Thursday, January 27, 2005

Baldrige Criteria on Process Management

Business Times p.B.1
Thursday, January 27, 2005

By Moje Ramos-Aquino, FPM
Baldrige Criteria on Process Management

Harry S. Hertz, director of Baldrige National Quality Program, says that for 16 years the Baldrige Criteria have been used by thousands of US organizations to stay abreast of ever-increasing competition and to improve performance. “For today’s business environment, the Criteria help organizations respond to current challenges: openness and transparency in governance and ethics, the need to create value for customers and the business; and the challenges of rapid innovation and capitalizing on knowledge assets.” The Criteria can be used by small or large organizations involved in service or manufacturing as a valuable framework that can help organizations plan in uncertain environment.

Baldrige Criteria and Balanced Scorecard are definitely complementary. One common area is Process Management. Both give big emphasis on value creation processes. These are product, service and business processes that aim to create value for your customers and other key stakeholders, and to improve a company’s marketplace and operational performance.

Baldrige 2004 Criteria for Performance Excellence asks how your processes contribute to business profitability and success and how they address key factors in design effectiveness, including cycle time, productivity and cost control.

Baldrige calls attention to key requirements for your products and services for those processes to achieve efficiency, as well as to meet changing customer requirements.

These factors could be safety, long-term performance, environmental impact, “green” manufacturing, measurement capability, process capability, manufacturability, maintaina­bility, variability in customer expectations requiring product or service options, supplier capability and documentation.

Your key business processes, according to Baldrige Criteria, are those nonproduct and nonservice processes that you consider most important to business growth and success. Baldrige enumerated the following diverse key business processes: processes for innovation, research and development, technology acquisition, information and knowledge management, supply chain management, supplier partnering, outsourcing, mergers and acquisitions, global expansion, project management, and sales and marketing.

BayanTel’s corporate planning expert Marlon Arada says, “our performance to-date would have not been possible without effective processes that we’ve put in place or at least set in motion. These key processes support the only 3 jobs most important within Bayantel: 1) selling 2) delivering 3) collecting. Internally, it’s a well known and an accepted fact that if your job does not fall in any of the 3, nor support even one of them, then, you have a problem.”

Bayan Telecommunications Inc. (BayanTel) is a telecommunications company offering an extensive breadth of traditional links and circuitry as well as cutting-edge data and voice applications to their service areas in Metro Manila and Bicol and local exchange service areas in the Visayas and Min­danao regions. They serve a combined population of more than 25 million, nearly 33 percent of the population of the Philippines

Mr. Arada says that their key processes under these three jobs include:

1. Customer understanding—perceiving customers needs and preferences through research, documentation and analysis of all points of customer interactions, and electronic processing of customer information
2. Alignment process—done through identification and documentation of Key Performance Indicators across the whole organization to ensure that KPIs directly support corporate objectives, including a check of skill-set against job requirement.
3. Focus and prioritization—limiting company and individual objectives to just 3-4 for both business and support groups.
4. Cost management—opti­mizing and systematically allocating resources, particularly people
5. Strategic action programming, not just planning, including capital budgeting
6. Productivity improvement
7. Quality improvement—going by the Baldrige Criteria
8. Project and process management for network and product development/technology adoption process

(Moje, president of Paradigms & Paradoxes Corp., designs and facilitates programs and initiatives for organization excellence. Her e-mail addy is

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