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

6.1a_FLO.PNG

6.1 Flow Diagram (Figure 6.1a-1 Operations)

Inputs to 6.1a Product Service and Process Design

  • 3.1-CFT-A3 Voice of Customer Analysis (.xlsx)

 

  • ​3.1-CFT-A4 Voice of Stakeholder Analysis (.xlsx)

  • 5.2a-WFT-A1 Work Unit Performance Analysis (.xlsx) - (Value Stream Map)​

Measurement and Analysis Tools and Techniques

Outputs from 6.1a Product Service and Process Design

  • Milestone 1 - Product, Service, and Process Requirements
    Milestone 2 - Key Work Processes Requirements
    Milestone 3 - Key Work Processes/Departments Integration
    Milestone 4 - Standard Operation Procedures (SOP) Documented
    Milestone 5 - Design or Update Key Processes (Process Charts)
    Milestone 6 -  Update Strategy Plan and Metrics

Implementation Instructions

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:

 

  • 3.1-CFT-A3 Voice of Customer Analysis (.xlsx)

  • 3.1-CFT-A4 Voice of Stakeholder Analysis (.xlsx)

 

OE21 3.1 Voice of Customers and Stakeholders are used as a reference for the additional customer, stakeholder requirements, and observing web-based customer indicators such as social media. As these customer and stakeholder requirements are discovered, the OFT and CFT create new or update existing requirements, using the CFT-3.2 Product/Service Requirements Specification as a guide. The CFT-3.2 Product/Service Requirements Specification template 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 

(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 meet changing requirements quickly).

 

  • PROGRESS: You have reached Milestone 1 (good work). Input the status [20%] on the organization's OE21 Intranet Main page, and this standard's titled.

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 [30%] on the organization's OE21 Intranet Main page along with this standard's title. 

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.

 

  • Step 2 - Create the Value Stream Map - The 5.2a-WFT-A1 Work Unit Performance Analysis (.xlsx) tool contains an example tab for the Value Stream Map. This map is created during the implementation of OE21 Standard 5.2a. It is used as the organization-wide documented flow of processes used by all Work Units. An example Value Stream Map is found in OE21 Standard 5.2a, Figure 5.2a-1. 

  • Step 3 - Collaborate on Work Processes - 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 that 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 work processes changes. These workforce changes might include the hiring of new workers that have the capability to manage the work processes.

Task 6.1a-4 - Integrate Key Processes and Departments 

The Operations Focus Team (OFT) should collaborate with the Workforce Focus Team (WFT) to integrate key processes with Departments. The guidelines for this integration are:

  • Guideline 1– Departments are unique, with names that describe what the department does

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

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

  • Guideline 4 – Processes have one or more steps, each performed by one person or one team

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

  • Guideline 6 - Where appropriate, Department processes are associated with 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)

 

At this point, the organization should have a list of Departments and Key Processes similar to the above example. One or more Work Units should exist within each Department and these are associated with the key processes performed by the Work Unit members (e.g., employees, contractors, volunteers).

  • 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.

Task 6.1a-5 - Document Standard Operating Procedures (S.O.P.) - The Operations Focus Team (OFT) in coordination with the other focus teams and subject matter experts (SME) ensures that all Work Units have valid Standard Operating Procedures (SOP). If none exist, then this OE21 standard is used to create the S.O.P.(s). 

 

The Standard Operating Procedures (SOP) guideline is 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 "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, or important business processes performed by Work Units in the Department.

 

The Operations Focus Team (OFT) is primarily responsible for key process SOPs 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 are implemented as written. 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 [60%] on the organization's OE21 Intranet Main page alongside the title of this standard.

 

Task 6.1a-6 - Design or Update Key Processes - The OE21-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). The sum of Pt, Wt, and NVA equals Cycle Time (Ct). The OFT consults with people in the organization that have expertise with the selected Key Process. The OFT and facilitator guide subject matter experts (SMEs) in creating the process steps, assigning work units who perform the steps, and providing estimates of Pt, Wt, and NVA for each step.

 

  • 6.1a-OFT-A 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)

 

  • 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 6.1a-OFT-A 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

 

GUIDELINES for using the 6.1a-OFT-A Process Designer (.xlsx):

  • Guideline 1 - Each step in the process should be one performed by one resource type or person; not a mix of two or more resource types (e.g., design and support staff are two types and should be assigned to their individual steps)

  • Guideline 2 - Each step should have one result (not two or more)

 

  • Guideline 3 - Estimates of Pt, Wt, and NVA times do NOT have to be exact, however, the total Cycle Time (Ct = Pt + Wt + NVA) should be reasonably close to the actual experience time frame. Adjustments to individual Pt, Wt, and NVA estimates are made until the total Cycle Time (Ct) is close to reality.

 

  • Guideline 4 - Significant key processes are those that consume higher resources (time and dollars). Managers of significant key processes should use the OE21 Process Designer tool to "drill down" to lower-level steps in order to discover opportunities to reduce Cycle time (Ct) and associated costs. 

  • Guideline 5 -The goal is to design key processes for minimum Ct and least cost (i.e. cost of goods sold), without loss of customer satisfaction or the quality of end items created.

Figure 6.1a-4 is an example procurement process that has been input into the Process Designer tool.

Figure 6.1a-4 6.1a-OFT-A 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 [85%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 6.1a-7 - Integrate Assessment Action Plans into Operations Excellence Action Plan - The implementation of the tasks in this OE21 standard may include tasks that should be integrated into the 6.0-OFT-P Operations Excellence Action Plan. The OFT reviews the results of any of the OE21 analysis tools used, and as appropriate, the OFT integrates one or more of the tasks into the Operations Excellence Action Plan. This integration requires additional resources and approval of the added tasks, resources, schedules, and budgets for the plan. 

Task 6.1a-8 - Select 6.1a Product, Service, or Process Design Metrics.

 

NOTICE: If the organization has an existing Performance Measurement System (PMS), then the internal process is followed to select and review 6.1a Key Process-related measures. If the OE21 tools are used, the following guidelines apply.

Guideline 1 - Select Key Results Indicators (KRI). The KRIs are commonly called Key Performance Indicators (KPI). Examples of KRIs for 6.1a Product, Service, and Process Design are as follows:

  • Process Cycle Time vs. Target (for each key process)

 

  • Process Cost vs. Target Budget (for each key process). Note that where possible, Process Cost should be validated using the organization's Financial Reports of cost of goods sold (COGS). 

Guideline 2 - Table 6.1a-1 presents the implementation steps, actions, references, and instructions sources used for 6.1a results.

A_6.1a product servie process Metrics ta

Table 6.1a Implementation of Product, Service and Process Metrics 

Task 6.1a-8 - Review 6.1a Operations Excellence Metrics - Conduct regular (at least monthly) reviews of Standard 6.1a Measures. Reviews for KRIs are critical to show whether overall organization performance is moving toward target levels and key intended outcomes (KIO) for Workforce Excellence.  

 

Correlation: Where possible, the KRD (drivers) are correlated with KRI (indicators) to determine if and how much the KRD Action Plans are helping boost KRI performance. 


At this point, regular performance reviews are conducted and attended by the Operations Focus Team. 

  • Figure 6.1a-3 provides an example KRI for 6.1a Product, Service, and Process Design

  • Figure 6.1a-4 provides an example KRD for 6.1a Product, Service, and Process Design

 

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.

6.1a KPItop.PNG

Figure 6.1a-3 Example KRI or 6.1a Product, Service, and Process Design

6.1a KPI.PNG

Figure 6.1a-4 Example KRD or 6.1a Product, Service, and Process Design