| INTRODUCTION | | | | |
| | | | - Analyze process inputs and outputs--Study inputs |
| Objective: | | | | and outputs to see if they are appropriate and what |
| | | | improvements could be made. Also decide if the |
| - To help enable process improvement for better | | | | cycle time is acceptable for competitive purposes, |
| performance-do it better, cheaper, faster. | | | | regardless of how easy or difficult it would be to |
| | | | improve it. |
| Would you like a simple, effective approach to | | | | |
| process improvement? This is a generic method for | | | | - Estimate Improvements-For principal metrics. Do |
| almost any type of process and is intended as a | | | | this at the start and again after the internal process |
| guide of things to do, rather than an in-depth tutorial. | | | | has been analyzed. For each one of the performance |
| Because it's generic, it doesn't contain | | | | improvements, write up how you will accomplish it. |
| discipline-specific technical advice. While it outlines a | | | | When work actually starts on improvement planning, |
| methodical approach, we also encourage creativity in | | | | other ways will be probably also be found. |
| concert with it, because the biggest breakthroughs | | | | |
| happen when method and creativity find a way to | | | | Now you're ready to look at the internal process |
| co-exist. | | | | steps. . . |
| | | | |
| This article first defines key terms, then discusses | | | | Internal to the Process |
| how to improve inputs to the process, the process | | | | |
| itself, and wraps up with some "lessons learned" | | | | Analyze the overall process flow, preferably using |
| advice. Although production and manufacturing terms | | | | pictorial charts and problem identification techniques. |
| are employed, nearly everything herein works for | | | | Repeatedly walk through the process physically with |
| service businesses and office operations. It is | | | | employees, customers, suppliers, consultants, |
| currently fashionable to say that value is only added | | | | objective bystanders and learn all you can about |
| on the factory floor, but little would happen on its | | | | what is right and wrong. This seems to work better |
| own without the intelligence value-added of such | | | | when one performs the external steps first. Look for |
| "non-value- added" activities as marketing, selling, | | | | continuity, search for gaps or redundancy, delays and |
| planning, designing, contracting, buying, shipping, etc. | | | | defect generation. It helps to do a map of the area, |
| The "value-added" concept needs expansion beyond | | | | superimposing activity, paper and material movement. |
| the narrow realm of production that it is now so | | | | |
| myopically focused upon. | | | | Finally, it is also helpful to prepare a summary of |
| | | | activities chart, showing: responsible person, cycle |
| DEFINITIONS | | | | time consumed, delays, inspection, movement, |
| | | | wasted time, defect generation, process Takt time, |
| Process | | | | value-added component, non-value-added, probable |
| | | | reduction and whether step is needed under current |
| - A process is a collection of related activities that | | | | conditions, wait time, defects produced, resources |
| adds value to a product or service, that a customer | | | | consumed, applicable policies, procedures and |
| would be willing to pay for. A process accomplishes | | | | instructions. The number and complexity of |
| specific objectives. Products consume processes, | | | | worksheets used is a function of the complexity of |
| which consume activities, which consume resources, | | | | the process and the mindsets of those in charge. |
| such as money, manpower, material, and machine. | | | | Space limitations don't allow us to show you enough |
| They may also require information, in the form of | | | | samples. |
| specifications, instructions and schedules." - George | | | | |
| Miller, PROACTION | | | | See if the broader, overall process, or even parts of |
| | | | this process are interfering with the portion you are |
| - A collection of activities that takes one or more | | | | working on. For example, in a recent project, a |
| kinds of input and creates an output that is of value | | | | company discovered that its order picking |
| to the customer." - Hammer and Champy, in | | | | effectiveness was being severely hampered by |
| Reengineering the Corporation | | | | improper stock and record keeping practices that |
| | | | eroded inventory record accuracy. This prompted the |
| Typical potential process improvement areas are: | | | | company to properly redirect its energies on |
| | | | improving this critical upstream activity first. Redo |
| - Speed | | | | Figure 6 when you are done, including the additional |
| - Cost/Return on Investment/Assets | | | | "how-to" write-ups. |
