager is responsible for creating and maintaining an SOP for each significant process (essential design, production/creation, delivery, support and important businesses processes. The Operations Focus Team (OFT) is primarily responsible for key process SOPs that are necessary for design, production/creation, delivery, and support of products, services or programs. The OFT also audits (at least annually) the critical business process SOPs to ensure that they are accurate, complete and followed. The OFT ensures that out-of-date or unused SOPs are updated and integrated into the daily process management activities.

  • PROGRESS: You have reached Milestone 4 (good work). Input the status [72%] on the organization's OE21 Intranet Main page alongside the title of this standard.

 

Step 3 - Design or Update Key Processes using the OE21 Process Designer - The OE21-Process Designer (named OFT_6.1a_Process_Designer) is a spreadsheet model used to create process charts with steps, actions, performers, process time (Pt), wait time (Wt), non-value added time(NVA) and process cycle time. The OFT consults with people in the organization that have expertise with the selected Key Process. The OFT and facilitator will guide these subject matter experts (SMEs) in creating the process steps, work units who perform the steps, and estimates of process time (Pt), wait time (Wt) and non-value added time (NVA) for each step.

 

  • OFT_6.1a_Process_Designer (.xlsx) 

 

The following data and information are input into the OFT 6.1a Process Designer:

 

  • Process Step number and action (e.g., input, review, decision)

  • Process Steps description

  • Process Lead and Support (people, teams or work units are typical)

  • Process Time (Pt), Wait Time (Wt) and Nov-value added Time (NVA)

 

The formula for cycle time is: Ct = Pt + Wt + NVA.

 

  • OE21-Process Designer spreadsheet “templates” are provided for design, production, delivery, support, supply chain, and administration (business) processes.

 

  • OE21-Process Designer spreadsheet templates are used for estimating process cycle time and cost regarding total hours and dollars (cost estimate) for the process.

 

The following are definitions used in the OFT 6.1a Process Designer (.xlsx)

 

  • Process time (Pt) - the average time to do the step, in days, hours and fractions (of hours)

 

  • Wait Time (Wt) - the average time waiting after the step until starting the next step in the process, in days, hours and fractions

 

  • Non-Value Added time (NVA) - the time wasted doing non-value added steps, defects, rework or resolving other quality issues, in days, hours and fractions.

 

  • Cycle time (Ct) = Pt + Wt + NVA - in days, hours and fractions

 

Process data and information that are input into the OFT 6.1a Process Designer, follow these guidelines:

 

  • Each step in the process should be one performed by one resource type or person; not a mix of two or more resource types (design and support staff are two types)

 

  • Each step should have one result (not two or more)

 

  • Estimates of process time (Pt), wait time (Wt) and NVA time do NOT have to be exact. However, the total Cycle Time (Ct = Pt + Wt + NVA) should be reasonably close to what the experience is (time to complete the entire process). 

 

Figure 6.1a-4 is an example procurement process that has been input into this file:

 

  • OFT_6.1a_Process_Designer (.xlsx)

Figure 6.1a-4 OFT 6.1a Process Designer (Example: Procurement Process)

 

In this example, the estimated Cycle Time is 1.5 Days and the estimated Process Cost is $453.75.

 

DISCLAIMER: All Pt, Wt, NVA times as well as labor hours or non-labor dollars per process step, are user-estimated and may only be approximations of the actual process times. The formulas summarize user-estimated times into estimated Ct and process cost. The Process Chart estimates should be adjusted as actual process times and costs are experienced. 

  • PROGRESS: You have reached Milestone 5 (good work). Input the status [94%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 6.1a-4 Inputs tasks into the Operations Excellence Action Plan - The Operations Excellence Action Plan includes tasks aimed at improving a customer-focused product, service and program results. The Operations Focus Team (OFT) adds tasks, responsibilities and other information necessary to implement new initiatives as a result of this Product and process design Standard.

 

  • OFT_6.1a_Operations_Excellence_Action_Plan (.xlsx)

 

Task 6.1a-5 Input Product and Process Design Metrics into PMS - Unless the organization has a Performance Management System; the OFT uses the following file:

 

  • OFT_7.1_PMS_Operations_Excellence_Metrics (.xlsx)

 

As a minimum, the OFT selects, input and tracks critical measures for Process Management, including:

 

  • Processes Charted % - The % of key processes are charted vs. target of 100%

  • Process Cycle Time - The % of key processes meeting their Cycle time (Ct) targets

  • Process Cost - The % of key processes meeting their process cost ($) targets

 

Task 6.1a-6 Review Product, Service, and Process Design Results - ​On a quarterly basis, the OFT with support from all focus teams uses the Performance Measurement System to monitor trends of process management initiatives versus goals. Usually, these are updated quarterly, or when changes in conditions require updates. The OFT appropriate action to drive measures towards their goals. When goals are met, the OFT may raise the goals higher, as appropriate. See OE21 4.1 Task 4.1.5 for guidance.

Figure 6.1a-5 is an example Trend Chart and Action Plan for the % of Key Processes Charted.

  • PROGRESS: You have reached Milestone 6 (congratulations). Input the status [100%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Figure 6.1a-5 Example Trend Chart for Standard 6.1 Results