Process improvement

Companies need to continuously improve their competitiveness. Competitiveness can be improved through developing better products and services, as well as improving the cost efficiency. In process thinking the goal is to improve the way we work in a holistic way and to avoid suboptimization.

(Business) Process is a set of logically related activities and resources to transform inputs to outputs, which starts with a customer need and ends with fulfilling it. Customer value is created in processes, and therefore the different processes have to work together seamlessly, and processes need to be managed and improved.

Traditional organizations are based on functional organization structure, where same type of activities are grouped together, for example purchasing, production and customer service are their own functions. Work is organized from the function’s point of view.

This way of organizing work includes a risk of silos: the activities are not managed from the customer point of view, following natural sequences of events, but the work is (sub)optimized by functions. This makes the overall work slow from customer point of view and contains many challenges: information is lost, the interfaces slow down the achievement of results, there is double work, learning opportunities are messed and so on. In other words, in a siloed organization time, work, nerves and possibilities are wasted because the work does not “flow”, and management of the work is complex. However, customers are not interested in the internal boundaries and responsibilities, but in the final result.
The basic idea in process management is to take the business process as the basic unit of planning and management. Activities are approached and improved according to the natural work flow, based on customer need.
The picture below depicts an example of the high level processes of an industrial company: the core processes serving the customer, and the enabling processes. Each of the processes contains many subprocesses.

What is a good process like? It is hard to give one unambiguous answer to this question. A good process creates value for the customer and is related to the business targets. It does what it promises, in desired quality and time, efficiently without delays. A good process is fast and it has low variance in lead time. A good process is also simple and prevents mistakes from happening. It brings up the deviations, so they can be tackled.

A good process is also one, that minimizes waste, and the process steps are connected to each other with a continuous flow. The process is documented and known to everyone involved, and the common way of working is followed. It is managed and it has KPIs (Key Performance Indicators) which are measured and followed. The process is also improved continuously. In a nutshell:

  • processes have to be identified, designed to be efficient and documented
  • processes have to be managed
  • processes have to be improved

In process improvement it is crucial to activate the true experts: the people who work along the process. Often the first step when improving processes is to map the process together. Even if there already exists a process description for example in the quality handbook, the mapping and “walk through” of the process together will help to understand the big picture, to identify improvement potential, to identify waste and delays which should be eliminated and to create common understanding of the current state of the process. Often a very important starting point for the process is to reduce lead times, since then inevidently the share of value creating time in the process is increased.