Developing a Process Mindset

People Should:
 Understand that work is converting tasks into output, and the way it’s put together
 Understand how the process maps out
 Understand the impact of deviations
 Identify inputs necessary
Outputs, and how they’re used
 Distinguish core and support processes
 Understand downstream ramifications

Triggers for a BPI Effort

 Inefficiencies/Problematic performance
 Changes in business landscape
 New technologies
 Shifts in customer preferences
 New competitors

Tips for Benchmarking

Benchmark:
 Direct Competitors
 Organizations in your industry (that aren’t competitors)
 World-class organizations (regardless of industry)

Break the BPI team into three groups, assign one bullet to each

Redesigning the Process

 Envision a better process:
 Brainstorm
 How do we beat customer expectations?
 How do we cut costs?
 How do we reduce complexity?
 How do we reduce cycle time?
 Define metrics
 Of customer satisfaction
 Quality
 Cost
 Cycle time
 One idea: Have people write stories about the future, and then read them out loud.
 Test ideas
 Role-play the process
 Use artificial/realistic orders, contracts, etc
 Look for bottlenecks, coordination issues, etc.
 Practice
 Use real inputs, real people
 Computer simulation
 Examine organizational ramifications of new process:
ORGANIZATIONAL ASPECT ‘WILL THE NEW PROCESS REQUIRE…’
Structure  Creation of new jobs, departments, or reporting
relationships?
 Major modifications to existing structure?
Employees  New skills, knowledge, expertise, by existing staff?
 Importing skills or knowledge?
Customers  New marketing plans or other communication?
 Inform/help customers use new process?
Systems  New IT infrastructure?
 Significant changes?
 Document Design
 Refine
 PPA with Stakeholders

Redesigning Tips
 Focus on what’s important to the customer
 Don’t be constrained by current job titles, responsibilities, etc.
 If inputs tend to cluster, create separate processes
 Attack biggest time-wasters first
 Look for parallelism
 Question logic of current sequencing
 Remove reviews (reduces incentive to get it right)
 Eliminate signoffs /approvals (push decision making to lowest level)
 Simplify complex steps
 Involve as few people as possible in a process
 To identify bottlenecks, increase inputs and speed

Optimize Resources/Design Tools

Prepare for:
 New / changed roles
 New equipment / technology
 Need for new space
 IT support
 Training
 New management responsibilities and metrics3
Business Process Improvement, by Harrington

Chapter One – Why BPI?

Your customer embers you for two reasons:

 You surprise them with great service
 You provide poor service

ORGANIZATIONAL FOCUS PROCESS FOCUS

 Employees are the problem  The Process is the problem
 ‘I do my job’  ‘I get (help to get) thinks done’
 Measures individuals  Measures process
 Change the people  Change how we do things
 Motivate people  Remove barriers
 Control  Develop
 Who fucked up?  What allowed this to happen?
 Fix mistakes  Reduce variation
 Bottom-Line Driven  Customer driven

Ten Rules to Guide Change

1. The organization must believe that change is important and valuable to its future
2. There has to be a vision of the future state that everyone can see and understand
3. Existing and potential barriers must be removed
4. The total organization must be behind strategy to achieve vision
5. The leaders need to model process, set example
6. Training should be provided for new skills
7. Measurements should be established
8. Continuous feedback should be provided to everyone
9. Coaching must be provided to correct undesired behaviour
10. Recognition and reward systems must be established to provide encouraging consequences

During initial change, there is frequently major improvement. However, it soon drops back to previous performance if
there is no change in supporting management processes.

A crucial part of BPI is ownership – someone has to make sure activities interrelated.

The Objectives of BPI

 Make process effective
 Make process efficient
 Make process adaptable

Well-Defined Processes Have Common Characteristics

 Process ownership – someone is held accountable for performance
 Well defined scope
 Well defined handoffs
 Documented
 Measurement/Feedback close to point at which activity is performed
 Customer-focused
 Know cycle times

Goals:
 Eliminate errors
 Minimize delays
 Maximize use of assets
 Promote understanding
 Are easy to use
 Are customer friendly
 Adapt to customers’ changing needs
 Provide a competitive advantage
 Reduce/repurpose extra head count
Setting the Stage
 Steering Committee support
 Appoint a BPI Champion
 Educate Steering Committee
 Explain major steps of BPI
 Discuss – What makes us think we can succeed
 Identify critical processes
 Managing BPI Communications
Need to communicate:
 The need for improvement
 The concept of business processes, BPI
 Approach company is taking
 Individual, group responsibilities
 Select process owners

Criteria for a Process Owner

 Sense of ownership
 ‘Actual’ ownership (people, time, pain, gain in process)
 Power to act
 Leadership ability
(Credible, schedule driven, can direct a group, willing to embrace change, can knock down roadblocks, unafraid to
take risks, can handle poor performers)
 Process knowledge

Organizing for Process Improvement

 Set Process boundaries
 Diagram process
 Update operating assumptions
 Build Process Imprvement Team
 Train Team
 Develop Process Overview (SIPOC)

Customer Analysis
 Who receives output from process?
 What do they expect?
 How do they use output?
 What is the impact on them if it’s wrong?
 How do they provide feedback to supplier?
One of the biggest mistakes organizations make is they don’t take time required to set up Change Plan and get buy-in
from affected parties.

