IMPROVEMENT TO THE PROCESS OF INCOMING MATERIALS · IMPROVEMENT TO THE PROCESS OF INCOMING MATERIALS ... e-commerce and global organizations. ... (CERVO & BERVIAN, 2002)

IMPROVEMENT TO THE PROCESS OF

INCOMING MATERIALS

Edson Hermenegildo Pereira Júnior (FARESC)

[email protected]

Simone Nasser Matos (UTFPR)

[email protected]

Luciano Scandelari (UTFPR)

[email protected]

This paper aims to show some results obtained with the use of a

methodology for process management in the Incoming materials area

of a medium sized company in the city of Curitiba and reports the

benefits achieved by implementing a methodollogy for process

management. Companies that want to excel in the market are looking

for different management techniques and seeking for the best quality of

their processes, which can provide them with a competitive advantage

in relation to the other similar players in the same complex and highly

aggressive environment. One factor contributing to the implementation

of process management is the involvement of people in developing their

activities, because without them the processes are not carried out

properly. A process needs to be well managed by a mapping system

that enables the analysis and identification of points to be improved. It

is essential that managers support the deployment of process

management in an organization. The contribution this paper is to

demonstrate that by applying a structured methodology for process

management, the manager will get improvements in his organization

and thus is being adapted to confront this new business environment.

Palavras-chaves: Process, Process Management, Quality

XVI INTERNATIONAL CONFERENCE ON INDUSTRIAL ENGINEERING AND OPERATIONS MANAGEMENT

Challenges and Maturity of Production Engineering: competitiveness of enterprises, working conditions, environment. São Carlos, SP, Brazil, 12 to 15 October – 2010.



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1. Introduction

The National Quality Foundation, in Brazil (FNQ, 2009) defines process as one of their

criteria of excellence, due to the differential that they exert on the organizations to gain

competitive advantage. Thus, companies that want to excel in the market are looking for

different management techniques, which may put them in advantage to their competitors, as

they are part of a complex and competitive environment, fighting for customers against their

local competitors, e-commerce and global organizations. Managers must learn to deal with

this changing environment, getting along with people and business, without losing focus in

the market. The Excellence in an organization depends crucially on its ability to pursue its

goals in harmony with their ecosystem. Thus, when the vision is for management processes,

with interaction among their functional areas, organizations analyse their client's needs and

the processes are targeted to serve them properly, as a system, keeping them satisfied.

A solution to this challenge is to manage the organization through its processes. But when

there isn’t a change of view on how companies work, the process management becomes a far

away activity. Moreover, it is necessary to develop a culture of promoting changes and the use

of systematic methods to facilitate their implementation into the organization.

The process management, with the help of a structured methodology, helps organizations

visualize the customer as their main objective, being part of their own ecosystem.

This paper presents some results obtained with the application of a methodology for process

management, developed by "MR Business Consulting Business," in the area of "Incoming

Materials" in a medium sized company in Curitiba and reports the benefits that the

implementation of a structured methodology generate in the organizations. The contribution

here is to demonstrate that by applying a structured methodology for process management, the

manager is able to achieve improvements in their organizations and thus prepare to face this

new business environment.

2. Management, Process and Quality

Based on the definitions of Krajewski (2009), De Sordi (2008), Oliveira (2007), Davenport

(1994), Hammer & Champy (1994) and Motta (1995), Process is a repetitive group of

activities, logically interrelated, involving people, equipments, procedures and information

which, when executed, transform inputs into outputs, add value and produce good and

profitable results to external and internal clients of the organization.

The processes are not set to act alone, but to interact, using competence centers or

organizational departments and holistic knowledge. A process may have its own set of goals,

involve a workflow that crosses departmental boundaries and requires resources of various

departments (KRAJEWSKI, 2009).

There are processes that do not have well-defined beginnings and ends and a sequence of

clearly defined activities (GONÇALVES, 2000a). These can be, however, of great impact for

the organization, because the essential activities in the company can be understood as

processes and these involve activities at operational, tactical and strategic levels, as well as

management practices.

Organizations need to review their business, their way of managing, of viewing and serving

accordingly their clients and suppliers. People within the organization must understand where

they are located and what their importance in the process is, to provide a valuable service,



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with good quality, focusing on the level of service supplied.

