New ideas and innovations are changing the world we live in. Significant changes in business are being driven by technological advancement, globalization and emerging economies. Business strategy has changed over the decades, and a sobering theme has emerged: adapt or die.
Businesses that aim to be relevant for a long time and stand strong among the competition have to put in efforts to continuously improve their processes and systems. But process improvement is not an easy task in an organization that has several ongoing functions and operations. Any change to one process can affect the others and so it is important to know what needs to be improved and how.
Definition of Business Process Improvement
Business Process Improvement is an area of management that deals with the improvement of processes in an enterprise to improve their efficiency and accuracy. It requires the company to analyze its processes in the business and identify the areas where there is friction that is reducing the efficiency of the processes. This friction or gaps in the process could be related to anything from employees’ skills to available resources or infrastructure to operations.
After thoroughly analyzing the processes and identifying the scope for improvement, the processes must be redesigned incorporating the improvements wherever possible. The redesign should focus on fine-tuning the workflow in the process or the organization specify the tools needed for implementation of the business process redesign.
After the new design for a process has been developed, it has to be implemented after approval from the company’s leadership. The implementation has to be closely monitored to ensure that it is able to deliver the desired results. During and after implementation, it is important to continue gathering data on the improvement and use some key metrics to measure the effectiveness of the changes introduced. Once the improvements have been put to action, their effect on other processes or operations in real-time must be tested.
The need for Business Process Improvement
Inefficient or faulty processes in a business can have a number of implications:
– They might affect product or service quality which in turn results in dissatisfied customers.
– Inefficient processes may also lead to employees being overworked and yet not getting the desired results, which ultimately in people being frustrated and demotivated.
– Work may remain incomplete or may be done unnecessarily or duplicated, wasting resources and time.
– Inefficient processes may also increase the costs incurred by the company.
– Due to improper workflow, bottlenecks may form in the process causing teams to miss deadlines.
If your business is facing any of these problems, you probably need to consider undertaking a Business Process Improvement initiative. Business Process Improvement can help a business in many ways. Some of the common benefits that companies enjoy with Business Process Improvement include:
Business Process Improvement focuses on removing any inefficiencies or unnecessary steps in a business process. This means that the process will use up lesser resources and time, and employees will be freed of monotonous tasks that don’t really need their attention. People can be shifted from tasks that don’t truly utilize their skills and reassigned to jobs where their skills will be of use.
For example, a data entry task in a process can be monotonous today. Though it was an important activity that required human intervention and assured that all the data related to a process or a company was uploaded to the system. But today everything can be stored in the Cloud. If a business uses a collaboration tool where all team members can save and access data on the Cloud, data entry is no longer required. That eliminates one unnecessary task and the employees can devote that time to something more important, thus increasing the overall productivity in the organization.
When an employee is spending less time on mundane and redundant tasks, and contributing more to the growth of the company doing something they are skilled at, they feel useful. Tedious tasks that don’t add any value to the process are removed or automated during Business Process Improvement, allowing employees to do meaningful work that helps them grow as well. Employees who feel valued, see positive results delivered from their work, and have a balanced work environment, are sure to be more satisfied.
Improvement in product quality
Process improvements can lead to better product quality. Business Process Improvement can mean better quality checking processes, better problem-solving methods, and other improvements in operations that can add to the product quality.
For example, if the planning and design process in a manufacturing company is improved and made more efficient, it will ensure that all issues are identified and addressed in the design stage itself. That means only a flawless design will go forward for production and no known issues will make it to this stage.
Better quality of products and services means that customers will receive value for money. Business Process Improvement can also assure that products and services are designed keeping customer pain points in mind and are delivered timely. All of these factors contribute to customer satisfaction. And happy customers keep coming back to a business for more, so it also improves customer loyalty.
Faster time to market
Improved business processes that employ continuous improvement methods like Kanban, Just-in-time, 5S, and others ensure that there is no backlog of work or bottlenecks restricting the workflow. This allows products and services to be delivered to the market faster which gives the company a competitive advantage over others in the industry.
Agile practices, Scrum, and Kanban can help in maintaining a continuous value flow in the process and identify roadblocks sooner allowing enough time to address those issues and release the product or service on time.
