Operational Efficiency

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.

 

Basic Guide to Process Improvement
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    guide to process improvement
    1. Observe

    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.

    5. Improve

    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.

    6. Control

    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.

    In Conclusion

    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.

    How Can We Help?

    Schedule a free consultation to discuss your business needs.

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    How To Conduct An Efficiency Summit

    by Susan Dekker, Director, Integrated Insight

    Improving operational efficiency is a team effort. One way to identify these potential improvements is through an “efficiency summit.”

    What is an efficiency summit?

    An efficiency summit is a gathering of key stakeholders with the specific goal to identify opportunities to improve operational efficiency. This is accomplished through structured observations and data analysis.

    This is a concept found in “Lean” manufacturing under a slightly different name – a “waste walk.” The goal for a waste walk is to identify and eliminate any of the eight wastes: defects, overproduction, waiting, unused talent, transportation, inventory, motion, extra processing. But both “lean” and “waste” can have negative connotations among some, and this verbiage may act as a turn-off to front-line operators. While this concept comes from manufacturing, it can be applied to any system that services customers.

    Who should be there?

    Front-line operators are the most important representatives. Not only do they know the process better than anyone by living it day-in and day-out, but it will be crucial to eventual buy-in to have this point of view. Choose employees who are known for doing their jobs exceptionally well and open to change. Also include someone who knows the data systems well, as they can identify which aspects can be easily quantified with existing data.

    Management presence emphasizes the importance of the initiative to the company, but make sure any leader joining has an open mind and is visibly engaged (put the phone away!). Including a different operator who is unfamiliar with this particular process can also provide a “fresh eyes” perspective.

    What should you do?

    The first step is to observe the operation in person. Walk through each step of the process as if you were the product or the customer and discuss as a group what you see. Draw out a process map so everyone is on the same page in regards to operational flow.

    The next step is to collect data. Ensure everyone understands what the data means and how it will be used to identify issues. Example data could be transaction times, including noting if a delay occurred.

    Throughout the observation, write down any observed inefficiencies, pain points, or delays.

    What types of topics should be discussed?

    1. What is most confusing to the customer?

    Here at Integrated Insight, we always start with the customer perspective and understand the product through their eyes. Eliminating frustrations by changing the process or improving communication results in an improved customer experience.

    2. What are the most common errors or delays?

    This list can be used in a brainstorm session to ideate solutions both big and small.

    3. What is most frustrating about the process?

    Employees also get annoyed with an inefficient process. Identifying and reducing these frustrations can increase morale.

    4. If you had $1M to make any changes, what would you do?

    Too often we feel crunched by budgetary constraints, so we don’t even consider the major modifications that can truly transform a process. While the proposed change may appear to be financially unfeasible, the return on investment may determine it’s a viable option. Use the data collected previously to help analyze return.

    5. What operational changes have happened across the past several years?

    The operation has probably altered due to changes in technology, leadership, regulations, etc. Discuss how these adjustments have impacted operational efficiency and be sure to record the dates the changes occurred.

    What happens after?

    Use historical data to measure change, understand trends and see how productivity has improved over time. Compare this with the list of operational changes and dates.

    Take the list of common errors and delays, and brainstorm different solutions. Analyze the transaction time data recorded during the efficiency summit to determine the impact of each solution and quantify the potential value if this issue was reduced or eliminated.

    Create an action plan and report out on progress. Include multiple organizational levels on the communication to maintain visibility, emphasize importance, and ensure accountability.

    How Can We Help?

    Schedule a free consultation to discuss your business needs.

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    Building It Right The First Time: A Guest-Centric, Analytical Approach to Capacity Planning

    New experiences and facilities require a high upfront investment, and often are difficult and costly to adjust after building. And so, strategically building the right amount of capacity for the right guests can save a number of headaches later. This article lays out the major steps to planning capacity using a guest-centric, analytical approach.

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    Foundational Approaches to Achieve Operational Efficiency

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    Finding Operational Efficiency in a COVID-19 World and Beyond

    by Alexis Fiore, Consultant, Integrated Insight

    Many businesses planning reopening strategies have approached our team at Integrated Insight for help understanding how they can reopen safely while remaining profitable. In most cases, we find operational and design efficiencies that allow our partners to increase their capacity over their original plan.

    This is usually followed by the question, “Why weren’t we always running this way?” Major business disruptions like the current pandemic usually result in businesses taking a good look at their operation to try and find ways to do more with less. This has never been truer than now, when space is at a premium, and governments are placing arbitrary limits on the capacity of attractions.

    This article follows one of our recent projects where we used agent-based simulation to find a 14% increase in capacity for our client while still maintaining social distancing simply by redesigning the event.

