3 Vital Process Improvement Tools You Need Now
How to Scale Your Growing Business By Redefining Processes
As your business grows, the old way of doing things simply won't cut it. You'll need to figure out how to make your processes and systems more efficient. No matter what industry you're in. Luckily, there are several process improvement tools out there that can help you drastically improve your business.
There are a lot of great tools out there for your organization. Whether or not you need them depends on what type of business you have, the data you're using, and what your overall goals are. Either way, you'll want to have these top 3 best process improvement tools in place to make your business more agile.
1. DMAIC and DMADV
This process improvement tool is one of the simplest to start with. While it's a simple acronym, it's especially useful for project-oriented organizations. In short, the tool can help you find ways to improve your existing product or service. It can also help you develop the new one if necessary.
- DMAIC stands for: Define – Measure – Analyze – Improve – Control
- DMADV stands for: Design – Measure – Analyze – Verify.
DMAIC and DMADV Explained in 5 Steps
- Define the problem or opportunity. You'll create a list of definitive goals with your team that the project hopes to achieve. This will keep you focused and make tracking the progress and success of your process improvements easier.
- Measure the existing process. Your team will create a list of agreed-on CTQ (critical-to-success) factors. These factors should be easily measurable goals.
- Analyze the available information on current performance. Look at how and why the current state is different from the desired state. Try and find the gaps and their root cause. You're trying to understand the inefficiency in its entirety here.
- Improve/Design the solution. Assess the possible ways to overcome the defined gap. A cost-benefit analysis should help find the options that work best. Next, the team should run an experiment or a pilot project to test the approach. Measuring the CTQs of the pilot is uber-important. This will help verify the success of your process improvements.
- Control/Verify. Make sure your new processes cascade throughout the relevant parts of the organization. You'll need a lot of communication to assure your staff embracing the process improvement. And if you're developing a new product or workflow, this stage serves as a point to verify with the client that the outcome meets their needs.
2. Fishbone diagram
Also known as the Ishikawa diagram, this famous process improvement tool helps businesses find the cause of a defined problem.
It’s also handy for brainstorming, allowing cross-functional teams to think of reasons why a particular business problem emerged. In most cases, there will be multiple factors. The teams will map out these issues at the “bones” of the fish on the fishbone diagram.
The process starts with a precise definition of the process improvement objective. The whole team needs to align on that point. As a next step, the moderator guides the group through various factors to discover the cause of the problem.
The classic approach to the tool uses a 6 or 8M Factor List:
- Mother nature
You can expand the list of factors to adjust the model to your organization.
Alternatively, you can change the list of the factors to work on projects not related to production. One of the great alternatives is The Marketing 7Ps: product, price, place, promotion, people, processes, physical evidence.
3. Value Stream Mapping
Value stream mapping is an advanced process improvement tool requiring a deep understanding of the methodology. One session can last up to a week. As a result, it best suits large organizations with complex processes involving different departments.
The idea is to write down every action within a process (down to the granular level), and assess whether or not it can be optimized or removed. To get a better overview of the tool, you may want to read this book on Value Stream Mapping.
Example Case Study for Value Stream Mapping
The following case is a very descriptive example from the Fast-Moving Consumer Goods (FMCG) market.
Tactical initiatives of the marketing department often lead to urgent requests for the additional volume of product that the factory cannot meet.
All the parties involved in the process improvement gathered to see the communication and production flows. The marketing department gets surprised when they learn that their promotion plans activated a large chain:
- Sales planning is changing the shipments forecast
- Production planning is changing the production forecast
- Procurement analytics is adjusting purchase orders for raw materials
- A similar process is launched on the raw materials supplier side
The supply chain representative learned that the marketing department is unable to plan out promotions eight months in advance. This is because most promotions are often reactionary to competitors’ actions or a result of opportunities arising in retail chains.
As a result, some of the steps were removed and the department leaders established a monthly marketing–supply chain alignment meeting. This helps shorten the lead time by 3 months.
Completed process improvement projects give the impression that the job is over. However, one useful habit successful business owners and managers can adopt that guarantees better results is to put in place is continuous process improvement practices.
Ultimately, as your business continues to grow and thrive, you'll need to be on the lookout for ways you can improve. With each workflow and process you streamline, your business stands to gain an advantage.
Why Your Business Needs Tools to Improve Processes
Every growing business faces challenges. But more often than not, these challenges come from inside the organization in the form of inefficient processes. And you may have already faced some of these issues:
- Frequent downtime
- Inter-departmental conflicts
- Long on-boarding for newcomers
- High dependence on personnel remaining in the same role
- Hard times understanding the status of ongoing projects
- Unpleasant surprises within the organization
- The necessity of detailed control over routine operations by management
Whenever a business owner faces these types of issues, they usually understand that it’s time to focus on process improvement. Unfortunately, in most cases, business owners and upper management have their hands full. Taking more time to review and optimize processes isn't always a realistic possibility.
