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13 th ICIT. Malaysia 24-26 March, 2008. Performance Measurement. Integration of Information for Process Improvement and Innovation. Palmira López-Fresno President. Quality Service Committee Spanish Association for Quality. correo@palmiralopezfresno.com. I. Introduction.

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performance measurement integration of information for process improvement and innovation

13 th ICIT. Malaysia 24-26 March, 2008

Performance Measurement.Integration of Information for Process Improvement and Innovation

Palmira López-Fresno

President. Quality Service Committee

Spanish Association for Quality

correo@palmiralopezfresno.com

slide2

I. Introduction

Process Management as a mechanism for achieving competitive advantage through performance improvement:

  • As a way to manage the business (holistic perspective).
  • Being able to tie the deployment from the strategic level to the task level with better effectiveness.
slide3

I. Introduction

Each process crosses various inter or intra departmental units.

FUNCTIONS

PROCESSES

The overall process performance depends on the performance of each phase of the process. The concept and role of internal customer is crucial for overall effectiveness.

slide4

II. Process performance monitoring and evaluation

Business Process Management involves the use of a measurement system.

One of the first pre-requisites for quality of information is to incorporate information from all the actors (stakeholders) from a global holistic perspective.

Regarding employees (internal customers), nobody better than the person who perform the tasks knows how the process is performing and which aspects should be improved.

slide5

Budget

Policies

Competency

Cost-effect. analysis

Improvements

Use/knowledge

Communication

Customer Service

II. Process performance monitoring and evaluation

CUSTOMERS

(External perspective)

(Customer based indicators)

ORGANISATION

(Internal perspective)

(Process based indicators)

Measurem.

of orientation

to customers

EXPECTED

QUALITY

OBJECTIVE

QUALITY

Measurem.

of customer

satisfaction

Measurem.

of efficacy

Profitability

Obtained

PERCEIVED

QUALITY

PRODUCED

QUALITY

Measurem.

of impact on

customers

slide6

Budget

Policies

Competency

Cost-effect. analysis

Improvements

Use/knowledge

Communication

Customer Service

II. Process performance monitoring and evaluation

CUSTOMERS

(External perspective)

(Customer based indicators)

ORGANISATION

(Internal perspective)

(Process based indicators)

Measurem.

of orientation

to customers

EXPECTED

QUALITY

OBJECTIVE

QUALITY

Measurem.

of customer

satisfaction

Measurem.

of efficacy

Profitability

Obtained

PERCEIVED

QUALITY

PRODUCED

QUALITY

Measurem.

of impact on

customers

slide7

II. Process performance monitoring and evaluation

This cycle can be applied to external or internal customers and also to other stakeholders.

For each process the organisation will have indicators related to produced quality (efficiency, cost, time, resources, etc.) and information related to perceived quality (quantitative and qualitative).

slide8

II. Process performance monitoring and evaluation

  • Purpose:
  • To know the perception the persons involved in the execution of the processes (internal supply chain) have about their performance level, in order to identify the processes, sub-processes or phases that need to be improved.
  • Also it can contribute to communicate and implement Process Management and to increase commitment and participation.

The focus is on processes, not in departments and on process performance rather than on internal customer satisfaction.

slide9

II. Process performance monitoring and evaluation

  • Purpose:
  • To know the perception the persons involved in the execution of the processes (internal supply chain) have about their performance level, in order to identify the processes, sub-processes or phases that need to be improved.
  • Also it can contribute to communicate and implement Process Management and to increase commitment and participation.

The focus is on processes, not in departments and on process performance rather than on internal customer satisfaction.

slide10

EXPECTED

PERFORMANCE

The incorporation of the internal customer voice to the performance measurement systemA case experience

PERCEIVED

PERFORMANCE

slide11

III. Internal customers perceived quality evaluation

Company: RACC

Set up: In 1897, private capital.

Location: Barcelona - Spain

Activity: Service organisation. The biggest and most important automobile club in Spain, providing medical, mechanical and personal assistance, travels, insurance, etc. to more than one million members.

