Basic Guide to Process Improvement: A Structured Approach to Optimizing Your Operation
The most successful companies are those that can continuously adapt to meet the changing needs of the consumer and their business. Optimizing business processes can be overwhelming, and it can be difficult to know where and how to start. However, problematic and stagnant processes ultimately cost companies money.
Inefficient or ineffective processes result in many different issues: excess turnover because of employee frustration; increased production costs as a result of defects and waste; lost customers due to long waits, miscommunication, or poor quality.
Likewise, optimized processes have many benefits: higher employee engagement and productivity; a streamlined operation with lower inventory costs, fewer required resources, and minimal errors; improved customer satisfaction, transforming loyal customers into brand advocates.
We can look to lean manufacturing and Six Sigma for a wide range of tools, techniques, and methodologies to improve business processes. Two of the most well-known frameworks for process improvement projects are PDCA (plan – do – check – act) and DMAIC (define – measure – analyze – improve – control). These each take an analytical, structured approach to process improvement, with slight differences between the two methods.
Following is a guide to process improvement, leveraging the key steps within PDCA and DMAIC, as well as other methodologies. The key takeaway is that improving your business is a continuous process, and the more defined the process, the better.
Decide which process you want to improve. Candidates with the most opportunity will typically have long lines or waits for customers, low profit margins, or a high number of customer or employee complaints. After selecting the process, the first step is to observe the operation in person. Create a process map or value stream map to document the process, including any possible variations. This ensures you fully understand the steps of the procedure and the required resources and people, as well as provides a document to ensure all team members are on the same page for which process is under review.
2. Aim and Define
Next, develop a SMART aim statement to define the scope of the project and articulate the mission. SMART stands for specific, measurable, attainable, relevant, and time-based. An example of a SMART aim statement could be “Reduce processing time for XYZ by 25 seconds by the end of Q3” or “Increase hourly throughput during peak hours by 10% at Restaurant ABC by May 31st .”
3. Plan and Analyze
After clearly defining the business goal of the project, develop a list of possible causes for issues and challenges. This list should be formed through a combination of direct observation of the process, interviews with multiple front-line operators and available data to determine the relative impact of each. Host a brainstorming session with key stakeholders and select front-line workers to create a plan of modifications and solutions, focusing on changes that are the most feasible with the highest impact. Including front-line employees in the planning process will help with change management upon implementation.
4. Test and Check
Pilot the selected changes in controlled, small-scale scenarios to identify problems and work out the details. Simulation can also be used to test changes in a virtual environment, particularly if pilots are infeasible or cost prohibitive. Gather results from the piloted change to analyze the effectiveness of the tested solution(s). Make any tweaks based on feedback from front-line operators. If needed, re-test the solution. Compare the expected gains to the aim statement to ensure solutions are on track.
Roll out widespread implementation of the optimized solutions. Depending on the scope of the project, a phased roll out may be the least disruptive and allow targeted focus during each phase of the implementation.
Process modifications are only useful if they are maintained. Develop controls to ensure any changes stick. This includes documenting the new procedures, updating training materials and standard operating procedures, and providing refresher training as needed. Continue measuring and reporting on the impact of the modification to keep it top-of-mind.
Processes can become out-of-date quickly, so it is prudent to regularly revisit, reanalyze, and improve procedures. This allows for continuous improvement of the operation, enabling an efficient operation for the long term.
Improving business processes can be a formidable challenge. Using a structured and analytical framework can provide a repeatable and scalable approach to solving these issues.
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