Process Improvement

Process Improvement

Process Improvement Jonathan Poland

Process improvement is a systematic approach to identifying and implementing changes to processes within an organization in order to improve efficiency, effectiveness, and overall performance. This type of improvement can be applied to a wide range of processes, including business processes, manufacturing processes, and administrative processes.

There are several different methods and tools that can be used to identify opportunities for process improvement. These include process mapping, which involves creating a visual representation of a process in order to identify inefficiencies and areas for improvement; process analysis, which involves gathering and analyzing data in order to identify potential improvements; and benchmarking, which involves comparing the performance of an organization’s processes to those of other organizations in order to identify best practices.

Once potential areas for improvement have been identified, the next step is to develop and implement a plan to make those improvements. This can involve a range of activities, such as streamlining processes, introducing new technology or automation, and implementing new policies and procedures.

One of the key benefits of process improvement is that it can help organizations to increase efficiency and productivity. By identifying and eliminating inefficiencies and bottlenecks, organizations can reduce the amount of time and resources required to complete tasks, which can lead to cost savings and improved performance.

In addition to increasing efficiency, process improvement can also help organizations to improve the quality of their products and services. By implementing changes that reduce errors and improve consistency, organizations can deliver higher-quality products and services to their customers.

Overall, process improvement is an important strategy for organizations that want to increase efficiency, improve performance, and deliver higher-quality products and services. By systematically identifying and implementing changes to their processes, organizations can achieve significant improvements in their operations. Here are some examples.

Waste

Process improvement eliminates waste. This can include wasted time, effort, movement, energy and materials. For example, a carpenter who puts the nails they need in a belt so that they don’t have to reach or search for the parts they need.

Addition

Adding to a process such as a carpenter who begins to inspect delivered wood for defects before accepting it.

Subtraction

Removing from a process. For example, a bank that removes 3 questions from a mortgage application that don’t correlate to any meaningful differences in risk or compliance.

Design

Adding design steps to a process such as a construction company that models a renovation in a simulator before ever building anything.

Planning

Adding or removing planning steps within a process. For example, a sales team that removes the requirement that sales people develop a plan for each account because they always produce low quality work that doesn’t impact revenue.

Priorities

Structuring the priorities of your process. For example, a manufacturing line where every employee knows that safety is the priority such that stopping the line for a perceived safety issue is always the right thing to do.

Ownership

Structuring authority to make your process more efficient. For example, a restaurant where all staff have the authority to action customer complaints in a reasonable way such as a refund for a menu item.

Tools

Changing the tools used in a process. For example, a designer who massively improves their design process by switching from a difficult to use operating system.

Synchronous Steps

Doing work at the same time. For example, a bank that has 4 week project planning cycles that run at the same time as 4 week project implementation cycles such that they plan for the next change while the current change is implemented.

Asynchronous Steps

Doing one thing at a time. For example, a construction company that completes foundation work before beginning framing.

Bottlenecks

Identifying steps or resources that are slowing down your process. For example, a government process that takes 1 day to process an application and 17 days to get official sign off on the processing.

Right Time, Right Place

Getting the resources that you need such as labor and machines together at the right time and place. For example, a call center application that automatically shows a summary of a customer’s account and recent transactions to the agent serving the customer.

Pull Processes

Allowing demand to pull supply in order to avoid waste. For example, a car manufacturer that doesn’t manufacture your car until you order it.

Last Responsible Moment

Last responsible moment removes the inefficiency of being too proactive by delaying things until they really need to be done. For example, an ecommerce company that delays fulfilling an order for 5 minutes after it is placed because a fraction of customers instantly regret their order and cancel within a few minutes.

Automation

Automating manual steps such as a house builder that automatically produces a basic architectural design from a set of customer requirements.

Toil Elimination

Toil is work that people find unpleasant. This is a natural target for automation or outsourcing. For example, a order fulfillment center that automates physically repetitive order picking tasks.

Continuous Improvement

A particular approach to process improvement that calls for incremental change over transformational change. This can be quite conservative and is inappropriate for processes that are severely broken. However, continuous improvement works where you are already somewhat efficient.

Process Reengineering

Process reengineering is an alternative to continuous improvement that seeks to transform a process as opposed to slowly improving it. For example, an ecommerce company that builds a completely automated order fulfillment process from the ground up without reference to the existing manual process.

Process Analysis

Process analysis is the practice of documenting a current business process. This can be surprisingly difficult as it is common for different stakeholders to communicate completely inconsistent understandings of the same process.

Gap Analysis

Gap analysis is the process of identifying where a current process fails to meet requirements or where the current process is simply irrational and inefficient.

Root Cause Analysis

Root cause is the true source of a problem where their may be hundreds of symptoms that look like causes but aren’t. For example, poor customer service that isn’t caused by employees or training but rather an inefficient software tool that adds stress to every customer interaction.

Bottom-up Improvement

A process that allows ideas from anywhere to flow into your process improvement efforts. For example, an airline that changes its check in process based on a suggestion from a passenger.

Restructuring

Changing an organization in order to make a process more efficient. For example, a bank that changes its IT department so that the developers who write code are always fully responsible for supporting that same code in production in order to eliminate political inefficiencies between development teams and operations teams.

Management Accounting

Management accounting is the process of measuring processes. This is required for process improvement as you can only confirm a process improved if you can measure it.

Process Optimization

The process of measuring a process, changing it and measuring again. This is essentially a series of experiments.

Optimization Myopia

The practice of becoming blinded by optimization whereby you miss the big picture. For example, a firm that become so obsessed with reducing costs on a production line that they end up sacrificing quality resulting in severe revenue decline and loss of brand value.

Be Careful What You Measure

Be careful what you measure is the observation that optimization often works very well such that intended consequences can result. For example, a process that optimizes for cost that ends up decreasing employee work satisfaction such that turnover increases 10x.

Systems Thinking

Systems thinking is the opposite of optimization whereby you try to consider the total impact of a change to processes. For example, an airline maintenance process that uses mise en place strategies to try to reduce latent human error.

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