Processes

 

The primary way to ensure delivery of a consistent product or service to customers is to simplify and stabilise business processes, i.e. to reduce complexity and to keep the business focused on the needs of its customers.

 

Contents: Introduction Cost, quality, throughput Eliminating variation – six sigma Eliminating waste – lean process development Next steps-Analysis Pilot Roll out

Introduction

The purpose of the most successful business improvement plans is to add more value to the customer; that is, to deliver your product or service at a consistent and predetermined quality in the most cost-effective way.

 

It is widely accepted that the majority of quality problems are born in the process, not the people.

 

This view will not be disputed by anyone who has direct experience of working on the ‘front line’ where it can feel that working practices have been designed to fail – your own experiences may also support this.

 

The issue is perhaps that processes are rarely designed they are simply allowed to evolve unchallenged. This is perhaps why a great many business improvement programmes are built around process improvement.

 

Cost, Quality and Throughput

But where do we start with process improvement; should we first try to reduce costs, reduce inherent waste or increase process speed?

It is actually not possible to have an impact on any single apex of this triangle:

 

Making a process ‘lower cost’ means there must be a focus on eliminating wasteful process steps - fewer steps results in quicker throughputs and consequently fewer opportunities to make a mistake i.e higher quality.

 

 

 

 

Or put it another way:
• ‘Low quality’ processes generate errors; errors in themselves are costly and any rework required contributes to an increases in throughput.

And still another way:
• Slow processes - those that have a high throughput time - are prone to errors because the high process time is caused by waiting and when there are lots of queues there are lots of opportunities for mistakes. Note that the key to increasing process time is not increasing the transaction speed (i.e. the speed at which the process step is undertaken) but in eliminating waiting time.

 

Go to Download centre for a free downloadable memory jogger.

 

In summary, all process improvements activities will tend to impact on variation, cost and throughput and what is important is not being a ‘variation reduction expert’ (i.e six sigma black belt) or being a ‘waste reduction expert’ (i.e. lean specialist) but being a process thinker; allowing your first question to be ‘what is happening in the process’ not ‘who is to blame for this issue’.

 

There are several process improvement methodologies available and each consultancy is likely to repackage a standard approach and call it their own.

 

Some will focus on Eliminating Variation this is the basis and origins, of six sigma.

 

 

In processes that are repeated often, as in the manufacture of widgets, or the possessing of applications for mortgages, it is possible to collect a lot of data relatively quickly.

 

Once this is done we can quickly define an acceptable product target specification and measure how often we meet that specification. Anything that does not meet that specification is defined as a defect (i.e. waste).

 

Click here for problem solving techniques.   What is DMAIC? Click here

The trick of improvement methods that focus on variation is to use each defect as a clue to issues that need to be resolved in the process. In this way, processes are like whips in that the cause of the variation is often towards the front of the process (the handle of the whip) but the effect of this ‘root cause’ is best seen where the variations are largest and most keenly felt – at the end of the process.

 

Once a set of statistics has been captured it can then be evaluated and the root causes of the defects can be analysed.

Sigma is a term used to describe variation. Six sigma means that 99.99966% of outputs land within specification.

 

How these data sets are analysed and how that knowledge is then used to implement sustainable process improvements in the organisation are discussed in more detail in the process improvement ebook available in the download area. Please also review the free memory joggers.

 

Other improvements will focus on Eliminating Waste. Lean Process Development is such a methodology.

 

Consider a standard manufacturing process:

 

Transformation ->Inspection ->Storage ->Transportation

 

Only one of these activities adds value to the customer the rest are costs/opportunities for errors/time consuming steps. Remember to focus on what adds value to the customer.

 

As you would expect, the starting point of any world class Lean Process Development programme is an analysis of the existing methods of working.

 

In this analysis the consultant will attempt to identify the existence of excessive production resources such as:

For a more thorough explanation of a pre-project analysis go to the download centre.

 

Excess workforce

Excess facilities

Excess processing

Excess inventories

Excess downtime

Excess waiting time

Excess defects, rejects, re-cycle

 

The analyst will also attempt to uncover waste caused by over production i.e. inventories.

 

In an analysis prior to a Lean Process Development Programme the analyst will also focus on throughput and in doing so will evaluate the entire operation. The consultant will evaluate:
• transport times (moving materials or information);
• inspection steps (checking the quality of the product or service) and
• storage times (the period the product or data waits before the next value adding activity).

 

 

The analyst will pay attention to both the physical path that work travels and the process steps required. Being lean is about eliminating:
• Non-value adding process steps
• Wasteful or inefficient workflows

 

The chart on the right is an actual workflow in a world class manufacturer prior to an IMS business improvement programme.

 

For a more thorough explanation of a pre-project analysis go to the download centre.

 

Next Steps - Analysis

By now you will be a process thinker and your improvement efforts will be focussed on delighting your customers.

 

You will know that all improvements will positively impact on cost, throughput and quality but you will have decided to focus your initial efforts on either reducing variation or reducing waste.

 

By conducting an analysis you will have also:
• Identified an improvement opportunity
• Established aims, objectives and accountabilities
• Mapped the existing process
• Modelled the ‘to be process

 

The next step is implementation.

 

Click here for ebook – how to implement process improvements

Pilot

Test the analysis conclusions through running a pilot study. This has the added benefit of testing the chosen improvement methodology and also the organisation’s capacity for change.

 

Monitor progress of the pilot against plan and also look for unintended outcomes. Review progress with the process owner and their team, customers, suppliers and the project sponsor or steering team. Discuss what is working and what isn’t working. Document all the steps.

Roll Out

Share the pilot process learning with everyone in the organisation and invite teams to analyse all key processes that serve customer needs.

 

Standardise as far as possible and implement throughout the organisation.

 

Click here for ebook – How to Implement Process Improvements.

 

How do you ensure improvements are embedded and sustained? This is about Performance Management