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Process improvement in business: Part 2

Process improvement in business Part 2

Process improvement in business

In the 2nd of our articles looking at process improvement in business, we will explore the process you need to follow in order to successfully deliver the change you want to see, as well as the 8 wastes. The 8 wastes of lean are those wastes which often occur within business processes, spurring them on to make changes and improvements to reduce said waste. It is important to know not only the process to follow in order to deliver process improvement in business but also the types of waste you may see, spurring you on to launch the improvements you want to see.

In case you have missed Part: 1 Click Here to Read

The process to deliver process improvement

Process improvement in business: Part 2 - The process to deliver process improvement

To actually deliver process improvement in a business is not as simple as mapping and changing. There will often be a process behind this to ensure you have thought through every step, and every eventuality and deliver the right reforms and improvements for that particular process. Let’s explore this approach.

Identify the process

The first activity you need to conduct is to identify that a process is in need of improvement. As we mentioned before, there will often be a trigger to indicate a change is required. Here, you need to acknowledge that trigger, identify which process this is referring to and clearly define this process. Many processes interlink with other processes, so try to define the scope of your process clearly here.

To do this, you can create a grid to highlight the important metrics around the process and see how they are ranking against what you would expect, and what you would want from a future state-reformed process. These metrics could include their current performance regarding SLAs and KPIs, customer and employee satisfaction, errors, and time taken to complete, to name but a few. It will depend on what is important for you and your organization.

Map the as-is process

As discussed earlier, you need to map out the process as it stands today. This effort will involve engaging with the SMEs of the process (as they can help you map the realities of the process), communicating effectively with all involved so they are aware of what needs doing and why you are conducting this work and then getting into a workshop and map the process. As you do this, remember to have in-depth conversations, asking questions about issues and opportunities faced.

Identify the value and non-value-adding steps

Once the process is mapped, you can work with your team to identify which steps in the process are adding value, and which are not. To conduct this exercise, you can colour code the steps in RAG format – red for steps which do not add value, green for steps which do ad value and amber for those steps which do not add value but are required.

This is a powerful exercise to do with your team, as you can all stand back and see just how much waste is in the process, and how many opportunities to increase the value of the process and their work there is. This effort will help you to get buy-in from the wider team to continue on with this work because once everyone graphically sees the opportunities in front of them, they will be more motivated to continue the work.

Map the to-be process

Now you can see the extent of waste and opportunity within your process, you can effectively design your future state-to-be process. This can involve the simple removal of all of those steps which have been deemed non-value-adding steps (anything in red), the attempted reform at anything deemed non-value add but necessary (anything in amber) and the strengthening and potential increase of those steps identified as value-adding steps (anything in green).

When you conduct this activity, you will need to ensure the process can, in the to-be state, run from the starting point to the ending point without any issues.

Gap analysis

Armed with your as-is and to-be process maps, you can now conduct your gap analysis. At this stage, we can revisit all of those process steps and activities that we removed from our as-is process map to try and understand if we can actually remove all of these process steps, uninterrupted. The gap analysis here is to assist you in avoiding risk, specifically, the risk of removing steps from the process and something falling down later down the line. (You would be shocked to know just how many companies remove steps from their processes without testing whether or not this is actually feasible, and then experiencing big problems at a later date. Do not fall into this trap – conduct your gap analysis).

At this stage you will play around with your maps, testing each step removed and any new steps added in to see if the new steps continue to guarantee the success of the process, they achieve what they are built to achieve and that the steps that have been removed can successfully remain removed from the process.

Map the realized process

This step should be quite straightforward, given the majority of the process would have been built during the gap analysis stage. At the end of that stage, you will often see the final process. At this stage, you need to create the final map, as you want it to be shared with wider stakeholders. Any evidence of the gap analysis, any colouring (RAG) and commentary should be removed. You can at this stage add in any control measures you think may be needed to keep the process in check – just be mindful you do not add in wasteful, non-value-adding steps.

Test the new process

Now you have your new process mapped and ready to go, you can test it. This can be relatively straightforward, depending on what you did during the gap analysis stage. If you stress-tested steps at that stage, you should be in a better position now to trust the steps. However, you should still test the new process. This test can come in the form of using dummy data and dummy runs to test or parallel running the new process alongside the as-is process, testing the process with live data and scenarios. Either testing approach can be highly effective at ensuring the process works.

When testing, remember to be very clear on what you want the outcome of the new process to be. What products and services should be coming out of the process? What level of quality are you expecting the product and services to now be in compared to before? How much quicker do you want the process to run compared to before? What is your tolerance level for errors and issues? Set your parameters clearly and test against these.

Provide wider updates

The final step of a process improvement is one that is often overlooked – to update the wider business on the changes made. It is important to remember that the process changes will not necessarily just impact the immediate team, and indeed there could be a ripple effect across the wider business. Make sure everyone who needs to be updated has been, with a breakdown of the changes and the new process map.

The 8 wastes

Process improvement in business: Part 2 - The 8 wastes

When running through your processes and identifying waste, it can often be helpful to identify what type of waste you are dealing with or are searching for. This is because, sometimes, waste is not as obvious as you may think, and therefore you need to know what you are searching for. With that in mind, there is an approach to waste known as the 8 wastes which people who deploy process improvement often follow. Let’s explore what these 8 wastes are.

Transport

Transport waste can be generated by the moving of things from one location to another. It can be generated by the location of resources being vastly spread out, geographically and lead to huge amounts of time waste being built into a process – time wasted waiting.

Examples of transport waste include handoffs between departments, sending and resending emails or information and moving goods from warehouse to warehouse.