    A client came to us seeking operational advice on how to re-open a long running walk-through attraction in a COVID-19 world. The initial scope of the project was to model the attraction as previously designed and then simulate the impact of changes to determine a layout that followed social distancing guidelines, while also optimizing attendance and revenue.

    Data is not always available due to closures or inaccurate representations of capacity. Because of this, we use a combination of operational subject-matter experts, available data, and our industry experience to develop detailed assumptions for group demographics, arrival rates, overall length of stay, operational flow, way-finding decisions, and dwell times throughout the attraction. All of these inputs, and making solid assumptions, are critical to building a robust model.

    Throughout the development of the model we received great input from the client operations team to ensure that the model accurately depicts the attraction experience. Once a valid model was created, we used our main evaluation metrics – instantaneous guest counts and time in queue – to determine that the points of interest (POI) in the attraction were front loaded. In previous years, up to 50% of the show content was placed in the first 30% of the experience. This created several problems:

    1. Overcrowding at the beginning of the show became a bottleneck.

    2. This bottleneck caused the queue to back up quickly.

    3. The unbalanced experience caused reduced capacity in the overall venue.

    Working closely with the operations team, our goal was to determine a few POI from the front of the experience that could be moved to a less crowded location without creating other unintended bottlenecks.

    To decide which POIs to move, and their new locations, we analyzed guest density heat maps from the simulation model. The images below show heat maps of original layout and the new layout of both the first and final segments in the attraction. The areas circled in red highlight the change in guest density with our recommended operational improvements.

    Sanitized-Heat-Map-for-Blog

    These changes substantially improved operational efficiency and we were able to run higher demand scenarios with the new layout. In addition, guests were able to spend a balanced amount of time throughout each house in the event. Based upon our estimated time in queue, we determined that additional queuing was not required as the current queue layout held up to 30 minutes of demand.  With timed-ticketing, the client would be able to ensure the queue never exceeded the available space.

    Making sure to maintain guest experience with the new layout of the event, the recommended daily capacity is ~40% of their pre-COVID peak day due to social distancing. This finding is notably lower than the typical government regulations mandating 50% capacity for an attractions operation. Opening at 50% of their peak capacity with no operational changes would likely have caused a public health hazard that could have produced negative press. Making these small operational improvements allowed the client to safely maximize their profits without impacting guest experience. Below is a clip of the simulation showing the attraction with the changes that improved operational efficiency.

    NYBG-Short

    Even with these operational improvements, we identified some areas of high guest density in the event where additional measures may be needed to mitigate congestion. By identifying these ahead of time, inexpensive strategies can be implemented to address these problem areas. This includes use of signage or ground markings guiding people where to view or wait for a popular attraction, designating a pathway through the experience where guests may pass other groups, or an employee monitoring the flow of guests through a high congestion area.

    Simulation modeling helped this client in a set of complementary ways to maximize event experiences for their guests. The advanced analytic techniques helped them better understand the capacity at which they can safely open their experience. The analysis also allowed them to increase their total revenue, via increased throughput, relative to their plan by making minor layout changes. While this work was needed because of COVID-19, the operational improvements have been available for years; we just needed the right tools to find them.

    How Can We Help?

    Schedule a free consultation to discuss your business needs.

    optimize restaurants coronavirus increase table turn time

    How To Maximize Restaurant Throughput By Minimizing Table Turn Time

    by Susan Dekker, Sr. Consultant, Integrated Insight

    The restaurant industry is beginning to open back up to dine-in guests with social distancing restrictions in place. This results in a limit to the total number of customers that can be inside the facility at one time.

    How can food and beverage locations maximize throughput given that they can’t serve as many people in the dining room at once? A restaurant should evaluate many different options, such as initiatives to fully develop the takeout and delivery experience. Another option may be to expand the typical meal periods to spread demand throughout the day. Still other possibilities include focusing on family meals, gift cards, or mobile apps.  Here we will focus on the most effective way to increase dine-in capacity in a space-constrained environment by minimizing table turn time to make the most of customers already at your door.

