| Written by Mark Buzinkay
What is process improvement
Process improvement is the systematic reevaluation and redesign of business processes to achieve progress in performance. Process improvement goals are reducing costs, expanding revenue, and lowering time. Business managers use process improvement to accomplish these goals. Process improvement involves the identification of opportunities for improvement, the implementation of improvements, and the measurement of results.
what are the 5 steps for process improvement?
There are five steps to implementing process improvement:
- Define the problem or opportunity
- Collect data
- Analyse the data
- Identify potential solutions and implement them
- Control and evaluate changes
These steps will help you systematically examine your company's processes and identify opportunities for advancement.
Step 1: Define the problem or opportunity
The first step for process improvement is to pinpoint the problem you are trying to solve - describe the process opportunity from a business and customer viewpoint. This will help you focus your measures and ensure that you are making modifications that will positively impact you.
Pick the process: The first step is recognising a problem like all issues. But first, decide what process you want to improve first. For example, do you want to:
- Improve delivery times
- Reduce billing cycles
- Make production more efficient
Outline the process: Try to create an illustrated description of the process by using flow charts or similar. Different types of flowcharts can be utilised for BPI, but the gist is that they contain a sequence of events broken down into each task. For example, a swim lane diagram is a flowchart with additional information on who does what at each step along the process. It adds the aspect of accountability into a process summary.
Overall, it is fair to say that the first step is the most important one. Not only to lay out the path to improvement, but it is also the step with the highest value in terms of learning. Understanding a process requires knowing what the process is. Identifying the steps, the triggers, the results, and the variety of outputs is a hidden treasure to your understanding. However, identifying process steps is not free: It requires your time, effort, and curiosity. It also demands cooperation from your co-workers, who have to share their knowledge with you.
Step 2: Gather data
Once the problem has been identified, gathering data about the current process is essential. This data assesses the current situation and identifies areas for improvement. You have to specify crucial measures, baseline processes, and operational performance to quantify opportunities for progress and tell if your process improvement strategies are working. There are different types of measurement, but here are the most common things to consider:
Effectiveness: This indicates how well the process is functioning regarding quality. Data and reports, such as customer feedback and complaints, help assess this.
Efficiency: This is a benchmark of the time it takes to finish a cycle or task and the amount of input it takes to create one unit of output.
Learn more about asset tracking RFID software.
In theory, this sounds straightforward. In practice, it is not. Data gathering is an art at best and a pain at worst. In my opinion, collecting data is a very pragmatic issue. It doesn't make sense to try to collect data that is irrelevant, hard to access, laborious to get and too small to serve as a sample. In our daily work, we find ourselves confronted with these types of data quality. "Less is more" applies here in the sense of focusing on one or two performance indicators instead of 5 or 10 to reduce the effort and not to lose the eye for what matters. Try to find KPIs with data sources that are reliable and accessible, update often and promise quick evaluation cycles.
Step 3: Analyse data
Once you have gathered data about the existing process, it is time to examine it to determine bottlenecks and inefficiencies. Analyse process performance to comprehend pain points and specify/validate root causes. To be able to do the best analysis, you need to have the most accurate and precise data.
It is critical to formulate results based on data. However, having the measurements is only as valuable as the company's capacity to interpret them. The ultimate objective is to provide actionable insights to push process improvement (learn more about asset tracking with RFID).
One good way to start is to locate the inefficiency. Then, after you've outlined the process, you can ask questions or make observations to define which part is inefficient and needs modification.
Here are some methods to assess inefficiency (besides Six Sigma, TQM, PDCA and others):
Ask your team: One of the easiest and most "efficient" ways to pinpoint inefficiencies within your business is to ask your colleagues. Most of the time, people know precisely which processes are weak and what effect they are having.
Cause and Effect Analysis: A problem-solving approach where you can sketch the likely causes of a problem. We suggest the following: Begin by writing the issue on the left side of the paper. Next, sketch a straight line to the right side of the document and draw several diagonal lines extending above and below the horizontal line with all potential causes of the issue. From these diagonal lines of potential causes, draw small horizontal lines with all the possible causes of the problem related to each factor.
The 5 Whys: This approach is best used for simple or moderately complex problems as you assemble a fit team to analyse an issue. The method is straightforward: You drill down to its root cause when a problem occurs by asking "Why?" five times. Then, when a countermeasure becomes apparent, you follow it through to prevent the issue from recurring.
Root Cause Analysis: A problem-solving approach that wants to find the reasons for problems to prevent them rather than solve them when they happen. It works by defining the problem, gathering information and data, and identifying ways to eradicate the issue's root causes.