There are many rules, regulations, and industry standards for a business to follow. Compliance with these regulations or standards is necessary to avoid quality issues and, in some cases, legal action too. Business Process Improvement ensures that the business keeps track of and adheres to these standards. Process improvement can build compliance into the new process making it transparent and standardized.
The risk here could mean anything. In any manual process in an organization, there could be a risk of human error. There is a risk of data loss, data theft, accidents, negligence, and much more. Business Process Improvement makes processes efficient enough to ensure that these risks are mitigated.
For instance, taking the example of data entry used earlier, in manual transfer or entry of data there is always a risk of error that may be very difficult to find. But these errors may result in much bigger problems later on. Automating the process or upgrading to Cloud-based systems reduces the risk of such errors. Process improvements involve adopting some best practices that help make the process less prone to mistakes and risks.
Improved processes mean better performance, better quality, and better value delivered to customers. Thus, Business Process Improvement ultimately gives the company a competitive advantage in the market.
For companies to perform at their best it is important to adopt agile practices. Business Process Improvement encourages the adoption of agile practices that aim to reduce waste and bring improvement to the process in small, iterative steps. An agile approach is essential for businesses to be proactive, prepared to handle disruptions, and easily adapt to change.
How Business Process Improvement works
Business Process Improvement focuses on the needs and goals of the business that a particular process is required to support in accomplishing. The aim is to refine the process until it is able to produce optimum results. The process improvement may involve the core operations of the organization or some other area of business. Business processes can be broadly categorized into three types:
These are the core business processes that form a value stream right from the beginning of planning to the point of delivery of a product or service to customers.
These business processes deal with corporate governance and other managerial activities such as human resource management, budget, etc.
Supporting processes are those processes that support the core business processes. These could include technical support, customer service, maintenance, etc.
Role of leadership in Business Process Improvement
In any change or transformation that a business goes through, the role of the leadership is immensely important. It is the job of the leadership and top managers of the organization to identify where improvement is due and what needs to change. The leadership has to define the goals and targets of the Business Process Improvement initiative for others to have a clear idea of what they are working towards.
The leadership also has to communicate to the other employees why this change is needed and how it will help in their collective and individual growth. The role of the leadership is to inspire and motivate the people in the organization to strive for continuous improvement, not as an obligation but as a willful attempt to adapt and evolve.
Thus, the leadership of an organization must be aware of what Business Process Improvement demands and how it can be successfully achieved. This service aims to provide leaders with the right assistance they need and equip them with the best tools for successfully carrying out a Business Process Improvement initiative. Each individual business needs a different approach, both in terms of leadership and Business Process Management. This service will offer customized solutions to leaders, enabling them to handle their business needs better.
Understanding the steps involved in Process Improvement
The general approach to Business Process Improvement is the same, no matter what kind of business or organization we are dealing with. The Business Process Improvement method starts with Mapping and is carried on hereafter as a continuous process.
This service will help your organization navigate the process improvement initiative, taking you through all the steps and thoroughly analyzing your processes to identify what needs to change. It will provide an unbiased perspective of what is working in your business processes and what is not. Based on this analysis, appropriate solutions will be suggested for redesigning the processes in an attempt to make them more efficient, lean, and productive.
The service approaches Business Process Improvement as a 5-step method. These 5 main steps include:
This is the first step in the Business Process Improvement project will be Process Mapping. This step helps us understand how your business functions and find weak links in the processes or inefficiencies that are preventing the process from delivering the best results. We can visually represent the existing processes at this stage, which will help in getting a clear understanding of the workflow, the people involved, the resources used and all other aspects crucial to the success of a process.
Once the process is mapped out, the next step in this method will be an analysis of the existing process to gain important insights. The analysis will focus on finding out the answer to some of the following questions:
– Are any steps in the process taking longer than they should?
– If there are any delays in delivery or missed deadlines, what is causing these delays?
– Which steps in the process have the highest impact on product or service quality?
– Can these steps be made more efficient by changing anything?
– Are any of the steps using up more resources than they should?
The analysis will help us get to the root cause of a problem and decide on a solution to improve the process.
