Business Process Improvement...Employees at all levels in organizations are expected to focus on contributing to identifying opportunities for improvement and where possible driving such improvements within their respective business areas of responsibility. How do they go about? The answer will clearly depend on the job scope of the employee. An engineer may be responsible for a production line, a manager may be responsible for a range of products across a number of process lines, a senior manager will have an overall business performance strategic objective. However, all in their own way and within their respective scopes of responsibility need to actively and positively contribute to business process improvement. In addition to contributing to achieving improved performance, activities across the organization will need to be aligned, so that in one area, the focus in not on cost reduction via volume increases, while in another area of the same business the focus is on adding value via tailoring product provision to unique customer demands based on lower volumes at higher average selling prices.
The approach to process improvement needs to be considered at a strategic level. Will the organization focus on improving operational flexibility in order to become more responsive to customer demands? Will the focus be on becoming the technology leader? Etc., etc..
Maybe the objective is to be a cost leader, with the lowest priced product on the market, while at the same time being a leader in terms of flexibility and responsiveness to customer demands. . Note: these types of strategic objectives are not mutually exclusive, in fact many organizations do currently strive to achieve similar objectives, however, the relationship between potentially conflicting objectives and how they are communicated needs to be carefully planned and rolled-out. For example, if the focus is to become the price leader, then customers may be willing to forego levels of flexibility in terms of product or service offering. If however, the organization can improve flexibility while similarly driving down costs, then “flexibility” leadership versus “competitor flexibility” needs to be integrated into the organizational objectives as a contributor to the cost leadership objectives.
There are many ways of driving business process improvement, however, a first step is an understanding of the various alternatives. It is important that management, charged with leading change, have an comprehensive understanding of improvement techniques being applied within their organization, while also having at a minimum an awareness and ideally a solid understanding of the alternative improvement tools, techniques and methodologies available and potentially suitable to implementation within their organization.
Common improvement methodologies are:
i) Lean and Just In Time
ii) Total Quality Management
iii) Statistical Process Control
v) Quality Management Systems
Each of the above, brings a different focus. Each requires a long term active senior management commitment.
Many organizations, have impressive process improvement programs in place, yet do not specifically have lean or SPC, etc.. However, components of these top level improvement concepts, are understood and implemented on a regular basis within their organizations. For example, many highly automated processes will have an OEE (overall equipment effectiveness) process in place. Where the cost of inventory is a concern, Kanban Pull processes may be implemented, similarly Kanban is highly effective in industries will rapid technology change where there is a danger of inventory obsolescence. Where product reliability is a key differencing factor, then comprehensive product validation including worst case stress testing will need to be a defined organizational requirement with targets for performance improvement.
A good approach to ensuring the optimum process improvement methodologies are in place, is to perform a risk review of the organization, with the key focus being on the long term success of the business. With the risks understood and documented, then ask the question, what business process improvement techniques, are best suited to our organization to address and minimize the risks identified. Then the business can persue a program of ensuring relevant staff understand and actively apply, (e.g. via adding into annual objectives) these improvement techniques.
As stated above a key step, is a clear understanding of the relevant improvement approaches. Therefore the organization that wants to actively drive improvement, will need to implement on-going employee training on the agreed improvement methodologies, for example, total productive maintenance, process capability analysis, HAZOP analysis, bottleneck analysis etc.. The ongoing training will need to be matched with continual active management focus, demands and leadership.
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