Step 4: Identify potential solutions and implement them
Once you have identified the areas that require modification, you will need to develop a schedule for making the necessary changes. This plan should be carefully crafted to avoid operational disruptions and ensure that the modifications are introduced smoothly. The final stage is to put the plan into action. This may affect training employees on new processes, changing existing systems, or enforcing new technology.
Develop solutions to address issues/opportunities and implement the changes. Here's how to do this in an orderly approach:
Invite Your Teams: Assemble the teams related to the task at hand, holding sessions to identify solutions. If you aim to make extensive changes affecting more than one team, you must consider creating a process improvement project team.
Redesign the Steps: Once you know where issues reside, you collaborate as a team to redesign the process by acquiring feedback from your team and narrowing down the list of the best fixes to implement. Again, there are types of analysis that work best to move forward:
- Impact Analysis: Outline a negative occurrence's qualitative and quantitative effects on your business to define its impact.
- Risk Analysis: Identifying and analysing issues that can affect the business to mitigate or avoid them.
- Customer Experience Mapping: Create a visual representation of a customer's steps to achieve your business goal.
Locate Resources: To make the change happen, be aware of the resources (humans and tools) that are needed to make this change. By outlining the expenses associated and the necessary ingredients for change, you can get buy-in from stakeholders by preparing a business case. It is critical to have everyone on board, so you'll want to incorporate the group responsible for implementing the change to ensure they understand the goal of the process improvement.
Overlook Roll-Out: Now, it's time to execute the new process involving your entire organisation on board. To manage roll-out effectively, establish clear communication lines and leave adequate testing and feedback time.
Learn more about RTLS tracking.
Step 5: Control and evaluate changes
Once a process has been modified with the intention of progress, it's necessary to reevaluate it to ensure it's working as expected. By communicating with team members and comparing reports to measurable benchmarks, the data will help to show the change's effects. As business changes, you'll have to set continuous check-ins and training so formal processes can be introduced as desired.
How to measure the steps for process improvement?
There are several ways to measure the success of process improvement:
- Cost savings: Track the cost savings achieved through process improvement by reducing waste (Muda).
- Revenue growth: Track the revenue growth achieved through process improvement.
- Time savings: Track the time saved through process improvement.
- Customer satisfaction: Track customer satisfaction levels before and after the implementation of process improvements.
- Employee satisfaction: Track employee satisfaction levels before and after the introduction of process improvements.
Here are some tips for sustaining process improvement over time:
- Make it part of your company culture: Process improvement should be part of your company culture, not just something done on an ad hoc basis.
- Make it a team effort: Involve employees from all levels of the organisation in process improvement initiatives.
- Encourage creativity: Encourage employees to be creative in finding ways to improve processes.
- Be prepared to change: Be ready to change processes as needed to keep them effective.
- Monitor results: Monitor the effects of process improvements and make changes as needed.
- Celebrate successes: Celebrate the achievements of process improvements to encourage employees to continue their efforts.
Rolling out a new process can be cumbersome and requires a lot of energy from different people within an organisation (see how a barcode scanning system can make things better and worse). However, once you have done it, you can move forward by implementing continuous improvement as you started. Whether you choose to improve the same process that you have already edited or expand to different areas within the business, process improvement technically has no limits.
Using data to measure outcomes and track progress, you can see what works best and doesn't. Having the help and feedback of your team and software that can provide valuable insights makes the process easier to enhance. While the adage may say, "If it ain't broke, don't fix it," businesses must be willing to push the boundaries and test their own way of doing things to remain competitive and continue improving.
Since all processes are different, be sure to take time when implementing process improvement and to roll out a continuous improvement. Leverage your resources wisely and devise plans to share use cases to quantify how your efforts usher in positive ROI.
Interested in automated manufacturing?
Takeaway
There's no one-size-fits-all answer to implementing process improvement, but there are some best practices that can help ensure success. First and foremost, process improvement should be part of your company culture, not just something done on an ad hoc basis. Involving employees from all levels of the organisation in process improvement initiatives is also crucial. Finally, we must be prepared to change processes as needed to keep them effective.
Measuring the success of process improvement can also take time and effort. There are several ways to measure success, including cost savings, revenue growth, time savings, customer satisfaction, and employee satisfaction. The best way to measure success will vary depending on the organisation and the specific goals of the process improvement initiative.
Extended reading: Real-time locating system and industry 4.0
Sources:
-
J. Jeston (2022): Business Process Management: Practical Guidelines to Successful Implementations
Note: This article was updated on the 24th of April 2024.
