What is Process Improvement?
Process Improvement (PI) is the identification, analysis, and course-correction of existing business practices in order to meet elevated standards of performance and quality.
It is a scientific approach towards incremental improvement or breakthrough progress depending on the goals, operational styles, and management of the business.
This article presents the basics, tools, and benefits of process improvement.
Table of Content
- What is Process Improvement
- Tools for process improvement
- Methodologies for Business Process Improvement
- Automation of Process Improvement
- The interplay between Business Process Management and PI
- Take away
What is Process Improvement
The purpose of Process Improvement is to identify opportunities for improvement, plan actions to improve, execute the plan and periodically map the impacts. Process improvement is also referred to as Business Process Improvement (BPI), business process re-engineering, and Continual Improvement Process (CIP).
An efficient cycle to improve processes is self-sustaining because the impacts inspire more engagement and spread the Midas-touch across all tiers of the business. PI is important to a business to stay competitive and to ensure employee engagement and morale. The outcomes of the PI process are typically measured in terms of enhanced customer satisfaction and/or product quality, increased productivity, employee work satisfaction and increased profit resulting in higher and faster return on investment (ROI). It can also inspire Kaizen – the Japanese concept of continuous improvements in any endeavour.
Process improvement can also be aimed at identifying and eliminating weak links in the operations of the organization. This leads to several benefits, including
- Identifying opportunities for cost-savings and quality improvements
- Reducing or eliminating delays in operations
- Identifying breaks in the chain of operations and fixing them
- Minimizing or eliminating waste
The first step in the cycle of process improvement is an assessment of the current business practice. This is perhaps the most critical of the steps, in keeping with Einstein’s belief “If I had one hour to save the world, I would spend fifty-five minutes defining the problem and only five minutes finding the solution.”
Some critical components of the assessment are:
- Re-evaluation of the core objectives of the business
- Analysis of existing processes, their need with respect to the core objectives, and their outcomes
- Evaluation of the overall outcomes vis-à-vis the original objectives of the business
- Review of existing tools (e.g. personnel, software, hardware, etc.) and their value to the processes
The second step is planning the changes required. The changes may be drastic, in terms of the core objectives of the company, or in specific activities, for better efficiency with the existing objectives. A formal documented process improvement plan can help organize thoughts and act as a guide throughout the implementation of the PI. A process improvement plan must have the following five features:
- Mapping of the process that needs to change with clear delineation of the sub processes within it.
- Analyzing the changes required in the specific activities that may be causing delays, resource wastage, etc.,
- Redesigning the problem activities to eliminate the delays, resource wastage etc.
- Breaking down the deliverables into tasks and scheduling. Standard Operating Protocols (SOPs) can help in accurately defining the tasks, deliverables and schedule.
- Assigning personnel, tools, and other resources to implement tasks of the redesigned process
- Designing an assessment and feedback loop to monitor if changes have the desired effect
- Planning alternate options, in case of unexpected roadblocks and failures in the original plan.
The third step is the implementation of the activities planned for process improvement. If the plans are well laid and SOPs are comprehensive, the implementation is usually a smooth process.
The implementation process must be monitored and periodically assessed to check for compliance with the SOPs and to identify problems early on for necessary course corrections. It is beneficial to include all stakeholders – employees, consultants, etc. – in the loop to create buy-in and seamless integration of the processes throughout the organization.
Tools for process improvement
The S.W.O.T process is commonly used for planning process improvements. It is a technique to analyse the Strengths, Weaknesses, Opportunities, and Threats of the business. A formal SWOT matrix can provide an easy visual representation of the four themes and help in the flow of new ideas and unique solutions.
The S.W.O.T analysis typically involves brainstorming among all the stakeholders in the business. A good session of brainstorming has the following features:
- Thinking out of the box
- Listening to other people’s ideas
- Deferring judgement
- Staying focused on the topic
- Having a visual representation
- Arriving at a solution
The visual analysis using the S.W.O.T technique is usually in the form of a SWOT matrix:
Other visual representations of the planning process include
- Simple flow charts: a picture of the separate steps of a process in sequential order.
- Affinity diagram: the organization of large amount of disorganized data and information into groupings based on natural relationships
- Interrelationship diagram: the mapping of interrelated cause-and-effect relationships and factors involved in a complex problem for the desired outcomes.
