Reengineering efforts have companies in pursuit of
the promise of dramatically improved quality, service, productivity
and profitability. The most significant effect of this "reengineering
revolution" is the focus on—and the resulting increased
awareness of—business processes. The eighties saw a "Quality
Revolution" in the United States. American companies spent
many millions of dollars and effort-hours on Total Quality Management
(TQM) and Continuous Improvement. As the nineties unfolded, reengineering
came into vogue and again corporations continued to invest heavily.
Still, through all this, relatively little attention has been paid
to what could be thought of as the core basics: process optimization
is dependent not only on how a process is designed, but more so,
on how it is managed.
Every organization is a collection of processes—both
technical, and social in nature. These processes are the typical
business activities the company performs that produce value, satisfy
customer needs and generate income. There should be no doubt that
the management of a company’s processes is the key to the
organization’s success. As is true in football, even the best
playbook is worthless if execution is flawed. David A. Garvin, professor
at Harvard Business School reflected in a recent article, "When
a company has fixed its processes through TQM or reengineering,
it hopes to end up with superior processes. But those processes
still have to be managed. How they are managed will determine whether
the company realizes their full potential." Successful process
management requires continuous documentation, analysis and improvement
efforts to streamline and redesign in order to remain competitive
in a dynamic business environment. There are a number of highly
sophisticated business modeling and simulation tools available to
evaluate and manage an organization’s processes, but they
all must start with a thorough understanding of the basics: process
inputs, transactions, outputs and the interrelationships of each.
Once defined, we are able to:
1. Understand how processes interact in the company’s own
"business system."
2. Locate process flaws that are creating systemic problems.
3. Determine which technical process failures are caused by social
system failures.
4. Evaluate which activities add value for customers.
5. Streamline and improve work flows.
6. Identify processes that need to be redesigned and/or areas that
need to be restructured.
7. Improve efficiency and customer satisfaction.
When a process fails to perform as required we have a gap, a crisis,
a fire. All these terms imply a sense of urgency. The tendency for
most problem solvers is to look for the flame (gap) and to take
whatever action is required to extinguish it. For this we are praised
and rewarded; consequently, we have become extremely proficient
fire fighters. Unfortunately, extinguishing the flame does not necessarily
eliminate the flow of fuel that allowed the fire to erupt. Our quick
fix solves the immediate crisis, but adds a "work around"
or a "band-aid" to the process. These non-valued added
steps close the gap, but leaves the root cause intact. Band-aids
with time and under stress tend to fall off, leaving the organization
at risk. The fire returns and most likely it is when we can least
afford it. To eliminate the fuel, there are four steps to improve
the process: System Mapping, Process Flow Charting, Gap Origin Definition
and Gap Closure.
When output does not meet expectations, a gap exists. In a competitive
world, a small gap in customer satisfaction can quickly turn into
a large gap in market share. Rather than continued crisis managing,
the alternative is to isolate the source of the fuel. System Mapping
offers that possibility.
As part of the first step in System Mapping we broaden
our scope to encompass the entire business system - the combination
of our process plus our supplier’s that together yield our
customer desired outputs. When given a puzzle, most of us seek out
the edges and corners to establish the boundaries before we look
at the details. We then follow the typical problem solving flow:
• identify existing and/or potential performance gaps
• determine their origin
• prioritize them by the potential risk or opportunity they
offer
• develop solutions that either minimize or eliminate the
gaps altogether
• implement the solutions
• verify successful gap closure
Unfortunately, the "fire" tends to distract
us. We zero in on the obvious effect, rather than backing up and
looking at all the potential contributing causes. We try to guess
the nature of the puzzle without even knowing the scope of analysis
required. (This only human nature, we are rarely rewarded for watching
the fire burn, heroes are made by taking action - even if it is
the wrong action). But leaping before we look will at best result
in a waste of time and at worse, a temporary solution that creates
future failures. Before we get into detailed process de-composition,
we need to know where to drill - System Mapping provides the structure
and discipline to look holistically before we dive into the details.
System Mapping can be as broad as a corporate wide evaluation or
as narrow as a single department or individual. The methods and
intent are the same - create a clear understanding of why the system
is behaving the way it is and what steps can be taken to optimize
its performance. From here, we will focus on identifying the gap
root cause. The source could be internal to the company (due to
process design, execution or even organizational structure), caused
by our suppliers, or even a combination of the two. A more detailed
step by step analysis is required, process flow charting is then
the second step in Process Management.
Also called process mapping, the objective here is to clearly define
how the process functions: who does what when. The environment managers
need to operate their businesses is hardly stable and predictable.
Processes vary within the company due to a variety of factors: different
people with different skills operating under different managers
with different suppliers. Variation in the inputs frequently yields
variation in the output.
There are three types of processes:
1. Core Process: The primary activity that produces the output customers
purchase.
2. Technical Support Process: Includes the activities that influence
the core process performance.
3. Social Support Process: The activities that influence the workforce’s
performance.
Support process are just like the foundation of a building, they
tend to operate behind the scenes, they literally support the core
work that generates the product or service the customer is willing
to pay for, but they are generally considered overhead, non-proprietary,
are frequently neglected and often outsourced. Examples of support
process include: accounting, human resources, information systems
and maintenance. They are essential to the success of the organization,
but the customer does not identify them or their outputs as part
of their specifications. No matter how well designed and maintained
the core process is, a poorly built and maintained support system
will eventually collapse taking down the core process with it.
