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What Is The Value Of Process? June 2, 2009

Posted by Tim Rodgers in Management & leadership, Process engineering.
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Many years ago I attended an all-hands meeting at a manufacturing operation at Hewlett-Packard. The general manager of the division used the first part of the meeting to report on the key performance indicators from the previous month. One of the measures was the overall production yield from the operation, basically the percent of shippable product that wasn’t scrapped due to defects. Everyone was thrilled to hear the GM reveal that production yield had increased in the previous month, and in fact had improved significantly from the trend line of the past year or so. The room broke into applause and few people whooped and whistled.

When the noise died down, the GM gave everyone a stern look and said, “When you don’t know how you did it, you have no way of knowing if you can do it again.” He strongly suspected that the jump in yield was just an aberration, and the improvement wasn’t sustainable. He was right. The following month the yield declined and settled back to the historical trend line.

The GM eventually organized a huge effort around process stabilization and yield improvement, and ultimately there were some permanent gains. That’s a subject for a later post. What stuck in my head was his point about the value of process. I’ve met a lot of people who hate the idea of process, who think that process inhibits creativity and innovation, but really process is just doing things in a repeatable way in order to obtain a more predictable outcome. I’m not going to suggest that there needs to be a process for every human activity, but if a work team is trying to achieve a certain level of performance, they need a documented process, like a recipe or driving directions, to ensure they can do it again.

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Comments»

1. Paul Cheung - June 4, 2009

Tim,
I really enjoy reading your blogs. As to Process, I sometimes hear people claim that they have smart people working for them, therefore, they are confident that they can produce good products, etc. I think it may be so when the company is small, but once it gets to certain size, process control determines the success. Many companies with a lot of smart people failed miserably due to lacking of good business processes.

Paul


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