Source: Image of Firm Process Map created by Kate Eskra
Hi. Welcome to Economics. This is Kate. This tutorial is a case study on firm process mapping. As always, my key terms are in red and my examples are in green.
In this tutorial, we'll talk about what process mapping is and how it can be used to show a firm process. I'll show you the symbols that are used in process mapping and explain what they mean, and there are ovals, boxes or rectangles, diamonds, and circles.
So a "process map" is a workflow diagram developed to document activities across a process. Since we're talking about processes, what is a "process"? It's just simply a series of steps that we go through in order to complete a task or to achieve some specific purpose. How do things get done basically is what this is all about. And our daily lives involve a lot of processing, either at work or as a consumer. In this tutorial, we're talking about firm processes.
So what we do when we process map is we take some process, we break it down, and then we show it pictorially, and then that pictorial diagram is a process map. To begin the process, what we do is we write a narrative of the process and all of the steps involved. As soon as you have that, you turn those steps into a pictorial diagram using symbols.
And the symbols look like this. The first symbol here is an oval. This shows usually the start and the finish. So an oval can show the inputs that kicks off the process-- that begins it-- and then, at the end, the outputs are the end results.
Then we have boxes or rectangles, and these show each task or specific activity performed along the process. Even though multiple arrows can sometimes come into a box, generally only one arrow is going to leave each box here. Then we have diamonds. A diamond is where there's some decision required. Usually, this is going to be in the form of a "yes" or a "no" question. And then a circle with either a letter a number can be used to show a break in the process map.
So here's my process map. My husband's been selling baseball cards on eBay. So in some way, he has kind of a firm right now. This is his little business that he's doing to generate some extra income. So what I have here is the beginning of the process. He has baseball cards that are ready to post on eBay.
Actually, we don't have an activity first. We have a question. He has to decide, when he's posting his cards on eBay, should he put them in as auction, buy it now, or best offer? So I said, typically, this is a "yes" or "no" question, but here you can see there are three choices.
In all three cases, he's just posting it on eBay. So there is not a different way branching off of each question, but he just has to decide whether to post it as auction, buy it now, or best offer. Once he makes that decision, he puts it on eBay and the order is received.
Once his order is received, he has to see whether the customer is going to pay either PayPal or by a check. So if they pay by a check, now a question comes up-- did he receive the check? Because he has to wait in order to receive payment in order to sell it, obviously, or release the card.
If he does receive the check, then the card gets packaged. He figures out the insurance and delivery confirmation at the post office, and then he sends out an invoice or a receipt and ships the card. These are all the steps in the process to end at our end result-- with the card being shipped.
If he doesn't receive the check in the mail, then the order is canceled and he reposts the card. If it's PayPal, the process just continues here as if he had received the check. So all of these boxes, remember, are tasks in the process.
The diamonds are where there was a question that needed to be answered. And then the ovals here represent the end. It ends in either the order being canceled or the card being shipped and then the order is finished.
So why process map? Well, for companies, it's going to help them break down exactly how things get done, and it will give a better understanding of the process. It can help to illustrate areas that need improvement. There are so many processes that are really complex, and it helps to evaluate them holistically. When you see it visually and when you have to write it out in that narrative and then illustrate it this way, you can really see what areas might actually need improvement.
It's used in many different applications. Although today, most processes are not documented.
So it's a relatively new process, but it's really dynamic. And so like I said, it can be used in any area where there's continuous improvement wanted. It's used in holistic evaluations, and it's used for efficiency evaluations. It's so obvious when there is a hole in the way that something is being done when you see it like this. And it's especially being used in holistic operational assessments of efficiency and in developing and analyzing solutions that are sustainable.
So in this tutorial, we talked about process mapping is a pictorial representation of tasks that make up a process. I showed you the symbols used in process mapping, and we talked about why process mapping is useful and how it can be used to show a firm process. Thanks so much for listening. Have a great day.
Terms to Know
A workflow diagram developed to document activities across a process.