Once we have the necessary insights, we can move ahead towards process redesign. This involves identifying the right solutions to eliminate the inefficiencies in the existing process, how these changes can be implemented, who will be required to work on the implementation, what metrics will be used for comparison, and other such crucial points.
By the end of this step, we will have a complete action plan for the process improvement to be carried out.
At this stage, we implement the changes that have been planned in the new process design. The implementation has to be carried out very carefully to ensure that the changes are executed well and deliver the results that we are aiming for.
We first carry out the execution at a small scale and test the effectiveness by comparing the changes with the original process. This helps us verify that the redesign is efficient and can be implemented in other processes across the organization.
Implementing these changes at a small scale helps mitigate risks and reduces the chances of failure at a large scale.
After the changes have been implemented, the process will be continuously monitored to see if it is giving the desired results. It has to be observed over a period of time to conclude that the change or improvement was successful. Relevant metrics will be used to benchmark and compare the new process with the older process and to see if the new process is meeting the milestones set.
Continuous Improvement of Business Processes
Business Process Improvement does not end after the successful implementation of the changes. It is a never-ending process and needs to become a part of the company’s culture and its long-term strategy. Continuous improvement is more than just a business buzzword today. Continually improving the business processes is essential for the business to grow and transform.
Continuous improvement requires organizations to encourage a culture of constant and sustainable improvement. It does not necessarily have to be a major overhaul in the business processes but can be very small, logical changes from time to time. Continuous improvement can be made both in the simple day-to-day functioning of the company or can be major shifts in the strategy. There are many benefits of continuous improvement that an organization can enjoy. Some of these benefits are:
Continuous improvement principles focus on empowering employees to bring to light the problems that they face at work and suggest solutions to those problems. This helps improve the efficiency of the processes. But apart from that, it also helps employees feel heard and realize that their inputs are crucial for the growth of the company. When an employee’s suggestion is heard, assessed, tested, and if found effective, implemented company-wide, they feel important. This changes their role and responsibilities in the organization and instead of being passive observers simply taking orders, they become actively involved participants in the change.
When existing employees leave, hiring new people is both expensive and time-consuming. Finding new talent becomes tough, and the company needs to pay for talent search, recruitment, hiring, and training a new employee. Moreover, the skill that is lost along with an employee takes a lot of time to be replaced. New hires have to be trained on the job and it may take them anywhere between months and years for them to gain the experience and expertise required for the role. Continuous improvement engages employees to actively participate in the growth of the organization, giving them a sense of belonging and pride. This not only improves their performance but also helps retain employees in the organization, giving them fewer reasons to quit the job.
Competitive products and services
It is no surprise that continuous improvement of business processes ultimately leads to better products and services. Continuous improvement aims at identifying value for the customer and delivering that value by eliminating anything that is not contributing to it. In the process, it eliminates wasteful steps and practices, making the process more efficient, reducing unnecessary expenditure, and thus increasing the capacity to deliver value to customers. Thus, due to continuous improvement, companies can create more competitive products and services that can increase their market share.
Improved customer service
Companies that continually improve their process are not only able to deliver better products and services but are also able to offer better customer service. These companies usually approach every process keeping the customer’s needs in mind. They optimize their processes to ensure that they can deliver maximum value to increase customer satisfaction. In doing so, they are able to identify customer pain points and predict their needs even before the customer knows it.
Proactive learning culture
In today’s business world, technology and skills become old or obsolete quite quickly because of the pace at which technology is advancing. This makes it necessary to keep updating the knowledge base of the workforce to ensure that the company can remain relevant and stand the competition. So, companies that adopt the principles of continuous improvement challenge and encourage their employees to learn new skills. They adopt new technology wherever there is a need for it to make processes more productive. Continuous improvement provides a framework for organizations to better themselves through continuous learning and implementation of the knowledge gained.
Continuous Improvement Tools
Continuous improvement may sound like a simple notion which only requires an organization to keep bettering its systems and processes over time. But in practice, bringing about this change is quite challenging. Both Business Process Improvement and continuous improvement require a change in the mindset of the people and the culture of the company that cannot be achieved overnight. It requires some aids that assist in bringing about this change. These aids or tools can help turn continuous improvement practices into actionable tasks and then into habits, thus rooting it deep into the company’s culture and values.
