Setting the Stage for Business Process Improvement
Recently, many top managers have shifted their thinking regarding production. Rather than focusing on quality alone, they have improved their competitive edge by improving quality, increasing productivity, reducing costs, and increasing customer satisfaction. Businesses have discovered that the "best way to ensure external customer satisfaction is to satisfy every internal customer at each step pf the process.
Improving business processes varies from industry to industry. For example, manufacturing companies may want to concentrate on better technology while service companies may be more interested in efficiency.
Regardless of the industry, all companies can benefit from removing barriers that interrupt the flow of work and streamlining processes to reduce waste and lower costs. The best way to do this is through business process improvement (BPI), which is critical in cutting costs and improving competitive strategy.
According to Harrington, one of the most important aspects of implementing BPI is managerial support. When initiating BPI into a business, it is important that the mangers understand exactly what BPI is and how it will benefit the company. Harrington suggests forming an executive improvement team (EIT) to oversee the BPI process.
Primary duties of the EIT are to: communicate the need for BPI to the organization; release directives about the BPI; identify processes that need improvement; select business process owners; determine process improvement teams; evaluate qualification level upgrade requests; ensure that BPI is a priority; resolve conflicts not handled at lower levels; provide rewards and recognition to successful PIT members; and measure success.
EIT develops a model using a five-phase approach: organizing for improvement; understanding the process; streamlining; measurement and control; continuous improvement.
When the BPI plan is first initiated, a BPI champion should be appointed immediately to drive the activities. "The champion's job is to develop and customize the business process improvement to your business and sell the approach throughout the organization." Harrington suggests that a process hierarchy be created to describe all of the macroprocesses and subprocesses involved in the business.
The EIT should be educated about BPI so that it can effectively lead the implementation and train mangers and employees throughout the process. The EIT can be educated through workshops and frequent meetings. A thorough knowledge of BPI is crucial for the EIT, as they must spearhead the BPI effort, tackling important management issues and making most BPI decisions.
According to Harrington, once management support and leadership for BPI are in place, the EIT should develop a BPI model, which is a "detailed plan of the steps that will be undertaken as the organization goes through the BPI cycle."
If a good BPI plan is not created, a lot of time, money and effort will be wasted. Harrington suggests implementing no more than 20 critical business processes during the initial phase so that the organization does not over-commit itself.
Once the EIT has developed a plan and selected its crucial processes, it should develop a set of preliminary objectives to provide vision and direction to the PITs, which work on improving processes.
BPI significantly alters the way we approach our organization and the way we do business." Therefore, it requires clear and direct managerial communication to all employees. Harrington stresses that, when implementing BPI, companies must outline the goals of the process and the roles of the employees.
Basically, when setting the stage for BPI, companies must understand what they are doing and how they will do it. BPI plans must be well defined and evaluated, and employees must be given specific roles. By taking the time to set the stage right, companies will save a lot of time and money.
Organizing for Process Improvement
Organizing improvement activities is an important step of business process improvement (BPI), as most processes are complex and require organization. According to Harrington, "a team approach to business process improvement provides long-lasting results and minimizes implementation time."
When a process improvement team (PIT) is selected, the first thing that should happen is training. Process owners ideally should be trained in both their new roles and in BPI methods. When the training is complete, the process owner must prepare a PIT plan that will define the activities and time schedule from start to finish.
Basically, the business process owner's primary role is to define the beginning and end boundaries of the preliminary process. In addition, the process owners should make a bloc diagram of the entire process and describe who will be performing the key operations. This allows the process owner to view the whole process and pinpoint what its strengths and weaknesses are.
Next the process owners must update and expand the original operating plan developed by the EIT. Typically, at this stage of BPI, several items must be updated, including meeting times and lengths, employee resources, project end data, and anticipated changes to customer expectations.
Harrington points out that several teams are involved in BPI activities. Other than the EIT, BPI usually calls for a process improvement team (PIT), subprocess improvement team (sub-PIT), task team (TT) and Department improvement team (DIT).
Of these teams, the PITs and the sub-PITs are most commonly used. The PIT is the center of BPI. When setting up a PIT, companies should include representatives of each department involved to optimize results.
Once PIT members are organized, they should be well educated on the details of their assignment and trained to work as a team. In addition, PIT members should have specialized training to prepare for their specialized activities.
The Process Improvement Team should consist of from 4 to 12 members. More than 16 members reduce the effectiveness of the team. Every department involved in the process should have a PIT member.
Harrington stresses the importance of a clearly stated mission and scope in implementing a successful improvement effort. For process improvement activities, this involves understanding and defining:
BPI objectives provided by the EIT.
Preliminary process boundaries.
Final process boundaries.
When the PIT has a full understanding of process boundaries and a final block diagram of the process, it must work to understand:
Who the suppliers of the inputs to the process are.
Who the customers of the outputs of the process are.
What other processes it interacts with.
When all of this is accomplished, the PIT must determine what it should improve. Harrington discusses measuring the overall process "because at the start of the improvement process, you should not waste energy on details that may prove unnecessary once the process is streamlined."
When establishing measurements and targets for outputs from all activities, the numbers can be unrealistic. Therefore, Harrington says it is important to limit the requirements to a critical few for the total process."
According to Harrington, there are three major process requirements:
Effectiveness -- the extent to which the outputs of the process meet customer needs and expectations.
Efficiency -- the extent to which resources are minimized and waste is eliminated.
Adaptability -- Flexibility of the process to handle future changing customer expectations and special customer requests.
These measurements are important for one reason. "If you cannot measure it, you cannot control it. If you cannot control it, you cannot manage it. If you cannot manage it, you cannot improve it. It is as simple as that."
Harrington says that one of the biggest mistakes American organizations make is that they do not take the time required to develop an effective change plan, get the people affected to agree to the change. He recommends using the five P's: Proper Planning Prevents Poor Performance.
According to Harrington, organizing for process improvement is one of the most important parts of BPI, as it sets improvement goals for the entire process. Harrington recommends spending the time and effort required to do this step properly.
Understanding the Process Characteristics
According to Harrington, the more one understands business processes, the easier it is to improve them. To accomplish process improvements, it is important to undrsatnd several characteristics of business processes:
Flow -- methods for transferring input into output.
Effectiveness -- how well customer expectations are met.
Efficiency -- how well resources are used to produce an output.
Cycle time -- time taken for transferring from input to final output.
Cost -- expense of the entire process.
Understanding these processes allows companies to identify key problem areas within the process, providing the basics for streamlining the process. In addition, this understanding provides the necessary database for making improvement decisions. This understanding is also the basis for setting improvement targets and for evaluating results.
Harrington points out that while the process is described as a mix of procedures, techniques, flowcharts and equipment; it is actually the people involved that bring the process to life. The success of BPI activities is directly correlated with the efforts of people and the changes made to the process.
Understanding process characteristics is necessary because it helps identify key problem areas and the information obtained helps in the streamlining of the process; it provides the data for making informed decisions about…