For Krajewski (2009), companies begin to realize that is not sufficient to just offer new

services and products, creative marketing and financial capability to face foreign competition

and the explosion of new technologies, but they must also focus on their unique expertise in

operations and the administration of their core processes.

In the last years the organizations have sought their development in a strategic way to excel in

such a competitive and strict market. This development, considering the strategic and

organizational aspects are (OLIVEIRA, 2007): lean and agile Structures, with appropriate

costs; quality as prime and basic condition; intense use of technologies; shortening life cycle

of products and services; proper disposal of wastes, based on the analysis of the value chain;

customer-focused management; increasing competition; be the best in their area of operation;

become a global company; act as an ecological and socially responsible company.

2.1Process Management

The management process enables a holistic view of business, providing the manager with the

conditions to look beyond their borders process.

By using the process management in an organization it is possible to promote the continuous

improvement of production processes, increasing efficiency levels and reducing losses, thus

maximizing profits (LOPES, 2008). Companies of any size, type and area of operation can be

restructured to be organized by processes. The company must analyze the type of their

business and consider what it is planned strategically and even where to go, when attempting

to transform into an organization of processes. It is important to check how the processes are

defined and if they are in line with their business objectives (GONÇALVES, 2000b).

Moreover, although companies may be organized and structured in relation to their mission

and objectives, the majority cannot be defined as companies organized by processes and they

do not often realize that there should be interactions between the various areas of the

company.

Some companies have no knowledge of how to use process management as well as its

benefits, others do not know if their current structures are adequate for process management

(GONÇALVES, 2000b). Therefore, care must be taken because the concepts can be used

erroneously and the organization will waste time, money and resources.

It is not enough identifying, mapping and describing the processes. Opportunities for

improvements must be created, preferably continuously. Still, it is important to measure the

process performance through key performance indicators (KPI) in order to check the

evolution generated by the improvements.

2.2 Quality Management

The process management is always related to the improvement and optimization of processes,

with reduction of the operating costs. Thus it is closely linked to quality management,

(PALADINI, 1995).

The first purpose of quality management in process is the elimination of the defects in the

product, but also meeting the customer requirements. And if the processes do not meet this

goal, the organization will lose its share in the marketplace. The quality planning creates

processes that can produce features that meet customer requirements (JURAN, 1992). The

process with focus on customer requirements should be considered in policy-making quality,



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as a basic principle, because the customer is the reason for the company existence

(PALADINI, 1995). Likewise, this principle is basic to the process management. According

to Hammer and Champy (1994), the quality process is developed through programs in the

structures and processes of the companies and seeks their gradual and continuous

improvement.

For Mororó (2008), the companies are not directed to the management of the improvements,

in a systemic way, in their processes. These actions are directed to improve some key

performance indicator that was running bad, but do not analyse the process itself.

Paladini (1995) also adds that the concepts of quality must be implemented, based on the

values and habits of employees, structuring them from bottom to top. That is, the examples

and funding must come from top management to all areas of business, but the introduction of

quality management should come from the people. Furthermore, the top management must be

responsible for creating an action plan focused on strategic goals of quality planning

(JURAN, 1994).

3. Methodology

In order to conduct a research it is necessary to have knowledge on how to proceed and obtain

the necessary information through the investigative process. So before starting any

exploration activity, it is important to define the object of research, what is intended to be

determined or validated, the population and sample to be investigated and what procedure

should be used to obtain the information necessary to validate or not the object of research.

This paper presents some results of quality improvement obtained by the application of a

process management methodology in the area of Incoming materials in a medium sized

company in the city of Curitiba.

First, a literature review was held to identify what has already been researched on the subject.

And then it was tried to identify the relevance of the subject in the related used publications.

The literature research is performed on existing material, consisting of books and scientific

papers. Scientific articles are useful, because they bring updated information (GIL, 1999).

The methodology of process management applied in the company studied was composed of

three phases and nine steps, as shown in figure 1.