| - Quality | | | | |
| - Flexibility | | | | Focus on eliminating defects, problems and |
| - Product Innovation/Improvement | | | | constraints. |
| - Compliance/Safety | | | | |
| | | | Rather than detail planning, followed by a "big bang" |
| And will help enhance: | | | | implementation of changes, it is desirable to test and |
| | | | incrementally implement new changes. In the case of |
| - Profitability/asset return/shareholder value | | | | radical process change, this is not always possible, |
| - Customer service | | | | although prototyping and parallel operation can help |
| - Market share | | | | alleviate the risk and pain of major change. |
| - Reputation | | | | |
| | | | - The performance of a process may often be |
| Select from the targeted improvement areas above | | | | improved without a change to the process itself, but |
| to support your company/project strategies. The | | | | just by better clarification, training, measurement or |
| most critical areas should have "metrics" to track | | | | emphasis on it. |
| performance and possibly, targets. | | | | |
| | | | - Tips for organizing a process: |
| Excellent processes have or utilize: | | | | Determine WHAT is to be accomplished and WHY |
| | | | first, before determining HOW, WHEN, WHO and |
| - Mission | | | | with WHAT, pretty much in that sequence. This can |
| - Objectives, Metrics | | | | best done correctly by putting the process in |
| - Responsibility-- who is in charge of process to see | | | | perspective with the overall enterprise, business unit |
| that it is right | | | | and workflow. |
| - Resources, such as: | | | | |
| - Material | | | | - Internal Process Improvement Checklist |
| - Manpower | | | | Here is a list of improvement ideas to help out. Keep |
| - Energy | | | | in mind that some of these are radical and may |
| - Equipment- machinery, tools, technology | | | | require planning and coordination. For example: don't |
| - Information- specs, direction, instructions, | | | | eliminate inspections of nuclear pressure vessels |
| procedures, software, schedules | | | | without some overarching quality strategy in place, |
| - Activities | | | | along with customer and regulatory approvals! |
| - Cycle Time | | | | |
| - Inputs | | | | - Identify or assign process "owners" and |
| - Outputs-- Products, by-products, waste | | | | accountability for implementation of improvements |
| - Defects (even excellent processes usually have) | | | | and ongoing performance results. |
| - Policies/Procedures | | | | - Compress time, do things faster and cheaper, by |
| - Tools/Technology | | | | overlapping operations, eliminating hold points and |
| | | | inspections, scheduling better, eliminating capacity and |
| Do yours have these? Make sure their availability and | | | | defect bottlenecks. |
| quality are addressed in your process review. | | | | - Eliminate non-essential activities. |
| | | | - Eliminate non-value-added assets, such as excess |
| VALUE-ADDED ACTIVITY (VAA) | | | | inventory, space or unneeded equipment. Some say |
| | | | this is impractical, because the assets are already |
| Activity/cost that actually increases the value of a | | | | there and the money is spent, but they might be |
| product or service in a customer's eyes. Fabrication | | | | sold, scrapped, transferred, leased or converted, with |
| and assembly are examples of this category. The | | | | some thought. For instance, a company had four |
| ideal process consists of only Value-Added Activities | | | | factories, with much unneeded space. Employees |
| | | | were encouraged to consolidate layouts, move out |
| NON-VALUE-ADDED ACTIVITY (NVAA) | | | | unneeded assets, rope off unused spaces and place |
| | | | "FOR RENT" signs on them. Result from this and |
| Activity/cost that does not increase the value of a | | | | other actions: Plants were consolidated, one plant |
| product or service in the customer's eyes. Example: | | | | closed and employees transferred, some to better |
| storage. Decide if the activity is needed at all, is it | | | | jobs, remaining plants saved from closure. |
| duplicated anywhere, can it be done better or | | | | - Do activities in parallel or other optimized sequence |
| differently? Can the timing, method, material, | | | | to get high resource utilization while reducing cycle |
| equipment, speed, training, technique, setup, | | | | time. |
| specification be altered to improve the results? An | | | | - Reduce queue, move, setup, inspection, storage, |
| activity may be all value-added, all non-value-added, | | | | wait/administrative time. |
| or a mixture. Certain non-value-added activities may | | | | - Time-phase improvements to improve payback |
| still be needed, such as a storage requirement due to | | | | while reducing risk. |
| a capacity imbalance or a wait for a required | | | | - Eliminate bottlenecks, which might be inadequate |