    Here are the three steps to optimize table turn time:

    1. Measure Your Baseline

    Total meals served is a function of the number of people in the dining room and how long it takes them to eat. Government regulations are still very much in flux, and the number of people in the dining room will likely be influenced by these rules. New sanitization procedures and changing guest behaviors may cause your table turn time to increase. Restaurant owners now more than ever need to be even more savvy to maximize total meals served.

    increasing table turn time restaurant

    The first step before making any changes is to understand your baseline. Map out each step of the process and time how long each of the steps take. If you’re unable to directly measure the process, consult with operators and servers to estimate these times. Some of these aspects are dependent on the guest (e.g., how long it takes to eat), but most are within direct control of the restaurant (e.g., how long until a busser arrives at a table after the party leaves). A process may look like this (a shortened version of the many steps involved in food service).

    table turn time graphic
    2. Optimize what you can

    After measuring your baseline, sit down with key team members to discuss what you see. Identify which areas you think you can influence without impacting guest experience or quality of service. The process may look something like this:

    Pre-Meal
    There are many best practices you can use even before a guest sits down. Reservations are always tricky, and may be a necessity in the post-coronavirus-outbreak world to manage guest arrivals. However, reservations can mean you’re holding an empty table for a party who shows up late, if at all. Don’t seat incomplete parties – this extends table turn time as it is longer until the guests place their entrée order. Balance new tables across sections to not overwhelm a single server with many new tables at once. Did section four just get the last three new tables? If so, maybe put the next party in section two.

    Now is a great time to evaluate your menu and remove items that are complicated to cook. Streamlining the menu has many benefits including reduced inventory and food waste, and also can improve table turn time. Optimizing the menu can both reduce the decision time for a customer prior to order, and shorten the cook time by eliminating complex meals.

    restaurant-waiter-standing-near-two-customers-vector-17099437 copy

    During Meal
    After the guests are seated, understand their expectations for the meal early on. Some customers are seeking an expedited experience, and will be pleased with quicker service rather than feel rushed. Consider asking questions like:

    “Is this your first time here?” – If they’re a repeat customer, they don’t need the typical run-down of the menu. You can just highlight key changes. They also will probably be ready to order quicker.

    “What brings you in?” – Do they have another commitment immediately after? Then they may be in a rush to finish.

    restaurant-waiter-standing-near-two-customers-vector-17099437

    Ensure an up-to-date menu is online. You can direct guests to view this menu on their mobile device as they are seated. This not only eliminates a contact point, but may also reduce decision-making time as a guest does not have to wait for a menu (and may even make a decision prior to arrival).

    While making rounds across tables, consolidate trips as much as possible. For example, bring waters when you walk to the table to take drink orders. While this tip sounds obvious, actually observe server trips. Spend an hour on a busy night timing how long a server spends walking back and forth. Specifically look for wasted trips or wasted motion. A few extra seconds to pick up a straw doesn’t sound like a big deal, but this time adds up when multiplied over hundreds of parties.

    Especially during non-peak periods, a server may have small downtimes with a few minutes of idle time. Have a list of non-time-sensitive tasks for servers, such as filling sauce containers or rolling napkins.

    Finally, consumer demand in the midst of the covid-19 outbreak may exceed the limited dining room capacity due to social distancing regulations. If so, consider fully eliminating steps from your table turn time. An example of this would be to only offer dessert to-go.

    After meal

    Paying the check is often one of the longest parts of the dinner experience, and for guests in a hurry, can be one of the most frustrating. Guest expectations are also changing because of coronavirus, so consider mobile payment terminals that can accept contactless payment. If you continue to use a traditional POS station, consider pre-printing guest checks to immediately hand over when appropriate.

    Reset tables as quickly as possible. Ensure each person understands their responsibility and leverage communication best practices to alert when a step is complete (e.g., who clears plates, wipes down, sanitizes, etc).

    Simulation

    We built a quick simulation to illustrate the impact of reducing table turn time on the number of parties a restaurant can serve.  If the peak dinner operation is assumed to be four hours, reducing the table turn time from 1 hour to 46 minutes (24%), allowed for a 28% increase in the number of tables served, or 21 more parties.  This change should allow the restaurant to increase their profits by more than 28% given the overhead of staff and facilities are held constant.

    how to increase table turn time in restaurants
    3. Standardize, Train and Sustain Employees

    Making lasting change needs buy-in from the staff. There is an easy value statement: More guests coming through in the same time period means more opportunity for tips. Increase buy-in by having the staff brainstorm and share their own tactics.

    Create a training plan to roll-out any standardized procedure changes, and include best practices that can be used at the server’s discretion. Make sure each person recognizes how their role contributes to the greater goal, and how roles interact.

    Set targets for how long certain steps should take, and regularly evaluate if you are hitting your table turn time goals. For example, track ticket times to see if servers are meeting the target time. If not, evaluate why and brainstorm actions.

    If you are the manager, be present during busiest times. The dinner rush is not the time to be doing paperwork in the back office. This gives you credibility among your employees that you actually understand the operation. You can also lend a helping hand to support if needed.

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    Schedule a free consultation to discuss your business needs.

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