Effectiveness Measures
 Right output, at right place, at right time

First – Determine customer needs and expectations

Second - Describe needs in measurable terms
Third – Define how measurement data are collected
 Customer needs typically relate to:
 Appearance
 Timeliness
 Accuracy
 Serviceability
 Performance
 Reliability
 Usability
 Durability
 Costs
 Responsiveness
 Adaptability
 Dependability
 Customers always know what they want but can have a hard time expressing it in measureable terms
 The process needs characteristics documented in a specification so employees’ have a standard
 Agreed to by both supplier and customer
 Process team should work with customer
 Some ways to measure compliance-to-expectations
 Customer check sheets
 Feedback of customer sampling of incoming products/service
 Self-inspection
 Surveys / Focus groups / Interviews
 Monitoring complaints
 Customer Expectations should be detailed enough that anyone – familiar or not – should be able to judge if they’re
being met

Efficiency Measures
 Focus on use of time, money, resources
 We typically learn to live with poor efficiency, and we let it get words (adding checks and balances, etc.)
 Things to measure:
  Processing time
 Resources expended per unit of output
 Value-added cost per output
 Percentage of Value-Added time
 Cost of Poor Quality
 Wait time per unit
 Output per unit (e.g. miles per gallon, NVA vs. VA) – typically NVA=95 percent of process
So speeding up what we do doesn’t help
 Error-free process must be goal

Adaptability Measures
 Hardest to measure, first to be complained about by customers
 Traditional process is designed for average – most customers, most of the time
 A few ways to measure:
 Average time to complete special requests (vs. standard)
 Percentage of special requests denied
 Percentage of special requests escalated

Flowcharting
 Types:
 Block diagrams
(Can be annotated with names)
 Block flow
 Include information flow
 Flowchart
 Functional flowchart (swim lanes)
 Functional timeline
 Geographic
 Always start a block with a verb – make sure you’re doing something in the block

Flowcharts prepare people

 To see value of their performance, and how it affects others
 See what other people do
 Grows individual accountability
 Focuses on opportunity for change
Understanding Process Characteristics
Why Do Employees Deviate from the Process?

1. They don’t understand the procedures

2. They don’t know about the procedures
3. They think they have a better way
4. The documented process is too hard
5. They’re not trained
6. They were trained in a different way
7. They don’t have the tools
8. They don’t have the time
9. They were told to do it differently
10. They don’t understand why they should follow procedure

The only way to really understand is to walk the process

 The key is to understand the Should before hand

Helpful to prepare Pre-Walk-Through Questionnaire

 What are the inputs?
 How were you trained?
 What do you do?
 How do you know if your output is good?
 What feedback do you receive?
 Who are your customers
 What keeps you from doing error-free work?
 What can be done to make your job easier?
 How do you let your suppliers know how they’re doing?
 How is your output used?
 What would happen if you didn’t do this?
 Have you reviewed your job description?
 What would happen if your suppliers stopped providing you?
 What would you change if you were manager?

Immediately After Walk-Through, Team Should Meet and Document

Look for:
 Variation from Should
 Variation between employees
 Their suggestion for how to change
 Measurement points
 Need for documentation
 Roadblocks
 Duration and task time

Separate
 Occasional
 Chronic

Always review with interviewees!

Make sure to close loop with Information Sources during Implementation

 Log:
 Problem Statement
 Who ID’ed It, Date ID’ed
 Who Will Correct, Date Assigned
 Corrective Action, Date to Implement
 Follow Up

Process Effectiveness
For Customers
 How will process meets customer needs
(Outputs meet customer need, inputs meet process need)
 Processes can always be more effective
 Indicators it isn’t effective:
 Unacceptable output/Customer complaints
 Warranty costs
 Decreasing market share
 Backlog
 Rework
 Late Output
 Rejected Output
 Incomplete Output

Process Efficienc€€y
For Shareholders
 Efficiency Characteristics
 Cycle Time per transaction
 Resources per Unit of Output
 Value Add Cost as Percentage of Total Cost
 Cost of Poor Quality (per Unit)
 Wait Time (per Unit)
Cycle Time

The ttotal length of time required to complete entire process

 Actual always quite different from should
(Processing time is frequently <one percent of total duration)
 Four ways to collect Cycle Time info:
 End-point Measure
 Need large sample
 In- and out- stamps must correlate
 Info must be readily available
 Controlled Experiment
 (When above isn’t available)
 Introduce a sample and track it
 Don’t tell anyone what sample it is/when/etc. –so there isn’t special handling
 Historical Research
 Scientific Analysis
 When all else fails, break into smallest subprocesses available, estimate, and do the math
 Analyze: