Consulting Business Process

Improvement Workshop
Techniques and Concepts
What is a Business Process?

A group of logically related tasks that use the firm's

resources to provide customer-oriented results in
support of the organization's objectives
The Challenge

How to apply improvement techniques rooted in

manufacturing to business processes and the services
industry?

These techniques are known by various names:

• Lean Thinking
• Kaizen
• Continuous Improvement
 Lean Definition

“A systematic approach to identifying and eliminating

waste (non-value-added activities) through continuous
improvement by flowing the product or service at the
pull of the customer in pursuit of perfection”
Improvement through Lean Thinking

Lean thinking looks at the value chain and asks:

How can things be structured so that the enterprise does
nothing but add value, and does that as rapidly as
possible?

All the intermediate steps, all the intermediate time and

all the intermediate people are eliminated.

All that’s left are the time, the people and the activities
that add value for the customer.
The Nature of Business Activities Conducted
Elsewhere – Not on the factory floor

People across the organization deal with multiple

projects, assignments, and business processes
simultaneously

Most business processes can be viewed as a

knowledge work “job shop” involving multiple work
centers and a network of work queues

Process management tools and principles can be

applied to help reduce variability and non-value-added
activities in these business processes
Customer Focus

Value added is always determined from the customer’s

perspective – Who is the customer?

Every business process should be focusing on adding

value to the customer

Anything that does not add value is waste

Some non-value added activity is necessary waste

Some Types of Wastes

Redundant Systems Manipulation

Incomplete Information Inspections & Approvals
Functional Hand-offs Transportation
Bottlenecks File / disk Storage
Batch Processing Unnecessary Information
Typical Causes of Waste

Functionally Silo-ed Unbalanced Workload

Organizations Changing Management
IT Gaps Priorities
Excessive Controls No Decision Rules
Outdated Business Process Poor Visual Controls
Designs Disorganized Workplace
No Back-up / Cross Training Lack of Training
Obsolete Forms Designs / Not Lack of Organization
Accurately Aligned to Knowledge
Customer & Process Needs
Mapping of Manufacturing Wastes to
Business Process Wastes

The Seven Wastes of Manufacturing The Seven Wastes of Business Processes

Overproduction Overproduction = Work on Obsolete Requests
Inventory Inventory = Requests
Extra Processing Steps Extra Processing Steps = Extra Steps
Motion Motion = Finding Information
Defects Defects = Process Mistakes, Errors
Waiting Waiting = Waiting on the Process
Transportation Transportation = handoffs
Business Process Improvement Steps
Boundaries of business process;
Who is the Customer? What is value add to customer?
Measurable objectives?

Process steps
Current State Process flow
Identify Value-Add and Non-Value Add
Work Flow--Organization--Technology

Work Flow--Organization--Technology
Eliminate Non-Value Add and
Future State Challenge Non-Value Add [Required]
Question What Is Real Value Add
Creative Leaps

What? When? Who?

Implementation Plan Define Measures of Improvement
Training & Communication Plan

Do It!

Evaluate
Business Process Improvement Steps
Boundaries of business process;
Who is the Customer? What is value add to customer?
Measurable objectives?

Process steps
Current State Process flow
Identify Value-Add and Non-Value Add
Work Flow--Organization--Technology

Work Flow--Organization--Technology
Eliminate Non-Value Add and
Future State Challenge Non-Value Add [Required]
Question What Is Real Value Add
Creative Leaps

What? When? Who?

Implementation Plan Define Measures of Improvement
Training & Communication Plan

Do It!

Evaluate
Mapping the Current State

This is the crucial first step in process improvement –

establish deep understanding of the existing processes
& dependencies

Identify all the activities currently involved in the process

Observe the process first hand

It’s not about the map!

There will be more questions than answers!

Example: Current State Map
Identify Value Add, Non-Value Add [Required],
and Non-Value Add
Value Add - A Customer Perspective

Customer
CustomerValue
ValueAdd
Add Business
BusinessValue
ValueAdd
Add Non
NonValue
ValueAdd
Add(NVA)
(NVA)
(CVA) Questions:
(CVA) Questions: (BVA) Questions:
(BVA) Questions: tasks typically include
tasks typically include
•
• Does the task add form or
Does the task add form or
•
• Does this task reduce owner
Does this task reduce owner one
oneor
ormore
moreforms
formsofof
feature to the product or financial risk?
feature to the product or
service?
financial risk? waste:
waste:
service? • Does this task support
• Does this task support
• Overproduction
•
• Does the task enable a financial reporting Overproduction
• Does the task enable a financial reporting
• Waiting
competitive advantage requirements? •
competitive advantage requirements? Waiting
(reduced price, faster
• Transporting
(reduced price, faster • Would the process break •
delivery, fewer defects)? • Would the process break Transporting
delivery, fewer defects)? down if this task were
• Over-processing
down if this task were •
• Would the customer be removed? Over-processing
• Would the customer be removed?
• Inventory
•
willing to pay extra or • Is this task required by law Inventory
willing to pay extra or • Is this task required by law
• Wasted Motion
prefer us over the •
prefer us over the or regulation? Wasted Motion
competition if he or she or regulation?
• Rework & Defects
competition if he or she •
knew we were doing this Rework & Defects
knew we were doing this
task?
task?
Business Process Improvement Steps
Boundaries of business process;
Who is the Customer? What is value add to customer?
Measurable objectives?

Process steps
Current State Process flow
Identify Value-Add and Non-Value Add
Work Flow--Organization--Technology

Work Flow--Organization--Technology
Eliminate Non-Value Add and
Future State Challenge Non-Value Add [Required]
Question What Is Real Value Add
Creative Leaps

What? When? Who?

Implementation Plan Define Measures of Improvement
Training & Communication Plan

Do It!

Evaluate
Future State Mapping

Brainstorm Process Simplification

• Develop alternative concepts of new process

Develop Detailed Future State Map

• New workflow
• Identify Value Add and Non-Value Add
• Label process segment cycle times
Example: Future State Map
Implementation Priorities

Think global optimization

Think systems optimization

Maximum impact to process

Speed of implementation – small quick victories

Cost-benefit analysis (avoid cost prohibitive choices)

Systems Perspective

Will new skill sets be required? How will you achieve

them?

Is the current organization structure sufficient? Staffing

levels?

Are there cultural issues? Will there be significant “push

back”?

Any implications for other organizations?

Systems Perspective

Do your current technologies support the new process?

Are supportive technologies available? Cost effective?

Technology is an enabler, not a solution

Do you need to adopt new organizational practices?

Does your rewards system encourage behavior that is

congruent with the new process?
Appendix
Examples: Seven Wastes

Overproduction: devising over-complex solutions to design problems

because of poorly generated concepts, or from chopping the task into
bits and letting each department duplicate tasks others are doing.
Waiting: for other departments to process tasks, for unnecessary board
approval; queuing to use an overloaded facility or fighting for specialist
staff time on urgent tasks.
Transporting: unnecessarily moving bits of product development tasks
to separate departments then having to fetch them back, analyze and
review their input.
Over-processing: requiring too many approvals; preparing reports that
aren’t used or of any benefit; creating features that the customer does
not want or need.
Examples: Seven Wastes

Inventory: poorly organized projects that take far too long to

complete; running projects that are not commercially viable.

Wasted Motion: searching for information, often across

departmental boundaries, that has not been captured or
logically filed.

Rework and Defects: changes to the product or the way it is

to be manufactured because of insufficient input from the
right people early enough in the process.