6 Process design

INTRODUCTION
Key questions
In Chapter 1 we described how all operations consist of a
❯ What is process design? collection of processes (though these processes may be called
❯ What should be the objectives of ‘units’ or ‘departments’) that interconnect with each other
process design? to form an internal network. Each process acts as a smaller
version of the whole operation of which they form a part, and
❯ How do volume and variety transformed resources flow between them. We also defined
affect process design?
a process as ‘an arrangement of resources and activities
❯ How are processes designed in that transform inputs into outputs that satisfy (internal or
detail? external) customer needs’. They are the ‘building blocks’ of
all operations, and as such they play a vital role in how well
operations operate. This is why process design is so important.
Unless its individual processes are well designed, an operation
as a whole will not perform as well as it could. And operations
managers are at the forefront of how processes are designed.
In fact all operations managers are designers. When they
purchase or rearrange the position of a piece of equipment,
or when they change the way of working within a process,
it is a design decision because it affects the physical shape
and nature of their processes, as well as its performance. This
chapter examines the design of processes. Figure 6.1 shows
where this topic fits within the overall model of operations
management.

Topic covered in Direct

this chapter

Operations Develop
Design Design
management

Process Layout
design and flow Deliver

Process People in
technology operations

Figure 6.1 This chapter examines process design

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 called the ‘Shouldice method’, that all its surgeons fol- can operate in a routine and regular manner. This means
low strictly. Pre-surgery, Shouldice sends surveys to its that it can keep nearly all its beds full without creating
patients asking for information that helps ensure that the customer waits. The procedure most commonly used
patients are good candidates for the treatment Shouldice at Shouldice involves sewing muscle layers together in
offers (this further helps reduce variability in process an overlapping manner, a technique that is said to be
time). Shouldice requires patients to be at an accept- particularly reliable. After discharge, Shouldice sends out
able weight appropriate to their height. Prospective an email newsletter to all of its patients that includes a
patients who are overweight must lose weight. Patients questionnaire for Shouldice's post-operative follow-up
enter the hospital the day before surgery and are given programme, which shows that fewer than 1 per cent of
a briefing about the procedures to be followed the next patients have a recurrence after hernia repair. The ques-
day. The night before the operation is also intended as tionnaire also helps the hospital to refine the knowledge
an opportunity for patients to come to know each other that keeps its procedures reliable. So, by reducing the
– Shouldice encourages patients to work together to variability in its operations (‘operations’ in both senses
promote recovery. The hospital schedules the surgeries of the word) the hospital has designed a set of processes
in such a way that variability in the arrivals of custom- that can both be highly utilized and reduce customer
ers is virtually non-existent. This means that Shouldice waiting time.

SUMMARY ANSWERS TO KEY QUESTIONS

❯ What is process design?

● Design is the activity which shapes the physical form and purpose of both products and
services and the processes that produce them.
● The design activity is more likely to be successful if the complementary activities of product
or service design and process design are coordinated.

❯ What should be the objectives of process design?

● The overall purpose of process design is to meet the needs of customers through achieving
appropriate levels of quality, speed, dependability, flexibility and cost.
● The design activity must also take account of environmental issues. These include exam-
ination of the source and suitability of materials, the sources and quantities of energy
consumed, the amount and type of waste material, the life of the product itself, and the
end-of-life state of the product.

❯ How do volume and variety affect process design?

● The overall nature of any process is strongly influenced by the volume and variety of what it
has to process.
● The concept of process types summarizes how volume and variety affect overall process
design.
● In manufacturing, these process types are (in order of increasing volume and decreasing
variety) project, jobbing, batch, mass and continuous processes. In service operations,
although there is less consensus on the terminology, the terms often used (again in order of
increasing volume and decreasing variety) are professional services, service shops and mass
services.

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 ❯ How are processes designed in detail?

