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2. Product Development & Process

Selection

Product Development

Ref: Sheet 2.1 Product

Development

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Products are born.

They live and they die.

Product Life
Cycle Product life cycle can be divided into four stages:

• i) Introduction
• ii) Growth
• iii) Maturity
• iv) Decline

Product Life Cycle, Sales, Cost, and Profit

Cost of
Sales Revenue
Sales, Cost & Profit .

Development
& Manufacture

Profit
Cash flow
Loss
Time

Introduction Growth Maturity Decline

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Product Life Cycle

Introduction
• The product life-cycle stage in
which the new product is first
distributed and made available
for purchase.

Product design begins to stabilize

Product Effective forecasting of capacity

Life Cycle becomes necessary
Growth
Adding or enhancing capacity may
be necessary to accommodate the
increase in product demand.

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Competitors are now

established
Product High volume, innovative
Life Cycle production may be needed
Maturity
Improved cost control

Product Life • Product life is at an end.

Cycle • Unless product makes a special contribution to the

firm’s reputation or can be sold with high

Decline contribution, their production must be terminated.

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Processes & Two broad process classifications

include
Operations • Intermittent operations – produce

Systems a variety of products in lower

volumes

Available • Repetitive operations – produce

one or a few standardized products
Alternatives in high volume

• Process selection is based on five considerations

• Type of process; range from intermittent to

Process continuous
• Degree of vertical integration

Selection • Flexibility of resources

• Mix between capital & human resources
• Degree of customer contact

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Process
Selection

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Process
Improvement
Techniques

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Process Improvement Techniques

• 1. Six Sigma
• Six Sigma is a process improvement strategy that was first introduced at Motorola for quality
improvement, later making its way into General Electric and many other manufacturing
companies and businesses.
• The primary goal of this process improvement strategy is to help companies measure
inconsistencies and defects within a process to deliver the best products and services they can
muster to their loyal customers.
• This is done through the five stages of process improvement: define, measure, analyze, improve,
and control, or DMAIC.
• Since Six Sigma relies on statistics and data in order to make decisions more so than the other
methodologies we’ll describe, the define, measure, and analyze steps are most important for
determining the improvements required and articulating these improvements in terms of specific
data.
• After the required improvements have been defined, the improvement and control steps address
the root causes of the problems found and then control the improved process to correct any
defects or deviations.

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Process Improvement Techniques

• 2. PDCA Cycle (plan, do, act, check)
• The PDCA cycle methodology was originally created by Walter Shewhart who applied the
scientific method to his work in economic quality control. It was built for interactive
problem-solving and process improvement. In time, this method was advanced further
by W. Edwards Deming, who also applied it to process improvement and quality control.
• The four primary steps to the PDCA cycle include planning, doing, checking, and acting.
In the planning process, your business decides on the problem you need to solve and
develops a solution. You then move into the doing stage, where you test the plan and
implement it on a small scale.
• After the first two steps are complete, you’ll move into the checking and acting stages
which involve checking the results of your doing stage and deciding whether or not you’d
like to roll out this change on a larger scale.
• The essence of PDCA is to test improvements to business processes on a small and
controlled scale, and, if they work, then roll them out to the rest of your processes and
workflows.

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Process Improvement Techniques

• 3. Lean Six Sigma
• Lean Six Sigma combines the PDCA methodology and the Six Sigma
methodology all in one. This methodology can be used to improve
business processes by utilizing tools, such as the 5S method, and
removing waste using the PDCA and the DMAIC method and control
charts from Six Sigma.
• This results in a strategy that has superior problem-solving
capabilities and a proven way of implementing, testing, and
controlling improvements in order to verify that they work as
intended.

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Process Improvement Techniques

• 4. Kaizen (continuous improvement)
• The Kaizen, or continuous improvement methodology, centers around
incremental, regular improvements to various workflows and manufacturing
processes. The core idea of Kaizen is that by utilizing the strengths of collective
teams within an organization, a powerful improvement engine can be created.
• The strength of Kaizen is that it utilizes employees at all levels of an organization
and places them into the improvement process, everyone from leaders and
managers to employees.
• Kaizen works by setting goals, providing background information, reviewing the
current state of business processes, and identifying required improvements.
• Next, those improvements are implemented and reviewed for what worked and
what didn’t. The results are reported, and a new cycle can be started for
additional improvements as required.