There are several tools that help organizations implement continuous improvement of business processes. This consulting service on Business Process Improvement will introduce your organization to these tools and also guide you on how each of these tools can be applied to your existing processes.
Some of the most popular tools that we focus on include:
Kaizen is a methodology for continuous improvement that originated in Japan and was used by Japanese businessmen after World War 2. Kaizen can be implemented in two ways – Quality Teams or Kaizen Corners.
In process improvements where the knowledge and experience of experts in the field are required to bring about change through the use of statistical tools, Quality Teams have to be built. These are only for improvement tasks that other employees may not be able to carry out effectively.
Kaizen corners on the other hand are for everyone. Kaizen corners involve every employee of the organization in process improvement and welcome suggestions for change from everyone. Employees can be trained over time to better analyze situations and offer more productive solutions. They can even be offered incentives for proposing highly useful solutions now and then.
There are many ways of implementing Kaizen to ensure streamlined workflow in a process which will be included in this service.
The PDCA or the Plan Do Check Act cycle is another model that supports continuous improvement. It is often credited to Dr. William Edwards Deming and Walter Shewhart. It is a four-step model, the four steps being the Plan-Do-Check-Act. It is represented as a circle to indicate that continuous improvement is a continuing process and the steps must be repeated again and again for continuous improvement to be effective.
Each step in this model takes the process undergoing change closer to the goal, and when repeated a number of times, the improvement becomes self-sustaining.
The 5 Whys is the simplest and one of the most effective methods of finding out the root cause of inefficiencies in a process. This involves asking 5 “why” questions each leading to the next, and the fifth “why” is finally supposed to give the reason behind an inefficiency or fault. When the reason for failure is known, it becomes easier to find a solution to the problem.
The 3Ms, Muri Mura Muda, was part of the Toyota lean production system also popularly known as TPS. The 3 Ms refer to the three categories of deviation that can cause problems in a process or an organization. This is a tool for identifying problems as well as eliminating waste in a company’s processes. It is used in total quality management and in the adoption of lean practices for value creation.
Apart from these few popular tools, there are several other tools as well as continuous improvement software that can help in the implementation of change in the organization. The consulting service on Business Process Improvement will equip you with the knowledge of these tools and software, enabling you to apply them in your organization.
Business Process Improvement methodologies
Business Process Improvement can involve the entire organization or a single day-t-day operation. Depending on the scale of the change required and the type of improvement that an organization is aiming for, it can choose between different established process improvement methodologies.
This service will acquaint you with several different Business Process Improvement methodologies and after a thorough assessment of your business needs, we will zero in on the method that will best suit those needs.
Broadly, the following are the most popular Business Process Improvement methodologies that organizations use.
Benchmarking is an effective and economic method of introducing better business practices in an organization. Benchmarking, as the name suggests, compares the organization’s processes and practices with those of other successful organizations. It then aims to improve the strategies, ideas, processes, and even products or services of the company by adopting the best practices from these successful organizations.
There are, however, some challenges to the implementation of this methodology. The challenges can range from logistics to legalities, and a company must be careful not to cross any lines and ensure that there are no risks involved.
An experienced professional consultant can help your organization understand the nuances involved in Benchmarking and suggest ways to implement it in your company without risk.
The PDCA cycle has already been briefly discussed above. It is one of the most popular methodologies for process improvement that helps improve productivity. The PDCA methodology requires a company to plan for change, implement those changes on a small scale, measure the success and effectiveness of these changes, and if found successful, apply them to the entire process or throughout the enterprise, whichever the case might be.
Six Sigma Methodology
Six Sigma is one of the most widely used methods of process improvement that aims at improving the performance of a process or an organization by identifying the underlying causes of deviation resulting in failure. It removes the errors or defects in a process that affect the quality of the output which is directly experienced by the customer. Six Sigma takes a customer-centric approach. It focuses on what the customer expects from a product or service and where the process is lacking that is not allowing it to meet the customer expectations.
The DMADV methodology is a part of the Six Sigma framework itself. DMADV stands for Define-Measure-Analyze-Design-Verify. This methodology is particularly useful when implementing new strategies or redesigning a faulty process. It uses cause and effect analysis to identify the causes of defects.