A thorough analysis and understanding of these process
segments will help to determine an organization’s stage or
state. Specifically, these stages include:
1. As Is - the actual process including all its inefficiencies and
non-value-added steps.
2. Should Be - the original design intent, a process absent of all
non-value-added activities.
3. Could Be - the theoretically possible, utilizing an "enabler"
and yielding quantum improvement.
The desired end-result of this process management activity involves
achieving gap closure. Selecting a successful strategy to close
the gaps is both a critical and difficult decision to make. At this
point, the company’s strategic options are either to:
Continuously improve existing operations, thus taking the organization
from the "As Is" to the "Should Be" process
state; or Redesign operations, radically altering the way work is
done. This will move the company from the "Should Be"
to the "Could Be" process state.
With these steps completed, the real question becomes "Does
this organization require incremental improvement (Continuous Improvement)
or a quantum jump (Business Process Redesign/Restructuring) in performance?"
The answer is dictated by your customers and competition. Customers
can be unreasonable and want the world, but if it is physically
impossible, then your attempts to satisfy them will drive you out
of business. If your competition is capable of satisfying this requirement
then you have no choice.
If the objective is to fully capitalize on available opportunities,
it is necessary to take into account not just what is theoretically
possible, but what is realistically feasible given the technological,
resource, capital and cultural constraints present. In his book
Innovation: The Attacker’s Advantage, Richard Foster describes
a technology "S-Curve," that reflects the benefit derived
as compared to the effort exerted when undertaking process improvement
initiatives. He suggests that, at least in part, the appropriate
action to take is dependent on the organization’s S-Curve
position, as well as its operational and organizational constraints.
At the top of the curve, the benefit derived via continuous
improvement is marginal as compared to the effort exerted. Because
of the limited gain, redesign or restructuring becomes the proper
course of action. However, redesigning a process is of limited value
at the bottom of the curve. In this case, continuous improvement
will provide a greater return on investment. Of course, the challenge
is knowing when the company is at the top of its "S-Curve."
Most successful companies undertake both continuous improvement
and business process redesigning concurrently. This is because one
never knows when the competition will innovate and leap to a totally
new technology curve, thereby changing the measures by which customers
gauge performance gaps.
Many people associate process mapping with basic flow charting.
There are a number of tools and techniques available and each captures
a different aspect of a given process. Proper tool selection depends
on three factors:
1. Audience - who you are trying to sell
2. Intent - why you are documenting
3. Gap - what is it a cost, quality, service or speed issue.
The area of concern; i.e., reducing cycle time, eliminating
flawed hand-off, optimizing resource utilization, determining activity-based
costing, selecting optimal material positioning, creating easy-to-use
problem-solving or decision-making procedures, and others. The tools
and techniques are not all created equally and it is necessary to
know the audience is and its skill level in order to develop the
appropriate process flow. Six of the most useful tools available
to help an organization map its processes are:
1. Top Down Flowcharts
2. Block Diagrams
3. Flow Process Charts
4. Work Flow Diagrams
5. Process Maps also called Cross Functional Flow Charts or Deployment
Charts
6. State Change Charts
Most documentation efforts still start out manually,
especially when undertaken by a problem-solving team. Fortunately,
a multitude of software packages are now available that improve
the ease of document creation, updating, tracking, visualization
and presentation.
Effective process management requires a clear appreciation of what
process or performance gaps exist on a broad systems-wide basis.
A system map provides this perspective and is the first step completed
as part of gap identification. Once identified, gaps are prioritized
based on the risk posed or opportunity present. Gap origins are
defined as part of process flow charting or process mapping. Selecting
the appropriate course of action to achieve gap closure is dependent
on both technical and social constraints.
An organization’s process improvement potential
is reflected by its technology S-Curve position. Depending on this
position, redesigning technical processes may also require a focus
on continuous improvement of social systems. The most successful
organizations handle these projects simultaneously.
A variety of process mapping tools and techniques
make it easy for process owners to visualize processes in their
"As Is," "Should Be" or "Could Be"
states. The challenge is knowing the audience objectives and skill
sets in order to select the "best" tool for process visualization.
Proper tool selection brings focus to critical process and performance
gaps, minimizes project startup pitfalls and ultimately leads to
successful gap closure. In this way, process mapping and—where
necessary—business process redesign can help an organization
realize its fullest potential.
Robert D. Boehringer is principal of N-Compass Consulting, a quality
and process improvement consulting firm based in Stamford, Conn.,
and national practice manager for Orion Development Group, based
in Rockaway Park, N.Y. In the past decade, he has conducted 500+
seminars and trained over 18,000 individuals from over 250 public
and private organizations around the U.S., Europe and Asia.
Prior to becoming a consultant, Boehringer’s work experience
includes positions at DuPont, Shell Oil, Procter & Gamble and
Pepsi-Cola. He has a B.S. in mechanical engineering from Cornell
University and is a member of the American Society for Quality,
Association for Quality and Participation, and Institute of Industrial
Engineers.
©2002 TABIC.
All rights reserved.
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