Employees: 1650

slide12

III. Internal customers perceived quality evaluation

  • Culture:
  • Traditionally strongly customer oriented (efficacy even more important than efficiency). In 2001 a new “business” perspective was introduced. Process focus gained relevance as a mechanism for increasing competitiveness.
  • The new perspective challenged accepted ways of thinking and focusing the activity.
slide13

DISSENY AND METHODOLOGY

PERIODICAL EVALUATION OF PROCESSES

IDENTIFICATION AND QUALIFICATION OF PROCESSES

Inventory

Maps

Flow charts

Internal and external customer voice

Process Management Manual

Indicators system

Results from analysis of indicators

Benchmarking

PROCESS MONITORING

Process Performance Monitoring

Scorecards

III. Internal customers perceived quality evaluation

Continuous improvement

and innovation

Main element for process effectiveness monitoring

slide14

III. Internal customers perceived quality evaluation

The process performance monitoring system was initially mainly integrated by objective indicators (internal perspective). External customer satisfaction was also monthly monitored (data treated separately).

An internal customer perceived process performance was implemented, in order to complement the information the organisation had for decision making.

slide15

III. Internal customers perceived quality evaluation

Objectives:

  • To identify areas/ aspects of poor performance.
  • To identify causes of negative performance results.
  • To anticipate negative performance results.
  • To increase employees awareness with regard to process management and its advantages.

The final aim was to periodically identify the processes, sub-processes or phases that need to be improved.

slide16

III. Internal customers perceived quality evaluation

Methodology:

  • Evaluation performed quarterly, via intranet, by the Corporate Quality Direction. In 2007 data collection was subcontracted.
  • Addressed yearly to all employees. A sample of 25 % each quarter. Anonymous answering.
  • Evaluation of 13 main macro processes.
slide17

III. Internal customers perceived quality evaluation

Methodology:

  • A questionnaire designed for each process. Includes questions related to friendliness/ courtesy, responsiveness, quality of answer/solution, for each phase of the process, specific questions for some products, and a question related to global performance of the process.
slide18

III. Internal customers perceived quality evaluation

Methodology:

  • Numeric scale, with 10 grades, except some questions related to frequency of use. An open question to specify the 3 main improvement aspects in the process according to the perception of the person who evaluates.
  • Each person evaluates the processes in which he/is is mainly involved, from a perspective of internal supplier-customer.
slide19

06

SIG

SIG

SIG

SIG

SIG

SIG

III. Internal customers perceived quality evaluation

Results:

  • By key attributes, at a corporate level (linked to compliance of values):
  • By process (horizontal view):
  • By unit /department (vertical view):
slide20

III. Internal customers perceived quality evaluation

Results:

  • Quantitative
  • Qualitative
  • Priorisation of aspects to be improved for each process, using the Importance-Performance Map, and globally, identifying key processes by linking processes to strategic lines.
slide21

EXCELLENT/

AREA TO BE

MANTEINED

SURPLUS AREA/ IRRELEVANT

+

PERFORMANCE

CARE-FREE AREA/ TO BE REDUCED

TO BE IMPROVED AREA

-

+

IMPORTANCE

-

III. Internal customers perceived quality evaluation

Results:

slide22

III. Internal customers perceived quality evaluation

Distribution of results:

  • Detailed results distributed to top and middle management, and main indicators included in the process performance measurement system.
  • A summary is distributed to all employees, via intranet.
slide23

III. Internal customers perceived quality evaluation

Results:

  • The process performance measurement system was improved, incorporating perceived performance indicators.
slide24

III. Internal customers perceived quality evaluation

Global results obtained from the methodology:

  • Increased employees awareness and motivation with regard to process management. They perceive their opinions are valued.
  • It allows better identification of causes of negative tendencies (ex. Mechanical Assistance) and therefore better identification of improvements and innovation in processes and products.
  • It allows better allocation of resources.
  • It can allow to anticipate negative performance results.
slide25

IV. Conclusions

  • Two perspectives should be taken into account when defining a measurement system: internal or process based indicators (produced quality), and external or customer based indicators (perceived quality). Both perspectives should be integrated to provide information for better decision making.
  • Internal customers provide very useful information on how processes are performing and which areas should be improved or innovated. A methodology to periodically and systematically evaluate process perceived performance should be implemented and results integrated with other internal indicators.
  • Tools to prioritise improvement should be applied.