Motorola, GE, 3M: all part of an elite that is known for manufacturing success and whose models have been internalised in industrial sectors across the world.
Most of us will recognise the Lean principles pioneered by these giants of industry. Yet having the resources to understand and implement lean process improvement at this level is not “reality” for most businesses. In fact, reality for most of us is a number of loosely linked processes used across the organisation supported by a variety of owners and systems.
Fortunately, there are a number of lean principles that are easy to get to grips with. Complemented by the right tools, technology and mindset, businesses like yours can deliver sustained and effective process improvement. Let’s look at the 8 principles behind highly efficient businesses.
1. Systematic process review
Before we dive into tactical process improvement, we need to understand what our process looks like. We do this by dividing it into stages (typical processes fall between 5-8). Using software, we can create these “tracking statuses” and review where processes intersect and spot any common patterns.
The next step is to review each stage to remove elements that don’t create value e.g. waiting for authorisation, duplicate data entry, use of hard copies, etc. It is also possible to see those ‘defects’ that derail our processes and to put a process in place to manage exceptions (more in the next step).
The benefits of staging our processes in this way allows us to:
- Eliminate non value adding activities
- Cut process cycle time
- Reduce process execution time
…all of which add up to increased efficiency – and happier customers.
2. Removal of defects
With the phased approach, we can employ lean principles to improve the quality of a process by removing exceptions (“defects.”) Defects are the source of poor process outcomes – in fact, it is estimated that 60% of time is spent handling just 10% of cases. Efficient businesses take action to reduce defects as close to source as possible. This in turn reduces variations in the process and results in a subsequent reduction in cycle time.
Some defects are relatively simple to spot – and fix. For example, an email address that contains errors. Validation fields can be added into the ordering software to ensure data integrity from that point on. Other exceptions are more complex and often occur when existing systems are unable to capture new information without extensive code-writing and delays. For example, even adding a notes fields may require a code-change in the software which can lead to operatives taking data offline. This subsequently reduces visibility, accuracy and data completeness – all of which cause processes to derail.
Efficient businesses have systems in place to formalise data capture within the core process (and on occasions, create a sub process to go with it). Using flexible software allows the end user to quickly adapt the system to accommodate exceptions and bring them back into the process quickly. This both improves cycle time and quality.
3. Effective skill utilisation
In most cases, linear “cradle to grave” processes are the antithesis of efficiency. Because one person is involved in delivering the process, it follows that you must automatically allocate the responsibility to the member of staff with the highest level of skill (read: salary).
In today’s fast moving world, this means that the highly paid staff member can find themselves handling many process transactions that could in fact be managed by more junior employees.
The ability to break the process into key stages (as we did to spot exceptions, above) has the added benefit of enabling businesses to allocate the less complex tasks across a whole range of skill sets. You can also undertake quality checks at each stage to double your defect-detecting efforts.
4. Linear to Parallel
In every stage of your process, there is bound to be more than one person capable of carrying out that activity. Yet in many businesses, this falls to an individual – lengthening processes unnecessarily. For example, in a purchase request scenario, the process may come to a complete halt if that person is off sick or in a meeting. Efficient businesses therefore allocate tasks to roles. If that person isn’t available, then it will be allocated to someone with the same level of authority. Using software, we may implement this “smart” task allocation very effectively. Users are notified when their input is required, linear processes are transformed into parallel. The workload is dispersed; more gets done; and the overall cycle time is reduced.
5. Empowering customers
Today’s digital technology has created unprecedented opportunities for the customer. From updating our bank details online to searching and ordering goods and services – even applying for a mortgage.
As consumers, we love the convenience, the transparency, and the control, that self-service brings. And the most efficient businesses know it. By setting up mobile portals with a seamless link to their ordering system, or an interface to the bank’s back end transactions, the online shop, bank and mortgage provider saves themselves £££s of data entry and validation.
6. Knowledge-driven processes
The ability to remove the human element from a process is intrinsic to manufacturing processes and thanks to today’s Business Process Automation (BPA) software, it’s not just for giants of industry.
In today’s environment where we face ‘information overload,’ an automated workflow can streamline all the emails, correspondence and anecdotes associated with a process and is therefore invaluable to a company looking to increase efficiency.
When you automate a process, you create owners for each step and therefore increase accountability across the business. Automation has many applications, from delivering critical correspondence and reports at your chosen timescales to encourage timely responses around operational tasks e.g. purchase request approvals.
Perhaps the biggest benefit comes when workflow and automation are used intelligently to solve complex problems. For example, take the recent changes to the rules surrounding complaints handling. Using automation, businesses may create a “triage,” which knows how to route complaints based on the answers provided by the operator. The point is: your staff don’t have to know the nuances of the problem – the embedded business logic guides them down the correct path.
7. Reporting as power
Efficient companies don’t wait for IT to provide the reports they need for decision-making: they simply take a glance at their mobile dashboard or review the latest stats to hit their email. Thanks to analytics/reporting tools such as data dashboards, people across the business can get snapshot views of key performance indicators related to specific targets and processes. This removes the time, effort and skill required to analyse data using spreadsheets and allows many more users to get the information they need to make better decisions. Dashboards can be used in many ways, from providing additional insight to establishing KPIs and carrying out detailed root cause analysis. In short, efficient companies track numbers, monitor performance and are religious about finding improvements.
8. Digital collaboration
Even the smallest business can be a dispersed workforce, encompassing satellite offices, home workers and travelling staff. Using software, people may collaborate as if they were sitting next to each other. Online access to records and documents, document version control, “chat” facilities within processes; mobile integration; all remove data silos, increase visibility and productivity.
Not only this: globalisation has created an ecosystem where increased collaboration can play to a company’s advantage. Digital platforms enable not only staff but suppliers, customers and other process professionals to interact in real-time, share data and records in a safe and controlled environment: all this makes a business more agile, more responsive, and more efficient.