| inspection. Customers may see value in some of | | | | capacity, excessive setup time, bureaucratic check-in |
| these activities, if only to "Band-Aid" a weak process. | | | | out or approval procedures, etc. |
| | | | - Reduce defects, through awareness programs, |
| NON-VALUE-ADDED ASSET | | | | personnel screening, process training, set-up training, |
| | | | equipment tune-ups/maintenance, rebuilding |
| Non-productive asset. Assets kept working are | | | | replacement, poke-a-yoke approaches, revised |
| more productive, but only if the output is actually | | | | material specs, better screening, reworked tooling, |
| needed and soon. The classic asset misuse is | | | | redesigned processes. |
| "keeping machines or people busy" even though the | | | | - Reduce capacity constraints/bottlenecks. |
| results aren't needed. This wastes investment by | | | | - Reduce number of required approvals, sign-offs. |
| inflating inventory, tying up material, space, capital, | | | | - Reduce steps, complexity, in general. |
| manpower and equipment resources. It is often | | | | - Reduce number of hand-offs. Reduce number of |
| aggravated by misapplication of metrics. For example | | | | organizations, people, facilities involved- Change |
| a production manager who is measured by raw unit | | | | organization and facilities to fit the desired process if |
| production "efficiency" measures is likely to commit | | | | feasible. |
| this "sin." If assets cannot be kept productive under | | | | - Increase flexibility- avoid "hard wiring" the system, |
| this rule, then divestiture, replacement or outsourcing | | | | design it for change. |
| should be considered, as feasible. New metrics may | | | | - Use standardized approaches, "packaged" solutions, |
| also be needed. | | | | where practical. |
| | | | - Simplify design of product, process, tooling, |
| CYCLE TIME | | | | equipment. Use the simplest product, process, |
| | | | equipment, tooling design that will get the job done |
| The total elapsed time to produce one unit. This | | | | effectively. Only automate/make significant |
| includes all delays including elapsed set-up, queue, | | | | investments when significantly higher productivity, |
| move, inspection, rework and also the actual | | | | quality or speed will result. Beware of expensive |
| processing time. Typical processes have 60-95% idle | | | | investments that cannot be recovered, or result in |
| time, while product is not actually being worked on. | | | | losses of money or flexibility when volume, mix or |
| Therefore the greatest cycle time reduction | | | | design changes. Keep it flexible! |
| opportunities are normally, but not always, in delay | | | | - Try to modularize the new process design. Design |
| time. Lost time may be recovered by balancing | | | | process/business "objects" that are self contained in |
| operations, reducing: storage time, handling, waiting | | | | what they do, that can easily be linked to other |
| for approvals, queues, handoffs, inspection, etc. | | | | activities or processes and redesigned without having |
| Shorter cycle times usually improve competitiveness | | | | to "rewire" other activities or processes. They ideally |
| by cutting costs and response time. | | | | should be reusable and interchangeable elsewhere in |
| | | | the organization, system, maybe even in other |
| WORK TIME | | | | organizations. |
| | | | - Throw away functional organization charts and |
| Time required or spent actually working on the | | | | functional space layouts. Make the organization chart |
| product. | | | | and layout fit the process, not vice versa. This make |
| | | | take significant time, planning and internal |
| TAKT TIME | | | | salesmanship. |
| | | | - The amount of time and trouble to accomplish |
| Interval of time for each unit to be completed-the | | | | needed changes is almost inversely proportional to |
| rate of production. A product may have a 2-hour | | | | the support, strength and competence of the people |
| cycle time, but have three 20-minute operations and | | | | responsible for approving and making the changes. |
| one 30-minute operation. One unit comes off the line | | | | Get the best and most adaptable people you can |
| an average of every 30 minutes. Resources and | | | | afford. You can't afford weak people. |
| work content should be allocated to adjust Takt | | | | - Employ cheaper materials, or maybe even better, |
| Time to the desired rate of production. | | | | more expensive materials that reduce defects, |
| | | | improve quality, reduce overall costs. |
| DEFECT | | | | - Reduce costs (most of the above reduce costs). |
| | | | - Use OPM (Other People's Money)- "leverage" their |
| Anything about the product which is legitimately not | | | | inventory, capital equipment, technology, organization, |
| acceptable to the customer or internal authorities | | | | knowledge. |