Continuous Improvement

Process

DefinitionProcess

Improvement

Step 1

Preparation

Requirements

Definition

Problem

Analysis

Process

Evaluation

Setting

Targets

Planning for

Improvement

Management

System

Implementation

of Improvement

Process

Analysis

Step 2

Step 3

Measurement

System

Step 4

Step 5

Step 6

Step 7

Step 8

Step 9



5

Figure 1 – Process Management Methodology

Source: Motta, 2001

Initially, it was created a management processes team, which aimed to provide support for the

field research, which was crucial at all stages of the methodology, because they were

professionals involved in the study. There were comments about the activities of the area to

identify the processes and their interrelation with other areas of the organization. Observation

is crucial in the sciences. It is defined as the application of the physical senses to the object of

research, to obtain a clear and accurate understanding (CERVO & BERVIAN, 2002).

Customers of the process were also involved to define their key requirements. And then,

asked if it was set a value for each requirement and its importance to process and its current

performance. This activity resulted in the prioritization of requirements, which should be

studied to obtain improvements for customers. We also identified several problems that made

the process inefficient.

4. Improvement to the Process of Incoming Materials using the Process Management

Methodology

People manage effectively when the decision can be based on methodologies, techniques and

processes, because the integration of the various parts and activities of the organization

provides them with a logical and clear vision of the overall decision-making process

(OLIVEIRA, 2007). And every important activity is performed by professionals in the

companies and is included in some process, because there is not a product or service offered

by a company without a business process being carried out (GONÇALVES, 2000a).

The key activities in the analysis and improvement of existing processes are (DAVENPORT,

1994):

a) Map the current process;

b) Measure the current process based on the objectives of the suggested process and make

comparisons;

c) Evaluate the current process based on the levels of the attributes of the new process (the

basis for comparisons);

d) Observe problems or deficiencies, based on comparisons made;

e) To suggest improvements to the current process;

f) Analyze and evaluate the technologies used, either from the information or about the

organization, which may still be used;

The methodology for the study of processes used to develop this research was the "Process

Management Methodology" which was illustrated in Figure 1 and it is consistent with the

findings of Davenport, as quoted above.

The processes should be classified hierarchically in macro-processes, analyzing the ones

which can be grouped and divided into sub-processes and activities, depending on the analysis

desired (GONÇALVES, 2000b). This methodology defines that an organization must be

composed of macro-processes, which should be divided into processes. The processes are

composed of sub-processes, which can be subdivided into activities, as shown in figure 2.



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Activities

Macro

Processes

Sub-Processes

Figure 2 – Processes hierarchy

Source: Motta, 2001

In phase one, "Process Definition", together with the processes management team, the limits

of the Incoming Materials macro-process were identified, in order to know their dimension.

By the observation and study of the macro-process, the group identified that it belonged to the

department of “Materials Management” and it was composed of ten processes (figure 3). The

inputs and outputs of the processes and their suppliers and customers were respectively

identified as well.



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Logistic

Company

SUPPLIER INPUTS PROCESSES OUTPUTS CUSTOMER

External

Supplier

National

Standard

Devolution

Direct Delivery

Samples

Purchase Order

Imported Items

Samples

Temporary

Nationalization

Available

Material

Invoices

SC

CS

R&D

HR

SLG

Accounting

Mail

Purchase Order

National Items

National

Materials

Imported

Materials

Logistics Repair

Figure 3 – Incoming Materials Macro-process – Level 0

We mapped all the processes identified in the "Macro-process" shown in figure 3, to identify

possible points of improvement. The team observed that the participation and involvement of

many professionals in each company's activity were intense and critical. As an example,

figure 4 shows a map of "Purchase Order Process - National Items".

Through interviews to the internal customers of these processes, eight key requirements

(Table 1), that the macro-process should meet to satisfy the customers, were identified.

So, the customers were asked to put values to the importance and performance for each

requirement, according to their perception. The values should be "one" (less important or very

poor performance) to "ten" (extremely important or excellent performance). Based on those

considerations, the Matrix "Importance X Performance" was generated (figure 5). Then we

prioritized the requirements that should be studied, considering they were located in the lower

right quadrant, i.e. requirements with high importance and low performance.



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Pu

rch

ase

Inco

min

g M

ate

ria

ls

Receive Invoice

Check invoice with

Purchase Order

Create Material

Code in the ERP System

Solution of the

Divergences

Stamp on the invoice

the Material Code

Purchase Process

Forward Invoice to Purchaser

Traceability

Incoming Inspection

N

Y

The problem was solved?

N

Y

Ok?Material in

ERP System?