The other important aspect is that process improvement is vital across your business, not just to fix broken workflows. The benefits are profound, however. You can reduce production waste, save time, and improving your own decision-making algorithms. And all of these translate easily into cash savings or additional revenues.
In the modern economy, this need to remain competitive is ever-growing. The competition grows stronger, the consumer expects more features and customizations, and new systems emerge every year that require smart integration.
All in all, the business world continues to grow increasingly complex. And it’s the duty of every business owner to counter that complexity with simplicity and efficiency within the organization.
A Detailed Process Improvement Project Example
To help you better understand how process improvement tools can help you scale and remain competitive, here is a detailed example of a project.
A large call center in California had a smooth and well-documented process of accepting calls. They had well-integrated IT systems and well-trained personnel. They even had were instructions for every possible situation an operator may face.
However, a further examination and mapping of their processes revealed that a significant chunk of operators’ activities did not bring value. Specifically, they were wasting time on tasks related to documenting the outcomes of calls. Documentation that was essential, but not something the customers were going to pay for.
**The solution was straightforward. **
They documented activities and deconstructed them to find repeating patterns. Then, engineers automated those workflows. As a result, the company reduced the time spent on documenting from an average of 22 sec to 2 sec.
This is a small improvement when evaluated independently. Now, imagine this task takes place after every call an operator makes (answered and unanswered). AND, imagine that the organization employs more than 1,000 operators.
Once you factor in those variables and the scale of this improvement, it's easy to see how this process improvement resulted in an annual savings of $5.5 million.
The initial investment in these types of results is reasonable. In this situation, the organization only needed to hire a process improvement consultant for three months. Outside of that, the consultant worked with a dedicated team of operators. This cost a temporary decrease in productivity for the company of 10 operators out of 1,000 they had on staff.
Process Improvement Methodologies
These process improvement ideologies both originate from the mass production sphere, and both quickly went far beyond factories. Both schools seek efficiency. But, the core difference between the two is the way they interpret inefficiencies.
Practitioners of lean process improvement focus on the removal of unnecessary steps in the process. They believe that an organization should focus only on the steps that bring value. In other words, they should focus on the actions the customer is willing to pay for.
Six Sigma practitioners focus on the removal of variations within specific steps. According to them, operational consistency significantly improves quality and reduces waste.
Nowadays, Lean Six Sigma is the modern school of thought for process improvement. It combines the best approaches of both originals. Plus, they don’t contradict each other. Instead, they offer different perspectives on the same business issue.
What Is Continuous Process Improvement?
Continuous process improvement is straightforward. It's the belief that there's always a place for improvement. Markets continue to change. Products continue to evolve. Organizations constantly generate data. To remain successful, you need to target an efficiency improvement pace that is higher than the pace of increasing complexity.
The key factors of continuous process improvement are the ability to run process improvement (PI) projects and the availability of infrastructure. We've talked about the projects before. Infrastructure stands for the following elements:
- Purpose: Team buy-in so the organization can improve processes more effectively.
- Process: A set of standardized approaches for running process improvement projects.
- People: Personnel with the right set of competencies to run the initiatives.
The more you think about ways to improve your business processes continuously, the more possibilities you can create. But at some point, you'll need to make decisions on which improvement project to start next.
How do you make that decision?
The classical solution to this problem is the Pareto Priority Index calculated by the simple formula:
PPI = Savings X Probability of Success/Cost X time to completion
This index will help you prioritize the process improvement initiatives.
Once you input your data, prioritization is simple. The higher the probability of success and the lower the time to complete, the greater priority for the improvement of that process.
You can improve your results in two ways:
- Learning through trial and error.
- Working with process improvement specialists.
What Is a Process Improvement Specialist?
Working with process improvement consultants can save your nerves and time. They'll ensure your process improvement initiatives end successfully, saving your business vital resources and keeping it competitive.
Benefits of working with Process Improvement Specialists:
- Experience from working in different business spheres. Process improvement specialists have a range of experience working with various industries they can lean on to deploy successful process improvement projects.
- Proficiency in technologies. Process improvement engineers handpick the right tools to streamline your business workflows.
- Minimal Disruption. Process improvement specialists understand that you have a business to run. That's why they design strategies and solutions that let you continue working with minimal disruptions.
- Track-record of success. Experience process improvement specialists know what to expect and how to avoid the common pitfalls many growing businesses face when trying to use process improvement tools.
- Customized Process improvement. You'll get a far more detailed action plan than the standard: Plan – Do – Check – Act cycle. Instead, your plan will help you maintain positive results while driving improvements even after the work has finished.
Team up with Process Improvement Consultants Today!
There are a lot of important variables to consider when conducting process improvement on your business. While there are a lot of great tools and methodologies out there, experience goes a lot further in helping your business stay lean and efficient.
And the best way to gain access to that experience is through trained process consultants.
See how we've helped our clients improve their businesses and get insane ROIs by checking out our case studies below.