The causes can include poor office/warehouse layout, unnecessary steps within a process or having too many sites to operate your business from.

Solutions to transport waste can include simplifying processes by reducing handoffs, prioritising what needs to be sent and to whom and having centres of excellence from where all operations run.

Inventory

Waste in inventory occurs when more products or services are stored or created than the customer has asked for. This can lead to a backlog of products and services that then need to be cleared through.

Examples of this type of waste include stockpiling of supplies, often just in case, a backlog of data waiting to be entered or the storing of information for longer than is required.

Causes could include poor monitoring systems, unreliable suppliers and misunderstood customer needs.

Solutions could revolve around providing a greater focus on the voice of the customer, a Kanban system for workflow to be introduced and a review of the suppliers.

Motion

Motion waste refers to any action that does not add value to the product, service or process. This action could be conducted by a human or a system, but it is something which does not positively impact the final output. This type of waste often occurs when we see something “repetitive” happening.

Examples of this type of waste include repetitive keystrokes (manual intervention), walking between equipment in the office and switching between applications on the computer.

Causes of motion waste can include poor office/workstation layout, poor process design (therefore requires manual steps) and congestion on equipment.

To solve this waste, you could rearrange layouts to reduce the need to move, ensure enough equipment is available for all and resign processes to reduce the manual and repetitive steps.

Waiting

Waiting occurs whenever work or a process has to stop. In this instance, the process flow is disrupted by something which needs addressing, fixing or simply waiting for. The most common type of waiting waste is when you have to wait for someone within the process to complete their work before you can resume yours.

Examples of this type of waste include waiting for sign-off from another department, waiting for a part to be delivered to the site or waiting for a 3rd party provider to send over their data.

Causes of this type of waste can include work absences, poor communication and unbalanced workloads.

To help address this type of waste, you can ensure each worker has a delegate, implement tighter SLAs around when sign-offs are required and review the spread of workload across the team, ensuring it is balanced and fair and there is no risk of a backlog.

Overproduction

Overproduction occurs when workers produce more and more data/goods, often when there is no real demand from the customer or the market for this. It can be the case that no orders have been placed for these products or services, but the provider is creating them “just in case” the demand does come. Organizations that create products and services “just in case” are often plagued with this type of waste.

Examples of overproduction would include too much data being produced, additional unread reports being produced and the manual storage of digital documents.

Causes of this type of waste include producing things “just in case” demand comes in, not knowing your customer requirements as clearly as you should or changes to your process not being communicated out.

Solutions for this waste could include creating an audit report to reduce the volume of products being produced in line with demand, developing a more effective way to understand customer needs and producing only the required amount of data, no more.

Overprocessing

Overprocessing waste occurs when we have the creation of multiple versions of the same task. This can lead to the production of multiple versions of the same product or the processing of something additional for no purpose. Rework loops are most commonly associated with this type of waste, something which plagues many processes across all organizations.

Examples of this type of waste include excessive reports being created, the same process having to be run time and time again as something has gone wrong (rework loop) or needing multiple signatures.

Causes of this type of waste can include poor communication, human error and the misunderstanding of customer needs, often because the method by which customer needs are established is wrong or not fit for purpose.

Solutions for this type of waste can include eliminating unnecessary sign-offs, vetting all requests for reports to ensure they do not already exist and giving each process an owner to avoid any confusion.

Defects

Defects refer to mistakes that are made when running a process to deliver a service or product. These defects, also referred to as errors, cause problems for your processes, making you spend more time completing the process, fixing the issues that arise from the errors and dealing with the fallout.

Examples of defects can include missed deadlines, missing or incorrect data and the wrong file being uploaded to a system.

Causes of such defects can include documentation being out of date (including work instructions), customer needs being miscommunicated and there being a lack of controls and checks and balances in the process.

To solve this type of waste, you can ensure all documentation is up to date, quality check data ahead of the upload into a system and root cause every defect that occurs to identify the right controls for the future.

Skills

Skills waste is often related to the non-utilisation of skills in your organization. There can be a wealth of skills individuals in a business harbour, but due to the nature of their roles or the understanding from management of the skills they have, these skills are not utilised in the way they should be. Not utilising such skills can be a significant waste for an organization.

Examples of skills waste include assigning staff to the wrong tasks, not bringing in the Continuous Improvement Team to improve processes when required and not knowing the extent of the skills that make up the team.

Causes of this type of waste include poor communication of the skillset available and that which is required, poor management (not seeing what skills their team have) and a lack of teamwork.

Solutions for this type of waste can include conducting a skills matrix and keeping the document live, better-defining roles and responsibilities within projects and management being trained to better recognise skillsets and upskill their teams.

In conclusion

Process improvement in business, as I hope you can now see, is a powerful tool that can deliver fantastic results. Whilst the end result, an improved process, will always be the same aim, how we get there will be different depending on the process in question, the team running the process and the needs of the business. With process improvement in business, it is always important to remember the ripple effect it can have on an organization. Deliver it well, and process improvement can set your organization up for big success over the long term.

Robert Chapman

Robert Chapman

Director and Author of Leading Business Improvement and passionate about all things Process, Continuous and Business Improvement. Over a decade of experience in delivering projects for my clients in these areas, as well as root cause analysis and the reduction of business costs.

Robert Chapman

Robert Chapman

Director and Author of Leading Business Improvement and passionate about all things Process, Continuous and Business Improvement. Over a decade of experience in delivering projects for my clients in these areas, as well as root cause analysis and the reduction of business costs.

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