Process of Incoming

Inspection

TraceabilityProcess

Figure 4 – Process "Purchase Order - National Items"

Item Requirements

A Documentation divergent.

B Response time.

C Divergence of quantities.

D Errors in identification tags.

E Standardization of packaging.

F Prioritizing the release of materials.

G Location of materials.

H Integration of areas with Incoming Materials.

Table1 – Key requirements of the Incoming Materials Process

7,4

7,8

8,2

8,6

9,0

9,4

9,8

8,5 9,0 9,5 10,0

Perf

orm

an

ce

Importance

Documentation divergent.

Time Response.

Divergence of quantities.

Errors in identification tags.

Standardization of packaging.

Prioritizing the release of materials.

Location of materials.

Integration of areas with Incoming Materials.

Figure 5 – "Importance X Performance Matrix" of the Key requirements

Then the Key Performance Indicators (KPI), which were implemented to measure the

performance of the macro-process, were defined, according to what is shown in table 2.



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Table 2 – Key Performance Indicators of the Incoming Materials Macro-Process

In Phase two, "Process Analysis", a detailed analysis of the processes was performed. The key

performance indicators were also implemented and then accordingly monitored. We identified

several problems that occurred in the macro-process. Then, the surveys were conducted

during 20 days to identify the dimension of each problem. We analyzed the documentation

received and issued in the process. We can see examples of the results obtained in this activity

in figures 6, 7 and 8.

44%

56%

Invoices with Divergence

Invoices Ok

Figure 6 – Graph of the result encountered in process analysis

Requirements Importance Performance Priority KPI

A Documentation

divergent.

9,9 8,6 1 Divergence Invoice

B Time Response. 9,5 8,0 2 Time Response of

Divergence Invoice

C Divergence of

quantities.

9,8 9,6 4

D Errors in

identification tags.

9,5 8,8 6 Failure in

Identification Tags.

E Standardization of

packaging.

8,8 8,0 7

F Prioritizing the

release of

materials.

9,8 8,7 5 Release Time of

Materials.

G Location of

materials.

9,0 8,3 8 Release Time of

Materials.

H Integration of areas

with Incoming

Materials.

9,6 8,4 3 Divergence Invoice



10

0

20

40

60

80

100

120

140

A B C D E F G H I J K L M

Am

ou

nt o

f In

voic

es

Purchaser

Invoices Ok


Figure 7 – Graph of amount of invoices per Purchaser

0

10

20

30

40

50

60

70

80

90

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Am

ou

nt o

f In

voic

es

Days

Amount of Invoices per day


Figure 8 – Graph of amount of invoices per day

In phase three of this methodology, possible solutions for each of the problems identified in

phase 2 were defined, through several meetings of the processes management team. At least,

one solution was proposed for each problem. In table 3 the problems are listed and indicated

by "Pn" and their corresponding solution denoted by "Sn".

All the proposed solutions were implemented. The survey of the results is not presented in

this work to maintain the confidentiality of the company information. However, the reduction

of the divergences in the documentation was significant, enabling the reduction of the

divergence in response time and the release of the material in more than 50%.



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Proposed Solutions

P1 Organization of the material delivery schedule.

S1 Negotiate the hours of delivery of the materials with the transport

companies.

P2 Organization of Invoices.

S2 Place each invoice in the specified location of the process of Incoming

Materials.

P3 Integrate Divergent Invoices Sheet in ERP System.

S3 Develop an interface in the ERP System.

P4 Integration of areas with Incoming Materials.

S4 Organize the layout to the Area of Incoming Materials.

P5 Protection of the packaging of Company’s Logistics Repair.

S5 Negotiate the exchange of the Protection of the packaging of Company’s

Logistics Repair.

P6 The volume of invoices with errors

S6 Submit the results to the Incoming Materials Manager and to work with

multifunctional team.

Table 3 – Matrix of Problems and Solutions

The process management team decided not to deploy step 9, "Management System" in this

process because their managers have participated in regular meetings to disseminate and

discuss the performance of their areas.

During the study, the process management team was crucial to the implementation of the

"Process Management Methodology".

5. Conclusions

Based on this study, we concluded that the process management always seeks to improve and

optimize processes, reducing operating costs, making the company competitive and customer-

focused. Thus, it is closely linked to quality management, as their primary purpose is to

satisfy their customer’s requirements.

