What is Business Process Improvement? Is it a necessary cost of business or is it just a hype?
Business Process Improvement will identify all forms of waste in critical business areas. These include time, resources and inefficient production cycles which create cost losses and reduce profit margins. The concept requires creating solutions to make the business more efficient, reduce costs, and ultimately create a customer experience that will consistently attract and retain your customers.
Ideally a business that desires to grow must be constantly evaluating their business processes and improving them instead of waiting to address problems as they occur. Unfortunately, many businesses wait until they begin to experience pain points and bottlenecks BEFORE they think about process improvement. Even then, many process improvement myths sometimes hold them back from addressing issues in a timely manner.
Understanding Process Improvement
For most business owners like you, customer satisfaction is a key driver of your business processes. Improving a business process means improving “the way things are done”. This is to make activities faster, cheaper and more flexible. This will ensure that your business complies with best practice standards, improve quality, and the user experience for customers and end-users.
There are many ways by which you can reduce process cycle time or cut costs. These are generally based on changing the sequence and duration of your business activities, or the number of required resources to improve performance while still meeting the goals of the business.
Process improvement are called by different terms – e.g. business process management (BPM), business process improvement (BPI), business process re-engineering, and continual improvement process (CIP). However, the common goal of each remains the same which is to minimize errors, reduce waste, increase efficiency and improve productivity.
Business Process Improvement – Why Care?
Your business only has two choices. Firstly, allow itself to be weighed down by inefficiency and over time, breed processes that cannot sustain the demands of customers and cause them to shift to your competitors. No business can continue to survive without its customers.
Secondly, the choice is to conduct continuous evaluation and improvement of your processes. This will lead to increased efficiency, performance, and overall success.
Equipment Down Time
What is the cost of equipment down time in any industry? While large corporations are able to buffer losses they incur better because of the revenue most of them bring in, smaller businesses typically don’t fare as well!
Equipment down time result in a drain on resources. These include lost man hours while specialized operators wait for replacements, not meeting monthly sales targets, and creating frustrated employees who either quit or move on to greener pastures. In addition, high employee turnover will affect your bottom line. Add up all the costs, and as you can see, NOT improving the processes associated with these activities WILL affect your revenue generation efforts.
Every business can benefit from improvement whether it is tweaking a process, streamlining, and mapping, overcoming bottlenecks, re-structuring or downsizing, compliance related activities, or, introduction of new software or automation.
Business Process Improvement Methods
The following sections may appear to be too technical for some business owners who are more interested in outcomes than the “nuts and bolts,” However, some other business owners have told us that they would like some limited understanding of how these methods work. This is why we have a summary of the common methods presented here.
Many tools may be used to identify and address process related issues requiring improvement in a business. For many business owners like yourself, they can be overwhelming. However, BCINC Canada has the necessary expertise to guide you to implement.
Each listed method is suitable for a specific kind of need. These fall under 3 broad groups – Continuous Improvement and Lean, Customer Focused, and Process Mapping.
Continuous Improvement Methods
Cause and Effect analysis: Uses a diagram method to identify the problem and roadblocks to why the process is not working.
SIPOC analysis: Before starting a process improvement you use this technique to identify and define your requirements. The analysis is conducted during the “measure” stage of DMAIC or DMADV.
Kaizen: Kaizen promotes continuous improvement habits. It focuses on improving quality, productivity and efficiency through small shifts in daily work or corporate culture. The intention is to create a work environment that does not punish errors or mistakes, but focuses on preventing them from happening again.
5S: The 5S model stands for five steps to create efficiency – Sort, Straighten, Shine, Standardize and Sustain.
PDCA: Helps improve the efficiency of businesses when identifying processes that need improvement. It stands for Planning (identify the problem), Do (develop and implement a solution), Check (evaluate and review output data), and Act (document and implement the plan).
Six Sigma: This method focuses on eliminating waste. Firstly, it employs two ways of improving processes – DMAIC and DMADV. Secondly, it addresses waste elimination through specific steps. The steps are Define, Measure, Analyze, Improve and Control (DMAIC) and Define, Measure, Analyze, Design, and Verify (DMADV).
Total Quality Management (TQM): This method is focused on cultivating long-term success through customer satisfaction by engaging the entire company with continuous process improvement. TQM empowers workers by promoting a culture where employees are driven by a shared business goal and are not afraid to make mistakes.
Not Attracting or Retaining Customers
Why is your business not attracting or retaining customers? What are the processes you have in place to attract customers in the first place? After you finally get their business, what processes do you put in place to retain them so that your business becomes the Supplier of Choice? How do you analyze the “Customer Experience”? Why SHOULD the customer choose your business over the competition? What is the cost of losing their business?
Properly executed processes will address these questions. Let BCINC Canada show you how….
Process mapping: This is a workflow diagram that helps businesses to map out and plan for process improvement. Furthermore, it is called by other terms – process model, process flowchart, process chart or map. Besides, several process improvement methods require development of process maps.
Value stream mapping (VSM): VSM helps to visually represent the customer’s perception of a business process, and uses this to identify the value of a product, process, or service to the business. It focuses on eliminating waste and redundancy.
Kanban: Kanban is a tool for process workflow visualization that engages all human resources of a business – departments, leadership, and employees in process improvement. It is a method that incorporates lean process improvement.
Improvement and Information Systems
An important component of any business is its information management system. This is more than just document and data management. It should manage digital technologies used by the company, or software control and tracking could get out of control very quickly. In addition, the information system simplifies data processing and organizational or financial statistics.
As a business owner, you have probably experienced data problems caused by lack of accuracy and reliability. This frequently slows your workflows. Like many other businesses, you work hard to reduce human errors and increase efficiency with some level of success. As a result, information management plays a critical role in these processes.
What are the Benefits of Information Systems?
- Well organized data: Data is readily available and easily accessed by all. It improves productivity of your business.
- Storage of information: A good information system stores documents and records in a comprehensive database that is accessible and has easy retrieval and document version control
- Provides business trends and reporting: If you incorporate an effective information system, regular updates can be generated on business trends. This will help in decision making as you prioritize which business activities require resources.
Business process improvements are beneficial to any business and key to organizational success. Identifying the specific type of process improvement for a business is the first step towards increasing efficiency and improving performance.
What are your process related challenges that appear to be holding your business from achieving its’ full potential? Come and have a chat with us about them.
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