Estimated reading time: 31 minutes
Process improvement is key to staying competitive in a changing world. At the same the ‘improvement in process’ topic can be overwhelming. This guide is written for managers that want to start with process improvement and need a basic overview of where to go for additional information and tooling.
Read this guide to get an intro to the following aspects of process improvement:
Process improvement is the systematic approach of identifying, analyzing, and enhancing existing workflows or systems to increase efficiency, productivity, quality, and overall performance within an organization. It involves the strategic application of methodologies, tools, and continuous refinement to eliminate waste, streamline operations, and achieve better outcomes.
So why care about improvements in processes? Because of many tangible business benefits.
Measurable business benefits from process improvements can show in various ways:
|An organization implements lean principles in its supply chain management, reducing excess inventory and streamlining logistics.
|Decrease in inventory holding costs by 20% within six months, leading to significant savings in storage expenses and better cash flow management.
|A software development team adopts agile methodologies and automated testing processes.
|Increased productivity by 30%, measured through a higher number of completed features or user stories per sprint, leading to faster product delivery and reduced time to market.
|A healthcare facility implements a Six Sigma approach to reduce medical errors in patient care.
|Reduced error rates by 50% within a year, measured through incident reports and patient feedback, leading to higher patient satisfaction scores and improved reputation.
Measuring improvements involves setting clear Key Performance Indicators (KPIs) aligned with the specific goals of the process improvement initiative. Whether it’s reducing costs, increasing productivity, improving quality, or achieving other objectives, having quantifiable metrics helps track progress and evaluate the success of the implemented changes. It also helps to build a business cases for management.
“Measurement is the first step that leads to control and eventually to improvement. If you can’t measure something, you can’t understand it. If you can’t understand it, you can’t control it. If you can’t control it, you can’t improve it.”H. James Harrington
So with a clear business cases which method should you use?
At its most basic level can be done via two basic methodologies:
Process reengineering (BPR)
Both process improvement and process reengineering aim to enhance organizational efficiency, but they differ in scope and approach. Here are some pros and cons of each:
It focuses on gradual, continuous changes, making it easier for teams to adapt.
Preserves Existing Processes:
It builds on current structures, often leveraging employee knowledge and existing systems.
Generally, it involves lower costs and less disruption compared to reengineering.
Encourages involvement from all levels, fostering a culture of continuous improvement.
Sometimes, it might not create significant breakthroughs or transformative changes.
Due to its incremental nature, the improvements might take time to yield substantial results.
Potential for Overlooking Big Changes:
It might miss opportunities for radical innovation by focusing on small-scale enhancements.
Offers the potential for major, transformative changes within the organization.
Can significantly enhance efficiency by redesigning processes from scratch.
Innovation and Breakthroughs:
Allows for thinking outside the box and adopting entirely new approaches.
Streamlining and Simplification:
Often simplifies complex processes, making them more straightforward and efficient.
|High Cost and Disruption:
It typically involves significant costs and can disrupt the organization’s operations.
Resistance to Change:
Employees might resist such massive changes, leading to implementation challenges.
Risk of Failure:
Due to its radical nature, there’s a higher risk of failure if not executed well.
Loss of Institutional Knowledge:
Reengineering might discard certain elements of existing systems, potentially losing valuable institutional knowledge.
Deciding between the two, it depends on the your specific needs, resources, and the extent of change required. In many cases, a combination of both approaches might be the most effective strategy, leveraging continuous improvement while occasionally implementing more radical changes for transformative impact – or following a reengineered process with continuous process improvement.
In the following, we will look at different examples and which basic methodology they used.
Examples of Gluu’s Process Improvement features
Map using five basic shapes for easier understanding by end users.
Users with the right role can pick and start tasks to show they are working on them. This also tracks value-adding time.