- Tree diagram: the mapping of the hierarchy of levels of tasks that are required to accomplish a goal or solution or task.
- Prioritization matrix: a pair-wise evaluation of items and narrowing to the most desired or most effective options.
- Matrix diagram or quality table: Mapping of the relationship between two or more sets of elements to analyze relatively complex situations by exposing interactions and dependencies between things
- Activity network diagram: Listing of the appropriate sequence or schedule for a set of tasks and related subtasks.
Other forms of visual representation include fishbone diagrams, histogram charts, scatter diagrams and pareto charts.
Methodologies for Business Process Improvement
Several methodologies are now available for business process improvement. Depending on the needs and goals of the business, these may be used in isolation or in combination.
- Lean Methodology: This is a process that looks to minimize waste. It is used to methodically eliminate tasks that are not of value to the business.
- Six Sigma Methodology: This process involves Defining the problem, Measuring its impact, Analyzing the solution, Improving the process and Controlling the process for sustenance– the DMAIC approach. The goal of this methodology is to minimize variability and increase consistency of product or service.
- Lean Six Sigma: A combination of Lean and Six Sigma is used to optimize capacity, reduce cycle times and eliminate variability.
- Kaizen: This process focuses on improving quality, productivity and efficiency through small shifts in daily work or corporate culture to foster an environment that doesn’t punish errors or mistakes, but instead works to prevent them from happening again.
- 5S: The 5S model is a combination of the Kaizen and Lean methodologies and it stands for five main steps: sort, straighten, shine, standardize and sustain.
- Rapid Improvement: An action-oriented activity with concomitant management of apparent issues with quick, obvious solutions.
- Total Quality Management: TQM comprises the Plan-Do-Check-Act steps that is based on the belief that every team member maintains high work standards.
- Theory of Constraints: This approach finds process bottlenecks and fixes them during execution
Automation of Process Improvement
The automation of Process Improvement can ease the process by organizing and interconnecting the various parameters clearly. Some of the benefits of PI automation are:
- With many businesses now operating in the digital arena, either totally or partially, the need to improve, automate and integrate business improvement processes in the digital domain necessitates PI automation.
- Automated PI can guide organizations to orchestrate activities, deal with anomalies, and capitalize on opportunities and change.
- The implications of the PI changes on the workforce, customers suppliers, etc. can be analyzed in real time and results incorporated into the PI itself. This can provide stakeholders with oversight and the ability to measure how a process is running at any point in time.
- Automation tools can minimize or eliminate human intervention and associated drawbacks such as subjectivity in decision making and challenges when dealing with multiple interrelated parameters.
- Time savings is another major benefit to automating PI.
AI-Process Improvement solutions allow machines to mimic human actions for complex tasks or steps involved in PI. The AI-enabled automation of PI occurs through a string of rules and triggers that eliminate the need for manual labor in specific parts of the process. McKinsey & Company estimates that AI can automate as much as 45 percent or more of any particular job, allowing workers to focus on higher level, mission-critical activities. The adaptive processes enabled by AI, through deployment of real-time data can guide improvements in all aspects of the business.
The interplay between Business Process Management and PI
PI compliments BPM when used as part of the overall strategy. Apart from ushering in large scale changes to an organization, it can bring about incremental improvements in the daily functioning of the business, which can eventually lead to higher productivity, better workforce and larger bottom lines. PI contributes to BPM in the following ways:
- Eliminates redundant tasks
- Convert sequential tasks into parallel tasks for time savings
- Minimize approval steps to remove bottlenecks
- Allow expansion and inclusion of necessary tasks and personnel
- Integrate the process with other aspects of BPA for seamless operation and continuous improvements.
The specific advantages that PI would offer to the overall BPM are:
- Enhanced productivity
- Seamless processes with enhanced visibility
- Better cost management
- Higher quality product/service
- Time savings
- Compliance to regulations
- Elimination of wastage of resources
“Continuous improvement is better than delayed perfection,” said Mark Twain. PI solutions can help organizations with increased profits and productivity, enhanced customer satisfaction, larger bottom lines, and better worker morale.
When integrated as part of the routine business management practices, PI can help timely detection of what needs to be changed and the implementation of necessary changes.
Automated PI can provide such advantageous features such as visualization, workflow automation, and no-code/low-code tools so that companies stay competitive in this increasingly digitized business world.