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© 2011 by Taylor & Francis Group, LLC
Chapter 6
Processes
In Going Lean: A Guide to Implementation (2000) we
defined key business processes as patterns of inter-
connected value-adding relationships designed to meet
business goals and objectives.Two things are important
when looking at businesses processes.
1. Which processes are key to the core business?
2. How do you design and optimize key processes
to deliver value to the customer, business, or value
stream?
Each business process comprises a number of steps,
tasks, or activities that convert a series of inputs into
outputs. Our example (Table6.1) shows some common
processes but you should always dene and agree upon
your own for your organization.
In our experience, many companies make the mistake
of defining too many processes. It is better to settle for
between four and ten key business processes that can be
defined from start to end.
Many companies find it useful to classify their pro-
cesses into categories. For example, you might divide the
processes into three categories:
128 ◾  Staying Lean: Thriving, Not Just Surviving
© 2011 by Taylor & Francis Group, LLC
1. Processes that focus the overall direction of the
organization but do not directly deliver against the
targets—strategic processes
2. Processes that directly deliver on top-level targets
core processes
Table6.1 Core business processes.
Key Business Process Denition
1. Product Lifecycle
Management
Managing customer needs for new
products. Designing and developing
new products, bringing them to market,
and retiring obsolete products.
2. Order Creation Winning new business with existing or
new customers.
3. Order Fulllment Transforming raw materials into
products that meet customer orders
including taking orders, order
processing, production planning,
production, delivery to the customer,
and payment management.
4. Technology, Plant and
Equipment
Management
Developing, managing, and
maintaining operating equipment,
including IT.
5. Human Resource
Management
Developing, managing, and
maintaining employees, including
training, recruitment, and retention.
6. Strategy and Policy
Deployment
The strategic management of the
company, focusing on change and
management of critical success
factors.
7. Supplier Integration and
Development
Integrating suppliers into other key
business processes, developing new
suppliers, and managing supplier
relationships.
8. Continuous
Improvement
Continuous radical, or incremental,
improvement of other key business
processes.
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© 2011 by Taylor & Francis Group, LLC
3. Processes that indirectly deliver on top-level targets—
support processes
The strategic processes set direction; the core processes,
aided by the support processes, deliver the targeted results.
Within the core processes, some can be identified as cus-
tomer facing, such as order fulfillment, order creation, and
product life-cycle management. Designing and managing
core processes effectively and efficiently ensures that the
company can compete and remain competitive.
Our companion book Going Lean: A Guide to
Implementation (2000) describes how you can select
processes to deliver targeted improvements, and we refer
you to this for further information.
We believe that improvement in core processes either
focuses primarily on waste reduction or, alternatively, on
value creation. For example, improving the order fulfill-
ment process is primarily reducing or eliminating waste
so as to enhance performance, increase capacity, and
reduce cost. Focusing on order creation primarily adds
value by generating more sales to utilize excess capacity.
Indeed, some people will argue that you cannot create
value by increasing sales until you have improved oper-
ations and stabilized the process, thus releasing excess
capacity. We believe the most effective way is to improve
both processes simultaneously; absorbing the excess
capacity generated by improvements in processes such as
order fulfillment with new sales generated through value-
adding processes such as the order creation process.
Why do waste reduction and value enhancement go
hand in hand? Waste reduction is often considered a way
of reducing costs; after all, waste is costly. But cost is not

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