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Process and Production/Manufacturing Process Analysis


Process analysis is important not only in operations or production management but also in managing and running a business. If managers and staff do not understand an organization or value adding process it is very difficult to both manage and run them to their most efficient level and attain a sustainable competitive advantage. Knowing a process well will give business owners and mangers a clear and precise idea of manufacturing costs, inventory costs, use of company assets, capacity utilization and the different processes currently in place to produce the outputs required. It can also provide an insight into cost saving and efficiency opportunities to reduce the overall cost base without any impact on product quality and customer satisfaction, and provide the data to set the operations strategy for the organization.

So what is a process one might ask? A process in this sense is referred to a series of steps in a supply chain or value stream which transform raw materials and inputs such as labour into finished goods in customer's hands. Any subset of this process can also be a stand alone process, depending on its nature and complexity. These can include service processes such as providing a hotel room for a night or a manufacturing process.

Process analysis can also set the base for which the process can be modelled under different or future circumstances in order to answer management questions on how will the processes react, handle or the cost base change under the new conditions.

Process analysis consists of several steps and can be achieved with the use of different tools and concepts.

Process Analysis steps

Understand the process - This usually is the first step in order to be able to understand what are the inputs, outputs, steps and tasks that comprise the productive process. Visual inspection and observation will always provide a better understanding than theory or a process diagram alone.

Collect data - Observation, production data collection, customer surveys, sales and marketing information can contain useful data in analysing a process.

Process/analyse data - This is the biggest and an important step in process analysis, this can be done in a variety of ways depending on the data available, complexity of the process and resources available to perform the analysis.

Common process analysis tools

Some common process analysis tools include:
-Process flow charts
-Pareto charts
-Analysis of performance metrics and benchmarking
-5 why and fishbone diagrams regarding process issues
-Spreadsheet modelling
-Production planning models
-Capacity utilization and plant loading modelling

Always keep in mind that the objective of process analysis is to identify performance/needs gaps between the current operation and what the customer requires. Process analysis also helps understand the value adding supply chain or specific components of such to identify what steps or tasks are holding back the process, impacting customer satisfaction/experience or hurting the business operationally and financially.


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