Pillar of Operations Improvement – Business Process

This is the second of a four post series. You can read the first introductory post here:

3 Pillars of Operations Improvement

Generally the most obvious pillar of continuous improvement in businesses is that of the business process.

Most large and many smaller companies have some sort of continuous improvement team that use methodologies such as:

  • Lean – eliminate waste and create perfect flow through an organization
  • Six Sigma – eliminate variation and track business “defects” statistically
  • Theory of Constraints – balance and optimize all business activities to match the capacity constraint

There are others, but at a very high level they are all different ways of attacking the steps, or activities, that a business must go through to complete its business cycle. These methodologies generally began exclusively in manufacturing, and an example of a process could be as follows:

  1. Cut raw materials to widget shape
  2. Assemble widget components
  3. Paint widget
  4. Package widget for sale

Recent Project Example

However, continuous improvement efforts are easily adaptable to service organizations, sales, and back office / administrative processes as well. For example, on a recent project I worked with the IT department at a major financial services firm. One of the processes that we worked to optimize in their group was as follows:

  1. New employee accepts employment offer
  2. HR requests computer & phone set-up for new employee
  3. IT sources equipment from vendor
  4. IT sets up equipment for new employee…

This was an important process for them to improve because the new employees were typically highly paid and were very reliant on their computer being ready to go on day 1.

An example of a Lean principle that was used in this project was when the IT employee set up the new computer they would often load software that was unnecesarry for the new employee. This is an example of waste, and we developed a clear standard for determining what software was to be loaded for any new employee based on their position.

An example of a Six Sigma principle that was used in this project was when the HR team requested the equipment set-up from IT, the request came through variable channels. Sometimes HR would call the IT Tech, sometimes HR would email the new employees manager who would then ask the IT manager, etc… This variation led to confusion in HR, IT, and the rest of the business over who was actually responsible for arranging the new employee’s equipment. We eliminated this problem by mapping a clear process and communicating it throughout the organization.

Common Process Misconception

My clients in the past have often said “this group doesn’t really have a process so I guess this methodology will not work.

However, I have yet to find a business function that does not operate on a repeatable process. Some of the more common functions that businesses perceive to be process independent are Engineering, R&D, and Project Management. So, let’s have a look at these:

Common Engineering Process:

  1. Gather product requirements / limitations
  2. Draft product drawings
  3. Determine product materials
  4. Create prototype…

Common R&D Process:

  1. Research market data
  2. Identify market opportunity
  3. Brainstorm product to capture market opportunity
  4. Pass on to engineering…

Common Project Management Process:

  1. Identify project need
  2. Set project schedule / budget / expectations
  3. Project kickoff
  4. Project activities
  5. Project reporting / checkpoints…

To drive continuous improvement in Business Process, the key is to remember that any business function is made up of a set of activities that need to be completed, and when analyzed there is always opportunity to eliminate waste, reduce variation, and / or balance the workload to improve the overall operations.

Continue Reading 3 Pillars of Operations Management:

  1. Part 1 – 3 Pillars of Operations Improvement – Introduction
  2. YOU ARE HERE – Part 2 – Pillar of Operations Improvement – Business Process
  3. Part 3 – Pillar of Operations Improvement – Management Tools
  4. Part 4 – Pillar of Operations Improvement – Management Behavior

Looking forward to discussion in comments,

Rick Maher

0 comments… add one

Leave a Comment