● Processes are designed initially by breaking them down into their individual activities.
Often common symbols are used to represent types of activity. The sequence of activities in
a process is then indicated by the sequence of symbols representing activities. This is called
‘process mapping’. Alternative process designs can be compared using process maps and
improved processes considered in terms of their operations performance objectives.
● Process performance in terms of throughput time, work-in-progress and cycle time is
related by a formula known as Little’s law: throughput time equals work-in-progress multi-
plied by cycle time.
● Variability has a significant effect on the performance of processes, particularly the relation-
ship between waiting time and utilization.

CASE STUDY
The Action Response Applications
Processing Unit (ARAPU)

Introduction
Action Response is a London-based charity dedicated to
providing fast responses to critical situations through-
out the world. It was founded by Susan N'tini, its Chief
Executive, to provide relatively short-term aid for small
projects until it could obtain funding from larger donors.

Source: Shutterstock.com: Phovoir

The charity receives requests for cash aid usually from
an intermediary charity and looks to process the request
quickly, providing funds where and when they are needed.
‘Give a man a fish and you feed him today, teach him to
fish and you feed him for life; it’s an old saying and it makes
sense but, and this is where Action Response comes in, he
might starve while he’s training to catch fish.’ (Susan N'tini)
Nevertheless, Susan does have some worries. She faces
two issues in particular. First, she is receiving complaints
that funds are not getting through quickly enough. Second, the delays over the processing of the applications. A sec-
the costs of running the operation are starting to spiral. She ond charity representative complained that when he tele-
explains: ‘We are becoming a victim of our own success. We phoned to find out the status of an application, the ARAPU
have striven to provide greater accessibility to our funds; people staff did not seem to know where it was or how long it
can access application forms via the internet, by post and by might be before it was complete. Furthermore he felt that
phone. But we are in danger of losing what we stand for. It is this lack of information was eroding his relationship with
taking longer to get the money to where it is needed and our his own clients, some of whom were losing faith in him as a
costs are going up. We are in danger of failing on one of our result: ‘trust is so important in the relationship’, he explained.
key objectives: to minimize the proportion of our turnover that Some of Susan’s colleagues, while broadly agreeing with
is spent on administration. At the same time we always need to her anxieties over the organization’s responsiveness and effi-
be aware of the risk of bad publicity through making the wrong ciency, took a slightly different perspective. ‘One of the really
decisions. If we don't check applications thoroughly, funds may good things about Action Response is that we are more flexible
go to the “wrong” place and if the newspapers gets hold of the than most charities. If there is a need and if they need support
story we would run a real risk of losing the goodwill, and there- until one of the larger charities can step in, then we will always
fore the funds, from our many supporters.’ consider a request for aid. I would not like to see any move
Susan held regular meetings with key stakeholders. One towards high process efficiency harming our ability to be open-
charity that handled a large number of applications for minded and consider requests that might seem a little unusual
people in Nigeria told her of frequent complaints about at first.’ ( Jacqueline Horton, Applications Assessor)

212 PART TWO DESIGNING THE OPERATION

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 Others saw the charity as performing an important coun- key the information on the application into the system. The
selling role. ‘Remember that we have gained a lot of experi- coding stage takes about 20 minutes for each application.
ence in this kind of short-term aid. We are often the first people Files are then sent to the senior applications assessor’s sec-
that are in a position to advise on how to apply for larger and retary’s desk. As assessors become available, the secretary
longer term funding. If we developed this aspect of our work we provides the next job in the line to the assessor.
would again be fulfilling a need that is not adequately supplied About 100 of the cases seen by the assessors each week
at the moment.’ (Stephen Nyquist, Applications Assessor) are put aside after only 10 minutes of ‘scanning’ because the
information is ambiguous, so further information is needed.
The Action Response Applications The assessor returns these files to the secretaries, who write
Processing Unit (ARAPU) to the applicant (usually via the intermediate charity) request-
Potential aid recipients, or the intermediary charities repre- ing additional information, and return the file to the ‘receipt’
senting them, apply for funds using a standard form. These clerks who ‘store’ the file until the further information even-
forms can be downloaded from the Internet or requested tually arrives (usually between one and eight weeks). When it
via a special help line. Sometimes the application will does arrive, the file enters the process and progresses through
come directly from an individual community leader but the same stages again. Of the applications that require no fur-
more usually it will come via an intermediary charity that ther information, around half (150) are accepted and half (150)
can help the applicant to complete the form. The applica- declined. On average, those applications that were not ‘recy-
tion is sent to ARAPU, usually by fax or post (some were cled’ took around 60 minutes to assess.
submitted online, but few communities have this facility). All the applications, whether approved or declined, are
ARAPU employs seven applications assessors with sup- stored prior to ratification. Every Thursday the Committee of
port staff who are responsible for data entry, coding, filing Trustees meets formally to approve the applications asses-
and ‘completing’ (staff who prepare payment, or explain why sors’ decisions. The committee’s role is to sample the deci-
no aid can be given). In addition, a board of non-paid trustees sions to ensure that the guidelines of the charity are upheld.
meets every Thursday, to approve the assessors’ decisions. In addition the committee will review any particularly unu-
The unit’s IT system maintained records of all transactions, sual cases highlighted by the applications assessors. Once
providing an update on the number of applications received, approved by the committee, the files are then taken to the
approved, declined, and payments allocated. These reports completion officers. There are three ‘decline’ officers whose
identified that the unit received about 300 new applications main responsibility is to compile a suitable response to the
per week and responded to about the same number (the applicant, pointing out why the application failed and offer-
unit operates a 35-hour week). But while the unit’s financial ing, if possible, to provide helpful advice. An experienced
targets were being met, the trend indicated that cost per declines officer takes about 30 minutes to finalize the file and
application was increasing. The target for the turnaround of write a suitable letter. Successful files are passed to the four
an application, from receipt of application to response, was ‘payment’ officers where again the file is completed, letters
20 days, and although this was not measured formally, it was (mainly standard letters) are created and payment instruc-
generally assumed that turnaround time was longer than tions are given to the bank. This usually takes around 50 min-
this. Accuracy had never been an issue as all files were thor- utes, including dealing with any queries from the bank about
oughly assessed to ensure that all the relevant data was col- payment details. Finally the paperwork itself is sent, with the
lected before the applications were processed. Productivity rest of the file, to two ‘dispatch’ clerks who complete the doc-
seemed high and there was always plenty of work waiting for uments and mail them to the applicant. The dispatch activity
processing at each section, with the exception that the ‘com- takes, on average, 10 minutes for each application.
pleters’ were sometimes waiting for work to come from the The feeling among the staff was generally good. When
committee on a Thursday. Susan had conducted an inspec- Susan consulted the team members, they said their work
tion of all sections’ in-trays that had revealed a rather shock- was clear and routine, but their life was made difficult by
ing total of about 2,000 files waiting within the process, not charities that rang in expecting them to be able to tell them
counting those waiting for further information. the status of an application they had submitted. It could
take staff hours, sometimes days, to find any individual file.
Processing applications Indeed two of the ‘receipt’ clerks now were working almost
The processing of applications is a lengthy procedure requir- full-time on this activity. They also said that charities fre-
ing careful examination by applications assessors trained to quently complained that decision making seemed slow.
make well-founded assessments in line with the charity’s QUESTIONS
guidelines and values. Incoming applications are opened by
one of the four ‘receipt’ clerks who check that all the neces- 1 What objectives should the ARAPU process be trying
sary forms have been included in the application; the receipt to achieve?
clerks take about 10 minutes per application. These are then 2 What is the main problem with the current ARAPU
sent to the coding staff, in batches, twice a day. The five cod- processes?
ing clerks allocate a unique identifier to each application and 3 How could the ARAPU process be improved?

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