Business Process Improvement Overview
Business process improvement initiatives are frequently key projects within an organization – regardless of the size of the organization or, frankly, the size of the business process improvement initiative. Even if a business process improvement initiative is targeted at an individual department, the impact of the change will be organization-wide. By ensuring that the initiative is managed as a strategic project, there are increased opportunities for success.
Process improvement initiatives are continuous. As organizations grow, they need to continuously analyze and refine their processes to ensure they are doing business as effectively and efficiently as possible. Fine-tuning processes gives an organization a competitive advantage in a global marketplace.
Process improvement is a strategy and a tool to help an organization meet its long term goals and objectives. One key goal for all organizations is to meet the demands of their clients – both internal and external. Clients’ needs change – whether due to economic factors, new product introductions, mergers or acquisitions, expansion or contraction. Continuously reviewing processes for potential improvements and efficiencies enables companies to adapt effectively to their clients’ changing needs.
Sometimes improving one process may inadvertently have an adverse affect on other processes. For example, let’s say a company changes its sales order processing. Once that process is improved, it becomes apparent that the improvement in that process has created a backlog in order fulfillment in the manufacturing department. A project management approach would address such issues as part of the risk planning, and the order fulfillment process would have been reviewed as an extension of the sales order process. Or, the initial project would have been assessed to determine if making changes to the sales order process would be beneficial to the company as a whole, given investments needed for other parts of the company.
The following graphic depicts a lifecycle of a process improvement initiative:
Although a project has a defined beginning and a defined end, in this graphic we are depicting a cyclical environment for continuous improvement. While this may be confused for ongoing operations after deployment of the initial process improvement project, it should, rather, be looked at as a separate project for each cycle of improvement. While monitoring is operational, once a need for improvement is recognized; a project with a defined beginning and a defined end and with set goals and objectives is established.
When process improvement initiatives are formally undertaken, by a project team led by an experienced project manager (experienced in process improvement-type projects), the following high-level overview steps will likely comprise the project work:
- Documenting the current process to be analyzed.
- Measuring the current process (gathering metrics) and developing a baseline. Metrics may be customer-based or organizational-based.
- Customer-based metrics may include:
- Customer satisfaction
- Service level
- Time to market
- Accuracy of customer orders
- Organizational-based metrics may include:
- Utilization of resources
- Manufacturing line utilization
- Cost per unit for development
- Customer-based metrics may include:
- Validating the documented current process and ensuring metrics are baselined appropriately.
- Setting new metrics for the process based on organizational long-term goals – e.g., one improvement may be to go from 85% customer satisfaction to 93% customer satisfaction over a 9 month time period or to reduce cost per unit from $25 per unit to $15 per unit over a one year time period.
- Analyzing the process as documented to make improvements.
- Design and develop changes to the process to ensure improvements as desired.
- This, along with documenting a process, can be the most significant amount of time on the project.
- Validate the design to the process.
- Implement the new process change.
- Review and measure the results of the new process change.
- Measure against baseline metrics in a designated time period.