| (normally, but not always, documented in | | | | - Set up supplier partnerships/contracts. |
| specifications). Defects result in added cost, lost time | | | | - Outsource where practical, in-source where you |
| or lost utility of the product to the customer, as well | | | | are clearly better. |
| as delays in response time, wasted inventory and | | | | - Use consultants, where it makes sense. |
| capacity. | | | | - Utilize professional and trade associations contacts, |
| | | | services and body of knowledge, to learn better |
| PROCESS CAPABILITY | | | | methods, find and train better people, locate helpful |
| | | | people and organizations. |
| The ability of the process to meet the desired | | | | - Use schools, colleges and universities, when they |
| quality and speed at an acceptable cost. | | | | can deliver useful knowledge. |
| | | | - Brainstorm, get outside opinions from almost |
| METRIC | | | | anyone you can-employees, managers, mad |
| | | | scientists, poets, writers, freaks, even customers! |
| Important performance indicator to be measured. | | | | |
| Examples: Inventory turns, cycle time. Metrics should | | | | Selectively Employ: |
| be meaningful to the level of the people held | | | | |
| accountable. For instance, "average plant level cycle | | | | - Policies/Procedures |
| time" is not meaningful to a team responsible for | | | | - Checkpoints |
| assembling a certain model computer disc drive. They | | | | - Controls |
| need their own metric. | | | | - Auditing, Checking |
| | | | - Metrics |
| CELL | | | | |
| | | | ... because these are "non-value-added" activities that |
| Production unit designed to make one product | | | | should only be used as needed. |
| service line or process. Ideally, all resources needed | | | | |
| to complete a product or process are contained in | | | | LESSONS LEARNED |
| the cell. Cells may be arranged as component | | | | |
| assembly feeders to final assembly test cells. | | | | A. 80% of the improvement task is selling it and |
| Functionally-oriented cells have resulted in | | | | getting peoples' support. |
| improvements, but product or process cells have | | | | |
| generally shown superior results. | | | | B. Organizations resist change, no matter what they |
| | | | say. Certain individuals may help or even lead, but |
| WASTE | | | | many people will slow down, stop or even reverse |
| | | | improvements unless they are properly trained, |
| Any portion of an activity performed, resource | | | | motivated and led. Focus on education and change |
| assigned or utilized that is not absolutely essential to | | | | management more than technical improvements. |
| meeting the mission/objectives of a legitimate | | | | |
| process. | | | | C. Talk to people first. Soften them up before the |
| | | | big push. People who are your friends are more likely |
| LEAN MANUFACTURING | | | | to help you, simply because you are familiar and they |
| | | | like you. Find out what thy want/need and help them |
| Manufacturing process with as much waste as | | | | if possible. |
| possible eliminated. A Lean Manufacturing manifesto | | | | |
| and body of knowledge has been created and is | | | | D. Try to hire, transfer, or borrow like-minded |
| available through the Agility Forum. This is having a | | | | people. It's often easier than trying to convert them. |
| profound influence on current thinking. | | | | |
| | | | E. Simple systems usually work better than complex |
| INPUTS TO THE PROCESS | | | | ones. |
| | | | |
| External to the Process | | | | F. People are more accepting of change when you |
| | | | take the mystery out of it and show them what's in |
| Don't jump right into the detailed guts of the | | | | it for them. |
| process. Start at the top, with the product or service | | | | |
| to be provided. Make sure it is defined to meet | | | | G. People are much more accepting of change when |
| customers' expectations-technical specifications, | | | | you can show it working somewhere else, preferable |
| service requirements, quality and pricing. First make | | | | nearby and full-scale. |
| sure you're working on the right process, with the | | | | |
| right objectives! The biggest, easiest improvements | | | | H. Teams and consensus are great, but strong |
| often occur right here, before even getting into the | | | | leadership still has its uses. |
| actual process in question. | | | | |
| | | | I. Constant repetition and leadership by example are |
| "Frame the process"-Look at things external to the | | | | needed. Don't think that you can simply state the |
| process first. Before you do anything, make sure you | | | | mission, objectives, conduct a brief training session, |
| know what you need the process to do. There | | | | then come back in a couple of months and reap rich |
