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CHAPTER 8
PURCHASING ANALYSIS TOOLS AND TECHNIQUES
both internal and external to the company. Some processes produce products
or services that are invisible to the external customer but are essential to the
effective management of the business. These are referred to as administrative
processes. Another category of management processes includes actions that
managers take to support the business processes. Management processes
include goal setting, day-to-day planning, performance feedback, rewards and
resource allocation.
8.4.2 THE BENEFITS OF STUDYING COMPANY PROCESSES
A business is only as effective as its processes. Effective processes can help to
accomplish business goals and objectives. People working within the processes
can influence the effectiveness and efficiency of the processes to which they
contribute. However, individual and teamproblem solving seldom focuses properly
on total system process improvement. Many performance improvement studies
focus on the improvement of individual procedures, often within a defined part of
a company, e.g., within engineering or within manufacturing, but ignore the overall
process. Process mapping has been shown to provide a proven tool with which to
understand and change overall processes to improve overall performance.
8.4.3 THE PROCESS MAPPING CONCEPT
Process mapping is based on a systematic, structured analysis. The benefits of
process mapping include reductions in product and service development costs,
fewer system integration failures, uniformly better process understanding and
improvement in overall business enterprise operations and performance. The
following key points can summarise the basis process mapping concepts:
• Establish what functions a process should perform.
• Understand a process or system by creating a process map that graphically
shows steps in a process and activities within these steps.
• Structure the process map as a hierarchy with major functions at the top and
successive process map levels showing greater levels of detail.
A process map can be used to help make an existing process visible so that
it can be understood more readily by those working in and managing it. It can
serve as a basis for analysis of a process, to identify aspects of the process
that need to be changed as well as those that should be retained. Finally, it can
provide a useful framework for determining where to establish measurement
points for ongoing management. Aprocess map considers activities, information
and interfaces between functions. Process mapping usually begins with a
functional process representation of ‘What’ the process is, separated from the
design of ‘How’ the process should be, often referred to as the ‘as is’ and ‘to
be’ processes. Process mapping starts by representing the whole process at
a very high level with one box which names the process, for example, ‘Order
Placement’. The single box is then expanded in more detail on another high-level
process diagram with several boxes connected by arrows. These boxes are
further broken down into sub-processes at increasingly higher levels of detail.