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Process Improvement Techniques

• 5. Total Quality Management (TQM)
• TQM, or total quality management, is a continuous improvement process that
aims to do the right things from the very beginning and every time, with the
consumer being the ultimate judge of quality. This differs from methods like
Kaizen, where the employees were primarily responsible for judging quality.
• In TQM, the focus is on customer satisfaction, commitment by employees,
adherence to processes, and utilizing data to eliminate errors and bottlenecks.
• Since TQM aims to do everything right from the very beginning, this method is
heavily invested in education, training, leadership, communication, and having
the right organizational support structures in place. This also involves developing
incentives, including employee rewards and recognition, to help improve
workflows and processes.
• Over time, TQM has given way to a newer approach to process improvement and
is more commonly referred to as business process management.

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Process Improvement Techniques

• 6. Theory of Constraints
• With the Theory of Constraints approach, bottlenecks and process
improvements are seen through a scientific lens. The most important
limiting factor, or constraint, is first identified. This is the ultimate
item that stands in the way of achieving the organization’s goals and
the improvement they seek.
• Once this constraint is identified, it is systematically improved until it
no longer interferes with business processes and is fully optimized.

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Process Improvement Techniques

• 7. 5S method
• The 5S method is an improvement methodology that was originally created by the
Toyota Motor Corporation to help maximize employee productivity by establishing a safe,
clean, uncluttered, and well-organized workplace. The 5S method is derived from five
Japanese terms: seiri (sort), seiton (set in order), seiso (shine), seiketsu (standardize), and
shitsuke (sustain).
• When applied to process improvement, the 5S method can be implemented by:
• Identifying a business process that needs to be improved, and sorting what is needed
and not needed with the help of process owners or managers.
• Organizing or “setting in order” tasks, steps, information, and flows of approval.
• “Shining” or cleaning up the process by looking for redundancies or automating manual
tasks.
• “Standardizing” and “sustaining” these improvements via continuous improvement
cycles.

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Process Improvement Techniques

• 8. SIPOC analysis
• A SIPOC analysis is a process improvement method that is an acronym
for suppliers, inputs, processes, outputs, and customers. Oftentimes,
a SIPOC analysis is perceived as a diagram or business process map
that shows all of the inputs, outputs, connections, and decision points
present in a workflow or process.
• These diagrams are used to bring alignment between all of the
stakeholders of a process, making it more efficient and fixing any
issues or bottlenecks.

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Process Improvement Techniques

• 9. Process mapping
• Process mapping is similar to a SIPOC analysis in that it is a detailed
diagram showing business processes in a visual format. When a
process is mapped out, it allows everyone involved in that process to
see it clearly in a visual format and, therefore, make improvements
and markups as required.

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Process Improvement Techniques

• 10. Value stream mapping (VSM)
• Value stream mapping, or VSM, is a process improvement strategy
that involves mapping out the series of steps required to produce and
provide the product or service customers need. In a value stream
map, a visual representation of the key steps and data required to
complete the delivery process is compiled and can then be
understood by all stakeholders in order to make improvements.

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Process Improvement Techniques

• 11. Kanban
• Kanban is a Lean workflow management tool that’s used to manage,
define, and improve product and service delivery for organizations.
Kanban is the Japanese word for “visual board” which is exactly what
this tool is — a visual board with “cards” that are moved from left to
right as a process is completed.
• Oftentimes, the columns of a Kanban board include requested items,
items that are in progress, and items that are completed. As your
organization works through processes, you can easily move tasks and
to-do items from one segment to another to visually see progress.

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Process Improvement Techniques

• 12. Business process management and business process automation
• Business process management (BPM) and business process
automation (BPA) are a structured approach to improving the
workflows and processes within your organization, as well as taking
the steps required to automate repetitive tasks to save time, save
money, and improve productivity.
• With BPM and BPA, various methods are used to model, analyze,
measure, optimize, improve, and automate your business process.
Depending on the complexity of your processes, the exact steps you
use to take your workflows from their current state to an automated
process can vary.

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