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Process Improvement model

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Process Improvement model

2. Application of Process improvement Principles

1.
F E E D B A C K L O O P

Operational Analysis of process Who, what, how & where

3. Benchmarking

4. PDCA

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Process improvement principles

1. Waste Reduction

Process Improvement Principles

2. Process Simplification 3. Cycle-time reduction 4. Process measures 5. Mistake - proofing

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1. Waste reduction

The first step in improving a processes is to eliminate waste with the following techniques :I. Value-added assessment II. Eliminating non-value adding activities III. Minimize checks and inspections IV. Minimize administrative tasks V. Minimize storage and transportation activities

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I. Value added assessment

Value to customer : First, the customers view point should be considered. The customers are only interested in receiving the product or service that satisfies their requirements. All activities that must be performed to cater to the customers requirements are value -added activities.

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Does the activity add value to the customer ?

Would any customer care if the activity was not performed ? Would any customer object if the activity was not performed ? Do the customers appreciate the results of the activity?

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II. Eliminate non-value adding activities

Value to business : There are many activities that may not add value from the customers point of view. Attending meetings, developing plans, compliance with regulatory guidelines, writing procedures etc are examples of activities that may not add value to the customers, but they do add value to the organization. Each of these activities must be carefully examined.

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III. Minimize checks & inspections

Checks and inspections may be necessary in a process, however they do not add value to the process. Each inspection point should be identified and challenged. The next slide lists some questions to use in this challenge.

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What if the inspection was eliminated?

What if the inspection was eliminated? Would the inspection be missed? What is the potential impact in eliminating the inspection? What potential consequences exist if the inspection is eliminated? What is the likelihood that the inspection would have revealed a problem?

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IV. Minimize administrative tasks

Administrative tasks often result in delays in process time due to excessive paper work, levels of reviews and multiple signatures (mostly by people who, it seems, are never available when needed). Reviews, approvals, signatures, preparing written documentation, making and distributing copies etc needs to be thoroughly reviewed..

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V. Minimize storage and transportation activities

Sometimes storage and transportation are necessary evils but because they are both non-value adding they should be minimized. The purpose of just-in-time inventory systems to minimize the amount of inventory stored.

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Minimize storage and transportation activities

Transportation activities are also non-value adding. Often the relocation of single activity can significantly reduce the transportation requirements.

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2. Process simplification

Simplification means reducing the complexities of process. Simplification can lead to lessor activities and lessor things to go wrong. Process simplification can be done by combining similar activities and by analyzing decision points. Efforts should focus on reducing layers of management and structures that cause delays. Outdated systems and procedures need to be evaluated.

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Old Process
Visit Bank

Example of waste elimination: Cash withdrawal

New Process
Present Cheque Visit ATM Quality checks built-in

WASTE
Balance verification Withdraw cash

Collect cash

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3. Cycle-time reduction

Cycle-time is the time required to deliver a product or service to a customer. Long cycle-times not only prevent prompt delivery of product/ service to your customers, but also increase costs. One of the best ways to cut down on your cycle-time is to conduct activities in parallel and eliminate unnecessary waste times as demonstrated on the next slide.

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1. Activities Performed in serial

2. Activities performed in parallel

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4. Create and implement performance based measures

If the performance of any system or process is not measured, it can not be meaningfully improved. Quantitative and qualitative measures that address both objective and subjective elements should be implemented. The measures recommended are Revenue per employee, percent defectives, cost of quality, profitability ratios, customer satisfaction index etc.

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Incorrect performance measures create barriers

Profit
Strategies Sales Customer satisfaction

Build inventory

Many unfocused projects

Select low price supplier Performance measures

Efficiency variance

Many improved teams

Purchase price

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Correct performance measures

Profit
Sales Customer satisfaction Strategies Performance measures

Cycle-time

Cost of poor quality

Supplier quality

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5. Mistake proofing

Mistake proofing is a scientific technique for improvement of operating systems including materials, machines and methods with an aim of preventing problems due to human error. The term error means a sporadic deviation from standard procedures resulting from loss of memory, perception or motion.

For more details see Mistake proofing under M