AAOM Handbook

MP.00 Measure Process Performance Context

In the context of this task assignment the word process (in lower case letters) applies to any element of business structure defined in the Business Process Framework (the Company, Region, Operation, Process or Productive Unit). The Business Process Framework defines the purpose of a measure as 'to indicate when an intervention in a process may be required'. So the first question to answer is, when is an intervention required? Every justifiable process must contribute value to an enterprise - the precise manner in which it delivers value is defined by the Purpose of the process. Sustainable value is derived when a process can economically continue to deliver the required output. If sustainable value is not being delivered, then an intervention in the process is required. The above definition of a process Purpose leads to three measurable parameters;  Effectiveness - does the process deliver the output that is required in a period or by a time (quality product in/by time),  Efficiency - what is the output delivered compared to the resources used in producing it (e.g. recovery of product, unit cost of output, return on investment etc), and  Sustainability - is the process positioned to continue delivering the output into the future (does it have the resources, asset condition and licence to operate). Effectiveness, Efficiency and Sustainability are the three significant characteristics that indicate the achievement of the purpose of a process, and hence its viability. These should, wherever practicable, be measured. However, the measures of Effectiveness, Efficiency and Sustainability will vary at different levels of the enterprise, based on the audience for performance at the level, and the factors that can be controlled at each level. For example, the CEO of a company is held accountable to a set of measures that represent the Purpose of the company as seen by the external stakeholders. If the shareholder view is taken, then the purpose may be viewed as 'the delivery of sustainable dividends and share price growth that represent a high rate of return on the money invested'. One possible set of measures for this purpose are set out in row 1 of the table in Appendix 2 . The purpose of the Manager for a process may be defined as 'to sustainably deliver the agreed product volumes (and quality) over time, while efficiently using feed stock and cash'. One possible set of measures for this purpose are set out in row 4 of the table in Appendix 2 . Assigning accountability for process Purpose measures is only applicable at and above the process manager role. Those roles reporting to the process manager contribute to the Purpose of the process through their influence on the process operating in the right way and at the right time. Therefore, for those roles reporting to a process manager, the most appropriate measures of