Jeremy Klingel
What is Process Improvement and Why is it Important?
By definition, "process improvement" means to make things better. It's not about fighting fires or managing crises as they come up. It is about setting aside the common practice of assigning blame for problems or failures and looking for better methods to react to dynamic market conditions. When we take a typical problem-solving approach that simply addresses the symptoms, we may never discover or understand the root cause of the problem. Not to mention that while we try to "fix" things, we may actually make the entire situation worse.
In some cases, the issue may not be that a system is broken, but rather that the organic growth of customer demand in the marketplace requires the development of new systems and procedures. "Bolt-on" solutions can assist in bridging the gap to new technologies, but these bandages cannot sustain the long-term rigor associated with large-scale mergers or acquisitions. In this case, an organization can only actualize its untapped potential and optimize its response time by revamping the operating system. When we engage in true process improvement, we seek to learn what affects the inner workings of a process and then use this knowledge to:
- Reduce variation;
- Remove activities that don't contribute value to the product or service provided; and,
- Improve customer satisfaction.
To achieve these objectives, we examine all factors affecting the process: materials, methods and machines used to transform materials into a product or service, and the people who perform the work. This is especially true in today's dynamic business environment, where it is a necessity to remain nimble and fluid. Yesterday's best practices may not be today's best solutions. Hence continuous process enhancement is a valuable addition to any management operating system, no matter how established or robust.
How Does Process Improvement Benefit the Organization?
A standardized process improvement methodology allows us to look at how we perform work. When all of the major players are involved in process improvement, they can collectively focus on eliminating waste—of money, people, materials, time and opportunities. The ideal outcome is that jobs can be done faster, easier, more efficiently and less expensively. The use of total quality tools and methods reinforces teamwork. Furthermore, using team members' collective knowledge, experiences, and efforts is a powerful approach to improving processes. Through teamwork, the whole becomes greater than the sum of its parts.
How Does an Organization Get Started on Process Improvement?
An essential first step in beginning process improvement is for senior leadership to make it mission critical. Leaders need to foster an organizational environment in which process improvement can thrive. For the organization to reach this state, leaders must ensure that everyone receives training that enables them to carry out process improvement efforts effectively.
Instilling a process improvement mentality in an organization can be difficult because it requires a different way of thinking than we are accustomed. It requires everyone to become a "fire preventer," not a "fire fighter." The organization must focus on improving a process over the long term, not just patching procedures and work routines as problems arise. Leaders focused on fighting fires need to set aside the extinguisher and start asking the right questions:
- Which processes are in need of improvement?
- What resources are required for the improvement effort?
- Who are the right people to improve the selected process?
- What is the best way to learn about the process?
- How do we go about improving the process?
- How can we institutionalize the improved process?
What is Exervio's Process Improvement Methodology?
The Exervio Process Improvement Methodology is comprised of four phases. At a high-level, the Initiate and Implement phases bookend the entire process, allowing for appropriate project set-up and implementation to occur. The heavy-lifting process improvement components fall within the Assess and Design phases. Here, the current state is documented and analyzed for improvement potential, and the future state is designed. Using all four phases will increase an organization's process knowledge, broaden its decision-making options, and enhance the likelihood of satisfactory long-term results.
When Does an Organization Start a Process Improvement Initiative?
While we have answered the questions of "why" and "how" to initiate process improvement within an organization, we have not addressed the critical question of "when." In short, the best time to begin a process improvement initiative is now. Given today's downturned economy and unpredictable market it is wise to continually look for ways to right-size an organization through reduction of waste, throughput maximization, proper alignment of resources, proactive demand planning, and even the dynamic downsizing of operations (provided it does not cripple a company's ability to ramp up production given a return of demand to normal levels).
While it is true that there are costs associated with many process improvement undertakings, a dollar spent today can result in exponential returns year after year. It is for this reason that organizations must choose its consulting partner carefully. Joint commitment to strive for a cash neutral engagement within a predefined timeframe is one way to monitor cost versus gained benefit. A value-based arrangement may be another feasible approach to mitigating risk to virtually zero unless quantifiable gains result from the improvement effort.
In summary, inactivity and complacency are a cost businesses cannot afford. Every day managers continue to conduct business under the guise of status quo is an unnecessary debit to the bottom line and a step closer to nonperformance.
About the Author
Jeremy Klingel is a manager in the Process Excellence practice of Exervio Management Consulting, specializing
in process optimization, enterprise re-engineering and organizational transformation.
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