Process Management^©

Arthur M. Schneiderman

From an economics point of view, an organization utilizes various "factors of production" (usually grouped as capital, labor, materials, and knowledge) to create economic value. But as managers we tend to look at organizations from different perspectives or views, where our focus is on one or another of these factors. For example, in the process view of an organization, we see it as a system of interacting processes that convert inputs into outputs that customers are anxious to buy. Our focus is on process knowledge as captured in operating procedures or methods (tangible knowledge) and skill (intangible knowledge). The people view focuses on labor, the optimal management of the group of individuals who execute these processes. Often these views are called the "hard" and "soft" sides of management. Supply chain and asset management focus on the remaining two factors of production: materials and capital.

In my experience the greatest current weaknesses in Western organizations lie in the generation (i.e. process learning) and retention (process memory) of process knowledge. The rising popularity of "Knowledge Management" is supportive of this view. This weakness places us at an actual or potential disadvantage against our worldwide competition, who often may have fewer capital assets but greater process knowledge. For that reason, I have focused my attention on the process view of the organization. I also believe that if you get the processes right, most of the people problems dissolve.

We judge the effectiveness and efficiency of a process, the two basic elements of its value creation, by measuring the degree to which its output meets its customers requirements as well as the required factor usage. Therefore, the twofold theme that runs through my consulting and writing is process learning and performance measurement.

Over the years, I have developed a model for process management that integrates a number of what to most appear to be disparate process related concepts (some would call them fads): ISO9000, reengineering, performance measurement (and the balanced scorecard), SQC/SPC and TQM. I use this model as my roadmap in my consulting and writing activities.

Last modified: August 13, 2006

Process Management©

Process Management^©