The contribution this paper is to demonstrate that by applying a structured methodology for

process management, the manager will get improvements in his organization and thus is being

adapted to confront this new business environment.

The competitors are not standing still and seek to overcome their oppositions every day and

the ones who are not customer focused will be subjected to lose a considerable market share.

However, the managers require a very intensive preparation and study on their own company

in order to manage their organization by processes. It is important to identify the processes

that are embedded in the organization, their importance and how they interact in the business

course of action.

During the study, people were identified as a key part in the process, because they must be

involved, committed and aware of their activities within the process. After all, they are

making the process happen.

As the various maps of the processes were arising, managers realized that a methodology for



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process management offered a powerful aid in carrying out their activities. It provides an

overview of their process and knowledge of their customers’ perception.

The "Process Management Methodology" proved to be an excellent tool for the management

and process improvements, however it generates a large amount of work for the process

management team. This can make people divert the focus of their professional everyday

duties. The managers can then create a resistance to have their staff available for working in

these teams.

The results obtained with the application of this methodology have brought benefits to the

area of Incoming Materials, which could better understand the customers’ perception and the

problems that were occurring, identifying their causes and looking for immediate solutions.

This methodology was efficient in the management by processes and can be used in

organizations of various sizes and industries.

This research is inconclusive. We suggest applying in other organizations and processes, for

the recognition of the "Process Management Methodology”.

References

CERVO, Amado L.; BERVIAN, Pedro A. Metodologia científica. 5. ed. São Paulo: Prentice Hall, 2002.

DAVENPORT, Thomas H. Reengenharia de processos. 4. ed. Rio de Janeiro: Campus, 1994.

DE SORDI, Jose Osvaldo. Gestão por processos. 2. ed. rev. São Paulo: Saraiva, 2008.

FNQ - Fundação Nacional da Qualidade. Critérios de Excelência, 2009.

GIL, Antonio Carlos. Métodos e técnicas de pesquisa social. São Paulo: Atlas, 1999.

GONÇALVES, José Ernesto Lima. As empresas são grandes coleções de processos. Revista de Administração

de Empresas. São Paulo, v.40, n.1, p.6-19, Jan./Mar. 2000a.

______. Processo, que processo. Revista de Administração de Empresas. São Paulo, v.40, n.4, p.8-19, Out./Dez.

2000b.

HAMMER, Michael; CHAMPY, James. Reengenharia: revolucionando a empresa em função dos clientes, da

concorrência e das grandes mudanças da gerencia. 11. ed. Rio de Janeiro: Campus, 1994.

JURAN, J. M. A qualidade desde o projeto: novos passos para o planejamento da qualidade em produtos e

serviço. 2. ed. São Paulo: Pioneira, 1992.

KRAJEWSKI, Lee. et al. Administração de produção e operações. 8. ed. São Paulo: Prentice Hall, 2009.

LOPES, Marco Aurélio B.; BEZERRA, Marlene J.S. Gestão de processos: fatores que influenciam o sucesso

na sua implantação. XXVIII Encontro Nacional de Engenharia de Produção, Outubro 2008.

MORORÓ, Bruno O. Modelagem sistêmica do processo de melhoria contínua de processos industriais

utilizando o método Seis Sigma e Redes de Petri. 2008. 175 p. Dissertação (Mestrado em Engenharia) – Escola

Politécnica da Universidade de São Paulo, São Paulo, 2008

MOTTA, Ricardo. A busca da competitividade nas empresas. Revista de Administração de Empresas. São

Paulo, v.35, n.1, p.12-16, Mar./Abr., 1995.

______. Gestão de processos. Apostila de treinamento realizado por MR Business Consultoria empresarial.

Curitiba, 2001.

OLIVEIRA, Djalma P. R. de. Administração de processos. 2. ed. São Paulo: Atlas, 2007.

PALADINI, Edson Pacheco. Gestão da qualidade no processo: a qualidade na produção de bens e serviços. São

Paulo: Atlas, 1995.

Documents

IMPROVEMENT TO THE PROCESS OF INCOMING MATERIALS · IMPROVEMENT TO THE PROCESS OF INCOMING MATERIALS ... e-commerce and global organizations. ... (CERVO & BERVIAN, 2002)