| should be a clear, simple, strong overall mission | | | | rewards. This war will consist of multiple campaigns |
| statement. Examples: "Eyeglasses in one hour," | | | | and many battles. There will be resistance, |
| (Lenscrafters) or... "When it [your package] | | | | indifference, confusion, conflicting priorities |
| absolutely, positively has to be there overnight." | | | | philosophies, even outright opposition, or worse yet, |
| (FedEx). Don't waste time improving the wrong | | | | covert opposition. Persistence and determination are |
| process with the wrong mission or approach. As you | | | | called for! |
| break the process down into lower levels of detail, | | | | |
| each piece may not satisfy the overall mission | | | | J. The process improvement methodology can be |
| statement, but it should be clear what role it plays in | | | | straightforward. There are other approaches besides |
| doing that. Accomplish this by formulating simple | | | | this one. Some will yield better results, but may |
| objectives for each piece. | | | | require much more skill and complexity. The |
| | | | methodology is only a framework. Technical expertise |
| The mission statement potentially has enormous | | | | and creativity are also needed. Beware of either |
| power to improve the process. For example, a while | | | | letting "industry experts" drive the solution down the |
| back, we were brainstorming the warehouse | | | | same old roads and also letting those ignorant of |
| "process" with a client. The "owner'" of the process | | | | industry lessons learned move into naive approaches. |
| stated that her "mission" was to receive material, | | | | |
| move it to inspection, store it, issue it to production | | | | K. Imagination and creativity are needed for best |
| on work order kits when requested, replace | | | | results. The folks who were determined to deliver |
| shortages and rejections, move finished goods to | | | | packages overnight, provide a computer for "the rest |
| inspection and stores and "generate paperwork" | | | | of us", sell books over the Internet, invent the |
| (how's that for a mission?). After much discussion, | | | | Internet, provide eyeglasses in one hour, had real |
| the new mission agreed upon was to ensure that | | | | vision (no pun intended) and enriched life for many. |
| material was safeguarded, provided to production as | | | | |
| needed and then accounted for. This triggered a | | | | Process Improvement Examples |
| flood of changes, questioning the very existence of | | | | |
| warehouses, inspection, work orders, kits, etc. The | | | | When this session is presented live, workshops |
| company ended up starting to certify key suppliers, | | | | examples are offered to illustrate the points made |
| using supplier-managed inventories, eliminating most | | | | herein. If you're reading this, why don't you try the |
| work orders, using kanbans, pull systems, point of | | | | ideas out on your own with an actual case, |
| use storage and much smaller warehouses, inspection | | | | preferably a simple one to start with--one that |
| and overhead. | | | | people agree needs great improvement? |
| | | | |
| - Decide on scope of change, process boundaries. | | | | REFERENCES |
| Are you reengineering the whole company, one | | | | |
| process, several products, a department? Are you | | | | Reengineering: 40 U$eful Hints," George J. Miller, |
| looking for a complete redesign or major | | | | APICS XX International Conference Proceedings, |
| improvements in the current approach or just | | | | APICS, Falls Church, VA |
| incremental enhancements? | | | | The Process Reengineering Workbook, Jerry L. |
| | | | Harbour, 1994, Quality Resources, NY, NY |
| - Formulate objectives and metrics--Preferably | | | | Reengineering Your Business, Morris & Brandon, |
| quantifiable and measurable. More important ones will | | | | 1993, McGraw-Hill, NY |
| be assigned quantifiable metrics, such as cycle time | | | | Reengineering the Corporation, Hammer & Champy, |
| minutes, or defects for significant attributes. Don't | | | | 1993, Harper-Collins Publishers, NY, NY |
| set them and measure them unless they are | | | | Business Process Improvement, James H. Harrington, |
| important, because it takes valuable resources and | | | | 1991, McGraw-Hill, NY |
| time just to do that. Most metrics will fall into speed, | | | | This article is also available on our website: |
| cost and time categories. Others may relate to | | | | PROACTION - Generating Best Practices. It is an |
| flexibility, innovation and compliance/safety. Still | | | | excerpt of a paper originally written by George Miller, |
| others may meet quality of life and even aesthetic | | | | Founder of PROACTION. It has been modified and |
| objectives. Metrics themselves are non-value-added | | | | updated by Paul Deis, PROACTION CEO. |
| activities, to be used only when needed. | | | | |