Here are three real-life examples of process improvement:
|A retail company faced overstocking of certain items while running out of others, leading to increased holding costs and missed sales opportunities.
|Implementing a just-in-time inventory system, analyzing sales patterns, and adjusting orders based on demand forecasts reduced excess inventory and minimized stockouts.
|Lowered holding costs, improved cash flow, and increased customer satisfaction due to consistently available products.
|A call center experienced long wait times and high call abandonment rates due to complex call routing and inefficient processes.
|Redesigned call flow, trained staff in problem-solving techniques, and implemented a new customer relationship management (CRM) system to provide agents with better information.
|Reduced wait times, increased first-call resolution rates, and improved customer satisfaction scores.
|A manufacturing plant faced high defect rates and long production lead times, impacting product quality and delivery times.
|Introduced lean manufacturing principles, implemented quality control measures at each stage, and reorganized the assembly line to reduce unnecessary movement and waiting times.
|Decreased defect rates, shorter lead times, increased productivity, and improved overall product quality.
These examples demonstrate how process improvement involves identifying specific problems within a process, implementing changes or new methodologies, and measuring the impact of those changes to achieve tangible improvements in efficiency, quality, or customer satisfaction.
With the ‘What’ and the ‘Why’ covered it is time to look at the ‘How’. Typically any process improvement initiative goes through seven steps:
Below is a short summary of the key process steps. For more details on this read our article on “Process improvement process steps“.
By following these steps, organizations can systematically enhance their processes, drive efficiency, and adapt to evolving business landscapes.
Engaging people in process improvement is crucial for successful implementation and sustained change. Here are some effective ways to involve and motivate individuals in the improvement process:
By implementing these strategies, organizations can foster an environment where people feel motivated, empowered, and engaged in contributing to continuous process improvement.
👉 Recommendation: Prioritize a culture of engagement and empowerment for process improvement. Ensure clear communication, leadership involvement, and employee empowerment. Foster collaboration, offer training, and recognize contributions to create a sustainable culture of continuous improvement.
Below I will show you and example of a continuous process improvement process that encompasses all domains of change:
Mastering process improvement as an organization requires a strategic approach and a focus on key success factors. Here are five critical factors that contribute to success in this endeavor:
These factors interplay and reinforce each other, forming the foundation for successful process improvement initiatives. When organizations prioritize these critical success factors, they create an environment conducive to mastering process improvement and driving lasting positive change.
👉 Recommendation: To master process improvement, prioritize leadership commitment, employee engagement, clear goals, robust processes, and a culture of continuous learning. These five key factors, when integrated into your organization’s approach, will pave the way for sustained success in process improvement efforts.
Mastering process improvement is not merely a goal but a journey that requires a holistic and strategic approach. By placing a strong emphasis on leadership commitment, actively engaging employees, setting clear goals, implementing robust processes, and fostering a culture of continuous learning, organizations can navigate this journey with confidence. These five key factors serve as the cornerstones of sustained success, ultimately leading to enhanced efficiency, innovation, and competitiveness in today’s dynamic business landscape. Embracing these principles will empower organizations to evolve, adapt, and thrive in an ever-changing world.
The main methodologies are structured approaches to enhancing business processes. Six Sigma focuses on reducing defects and variations, Lean aims to eliminate waste, TQM emphasizes continuous quality improvement, BPR involves radical process redesign, Kaizen encourages small incremental changes, and Agile prioritizes flexibility and collaboration in development processes.
It involves a systematic approach to making processes more efficient and effective. It starts with defining the process and its objectives, measuring its current performance, analyzing data to identify issues, making improvements (like streamlining steps or adopting new technologies), and implementing controls to sustain the improvements over time.
It holds significance due to its role in enhancing efficiency, reducing costs, improving quality, maintaining competitiveness, fostering adaptability, promoting innovation, ensuring compliance, and engaging employees.
https://www.youtube.com/live/lhPrjcAoMt4?si=mKA__T1oxftmFAW8 Join us on Tuesday, February 27, at 3:00 PM CET Join our webinar and…
In this new year's special, you'll get an overview of the key features that we…
Discover four compelling process improvement examples that offer valuable insights and lessons to learn from.
Discover the essential steps to enhancing your company's efficiency with our comprehensive guide to process…