Well designed processes are critical to customer satisfaction & cost efficiency. What are the ten steps that any business should take to improve its processes?
1. Catalogue processes
A Process is a sequence of activities which turn inputs (information or materials) into an outcome that someone else (the customer, a stakeholder, another part of the business) wants. It is one of the key components of every businesses Operating Model.
Before embarking on process improvement, it is vital to have a clear understanding of the range and scope of processes that the business is responsible for.
Processes should be catalogued in the form of a hierarchy or framework which lists out the processes but does not describe them in detail. For readability, processes should be grouped into categories (for example “Deliver Services” or “Manage Financial Resources”) and sub-categories (for example “Plan Resource Requirements” or “Invoice Customer”).
Creating a Process Catalogue from scratch is a significant undertaking and therefore it may be helpful to start by using a pre-defined catalogue for the relevant industry and adjusting it to suit the business’s needs. The American Productivity & Quality Centre (APQC) has published a number of these Process Frameworks which are free to download.
2. Identify process hotspots
No process is ever perfect, nor do the requirements of a process remain constant for long. However, when time and resources are limited it is important to focus improvement effort where the need is greatest.
The next step therefore is to prioritise the processes defined in the catalogue, based on Quality, Cost or Delivery data indicators. Such indicators may include:
High customer complaint volumes
High levels of rework or scrap
High resource requirements
Significant business or reputational risk
Low or negative margins
Long delivery lead times
Significant queues or backlogs
Processes that are worth improving should also be of strategic importance and offer potential competitive advantage.
3. Assign an owner
Each process should have someone within the business who is accountable for its design, operation and performance. Before embarking on any improvement, an owner must be identified who will act as a sponsor and approve any changes proposed.
4. Understand process demand and capability
Once a process has been prioritised, it is important to understand the volume and type of work going through it. There may be opportunities for improvement by eliminating unwanted or duplicate demands on the process.
This “failure demand” results from things like:
work being sent to people who lack the required skill to deal with it
mistakes made earlier in the process
ambiguous, inconsistent or no communication with customers
The inputs to the process should be analysed, failure demand identified, and its root causes eliminated. Such improvements can create capacity within an existing process and free up resources to focus on optimising its design.
It is also important to understand the processes current best repeatable performance so that a target for improvement can be established. The root causes of variation in performance should be analysed and eliminated so that performance achieves its capability more often.
5. Map the process
Before attempting to improve a process, it is vital to understand how it currently operates. The best way to do this is to draw the process as a series of steps, interconnections and decision points. Visualising the process as a map makes it easier to describe and is an accelerator for subsequent improvement.
The most practical way of mapping the process is to use a large space, post-it notes and a group of people who do the work today.
There are several good practices and potential pit-falls when mapping processes:
Use an independent and experienced facilitator to lead the mapping activity
Think about the process from the customers perspective – start with a customer outcome and work backwards.
Be clear about where the process begins and ends before mapping in detail
Include the steps that customers go through as well as those performed internally
Walk the process or follow a product or customer through it
Don’t be constrained by the internal organisational boundaries
Map what actually happens, not what is expected
Record both what is done (the task) and who does it (the actor)
Describe each step in the process as a Verb followed by a Noun – for example “Pay Invoice” or “Record Customers name”
Capture variations of how the process is performed – different individuals or teams may do the same thing but in different ways
But be aware of variants of the same process where the differences have arisen by accident rather than to accommodate different customer or supplier needs
Iterate and refine the map until everyone is happy that it describes reality
Photograph the result – don’t waste time drawing it neatly, because it’s about to change
6. Identify waste
Once the process has been mapped, the next step is to highlight opportunities for improvement. The best way to do this is to walk the process, highlight waste within the current flow and indicate this on the map.
Waste should be considered both from the company’s perspective (“production waste”)
Transportation: Moving work about
Inventory: Unfinished or stockpiled work
Motion: People making unnecessary movement
Waiting: People or work waiting for something to happen
Over-Production: Doing too much of something or before it is needed.
Over-Processing: Doing tasks that do not add value or to a higher standard than needed
Defects: Dealing with the results of failure
and from the customers perspective (“consumption waste”)
Delay: Customers made to wait
Duplication: Customers provide the same information more than once
Unnecessary Movement: Customers make unnecessary effort to receive the product or service
Unclear Communication: Customers seek clarification or forced into mistakes
Incorrect Inventory: Customers unable to get the exact product or service they require
Opportunity Lost: Squandering an opportunity to serve or delight a new or existing customer
Errors: The product or service not meeting the end user’s needs
7. Optimise the process
Attention can now turn to addressing the issues identified and designing the future state process. Typically, there are five ways in which the process can be improved to eliminate the wastes observed.
Simplify – make tasks more straightforward to reduce effort and time taken
Eliminate – remove tasks that are duplicated elsewhere in the process or which don’t add value
Combine – consolidate two or more variants of the same process to eliminate unnecessary variability, or combine separate tasks into one to eliminate waiting and queuing
Automate – turn manual tasks into electronic tasks that can be performed by a machine
Re-order – change the sequence of tasks so that work can be routed to the right place more quickly
Potential changes to the process should be discussed and agreed with the Sponsor and documented in the form of a Process Map.
8. Clarify responsibilities
Often a well-designed process can be complicated by a lack of clarity over who is responsible for each process step. It is good practice to record who is responsible (the “Actor”) alongside each activity (the “Task”).
This may be communicated using swim-lanes on a process map where tasks are grouped according to responsibility. Or if more detail is required a RACI (Responsible, Accountable, Communicated, Informed) matrix may be documented for each step in the process.
9. Test the change
It is vital that potential changes to the process are tested and validated before they are confirmed. The actions required to deliver potential changes should be captured and ownership for design, testing and implementation agreed.
Ideally the new process should be evaluated alongside the existing process and its performance compared, using one or more of the Quality, Cost or Delivery indicators which were used to identify the issue initially.
The outcome of the test may show that the change has improved the performance of the process, in which case the change should be confirmed.
However, some unintended consequences may be identified, or it is found that the change has not improved or even made performance worse. In such cases it is important that the change is re-visited and refined before proceeding further.
10. Create a standard
Once the changes have been tested and proven to be effective the new process should be documented and made available to those who do the work. This process map can be used as a
Communication tool to those who currently perform the process
Training aid for people unfamiliar with the process
Reference guide for those who do the work
Feedback tool for coaching and development
Finally, once a standard exists the sponsor should monitor process performance, confirm that the standard is being followed and periodically review the process to identify further improvements.
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