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5.01 - Business Processes and Cellular Design


The natural group team concept is introduced in guide 5.02. The concept is that teams are grouped around the key business processes involving material and information flows. These processes must first be simplified to eliminate non-value added activities.

This creates an organization structure comprised of teams, some of which are permanent operational groups, while others are temporary groups or project teams created for a specific purpose, such as factory or cell re-design and to introduce a new technology or methodology.

Large organizations can be simplified to appear like integrated sets of small businesses with the following characteristics:-

  • Customer-supplier relationships link the missions of each of the groups or teams.
  • Four measures of performance for each team covering quality, work-in-progress, lead-time or process time and percentage achievement of scheduled activities form the basis for driving continuous improvement and improved competitiveness. These measures cascade throughout the business and provide the overall performance measures.
  • The charter or role specification for each natural group team sits naturally under the mission and objectives of the whole business and provides the focus for achievement of the mission.

Traditional Organisations

Traditional organizations are made up of functional departments that usually break-up and fragment the natural business processes. This creates a loss of cohesion, excessive paperwork and the need for support staff to progress paperwork and the actual job through multiple departments.

As work follows the natural business processes that have become obscured by the fragmented departmental structures there are many changes in ownership and consequently a lack of control.

Business Process Organisations

When a new ‘departmental’ structure is formed around actual business processes fewer departments result than in Traditional Organization. Managerial structures are then simplified to match the new business structure such that every process has a clear owner and support team. The results are:-

  • Flatter management structures with fewer layers that facilitates improved communications
  • Reduced overheads
  • Reduced lead-and improved quality in process performance.

Typical Business Natural Process Groups

Top level processes

  1. Development and Product Introduction Process - Marketing, R & D, Product Design, Manufacturing Systems Engineering.
  2. Manufacturing Operations and Materials Flow Management - Materials Logistics, Manufacturing Management, Industrial Engineering Maintenance.
  3. Operations Support processes - Sales, finance, administration, personnel, total quality support co-ordination.

Supporting sub-processes

  1. Supporting Planning and Marketing
  2. Product Introduction Process including System design and Development
  3. Customer Interfacing and Enquiry Processing
  4. Materials Acquisition and Supplies Management
  5. Manufacturing Support and Planning & Control of materials flow
  6. Tool management
  7. Plant Acquisition
  8. Plant Maintenance
  9. Waste Management
  10. Quality Audit for all processes
  11. Site Services
  12. Personnel and Staff recruitment and support, including Training
  13. Finance, payroll, administration and reporting, invoicing process
  14. Sales and Distribution
  15. Project Management and Change Management