The concept of Lean Thinking originated from Toyota Production System. This process improvement methodology aims to reduce waste and maximize the value that the process adds to the final product or service. Lean processes eliminate any unnecessary steps or parts of a process that are not contributing in any way to the value of the product or service.
Total Quality Management
Total Quality Management (TQM) is a business improvement methodology. It is a system of practices, training methods, and tools that keep evolving according to the business needs and customer demands. TQM encourages teamwork and projects continuous improvement as an obligation for everyone in the organization. Every member of the organization is required to take ownership of process improvement to meet customer needs and expectations.
TQM helps companies adapt to the changing environment of the industry they are a part of by empowering them to quickly respond to changing demands.
Business Process Improvement in the Biotechnology Industry
The Biotech industry is a highly competitive industry in today’s world. Being an industry that is driven by innovation and technology, companies in Biotech have to keep updating their processes and systems to ensure quality in their products and services. Continuous improvement is imperative in Biotech and Pharmaceutical companies that want to always enhance the quality of their products as well as their interactions with clients, customers, or patients.
The pharmaceutical industry was one of the latest adopters of the concept of continuous improvement. But the implementation of robust methods like Six Sigma has helped companies achieve commendable results. Now continuous improvement is a common practice in the industry. Biotech and pharmaceutical companies need to get their products into trial as soon as they can. There is always a sense of urgency as the competition is immense and whoever gets to the market first has the best chances of capturing the market. This sense of urgency drives Biotech companies to optimize their processes to deliver quality faster and with minimum waste. Process improvement applies to all spheres of Biotech or pharmaceutical companies, including manufacturing, testing, marketing, and others.
Business Process Improvement in the Healthcare Industry
Healthcare organizations need to meet standards of reliability and quality more than any other industry. Healthcare is an important and critical area that deals with people’s health and lives. So, organizations in Healthcare have to ensure compliance with the industry regulations and best practices to mitigate risks and prevent any kind of adversities. Process improvement in Healthcare companies can drive improved patient outcomes as well as better customer or client satisfaction. It can identify and eliminate inefficiencies and reduce costs. Process improvement can also enable better decision-making and improve patient care quality.
Business Process Improvement in Healthcare needs to focus on improving patient flow across areas of the organization such as Emergency, Operation Theaters, Labs, etc. It should improve scheduling such as setting appointments for OPD, Radiology, Surgery, etc. Process improvement can also aim to improve the registration process of patients, accounting, and billing. Material management and supply chain management can be an equally important process to look out for in a Healthcare company. Adopting methods for process improvement will bring about a cultural change in the organization enabling it to serve its clients and patients better.
Business Process Improvement in the Electronics Industry
Technology is growing and changing faster than ever and the Electronics is at the heart of this revolution. The Electronics industry is highly volatile today with new innovations springing up every second day and the competition is constantly rising. In such a situation, it becomes all the more important to adapt to the change around you and improve your processes and products to meet the market demands.
Every aspect of an organization in the Electronics industry can gain from Business Process Improvement. Whether it is planning, research, and development, manufacturing, distribution, marketing, or even management and leadership, there is a need for innovation in every field. Process improvement in the Electronics industry has to focus not just on the business side but on the human side as well. Companies need to focus on what value customers expect to get in their products and services and how they can improve their processes to deliver that value. In fact, it was certain Electronics companies like Motorola and General Electric have been the pioneers in developing and implementing continuous improvement methodologies. With globalization and access to more information, both for customers and competitors, the need to continuously improve is even more for Electronics companies.
Business Process Improvement in the Energy Industry
The Energy sector is no longer the conventional industry that it was a few decades ago. There have been some major shifts in focus in the Energy industry with many new and alternative sources of energy making it into the mainstream, climate change driving change in the way other industries function, environmental regulations urging people to switch to renewable energy and so much more. This industry is probably one of the fastest changing industries today. A company in the Energy industry, thus, has to keep up with the changes taking place around it.
Improving the business processes in an Energy organization, be it energy generation or utilities, is essential for ensuring compliance with global energy policies, adapting to