Operational Excellence Begins with Process Improvements

In today’s economy, organizations demand higher productivity, better cost control, and improved risk management to manage frequent market changes and increasing competitive pressure. To deliver continuous business improvement and operational excellence, organizations need to focus on their processes and manage them well. Process improvement can decrease costs and risks associated with running a business. Operational excellence begins and can be achieved through identifying and implementing process improvements.

Process improvement is a series of actions to identify, analyze and improve existing processes within an organization, or to design new ones. These actions are used to derive new goals and objectives, and systematically approach to assessing services and improving them on a priority basis – beginning with mission critical services. Throughout the process improvement cycle, it is necessary to keep customer focus, provide employee empowerment, and most importantly, have leadership buy-in and involvement. Additionally, successful process improvement plans include feedback loops by using data to inform the practice of processes and measure results. Through a data informed practice in process improvements, decisions based on facts are likely to be correct. Process improvements made after a thorough identification and analysis on current processes, followed by feedback from stakeholders, can improve efficiencies and excellence in organizations.

Process improvement in organizations can improve their operational excellence. Through leadership, teamwork and problem solving, continuous improvement can result throughout an organization. By focusing on customer needs, empowering employees, and optimizing existing processes, process improvement strategies can improve and promote a stronger teamwork atmosphere. When there are safety and quality improvements for employees and customers through the improvement of processes, this does lead towards an organization to become a better enterprise. Additionally, the elimination of “wasteful” processes can create a more efficient and competitive organization. Therefore, the implementation of process improvement strategies can improve operations, and increase the excellence in an organization.

Many process improvement methods are available for organizations to use. The selection of the appropriate method to use can be a daunting task. The best advice to give what method to choose comes from the “age old” acronym of KISS. There are many variations to the meaning behind this acronym, but for the needs of this article, it is “Keep It Short and Simple.” When choosing a process improvement method, it is best if it is kept simple rather complex. One of the simplest process improvement methods comes from Edward Demming’s “wheel,” which is Plan-Do-Check-Act (PDCA). Plan, is to establish the objectives; Do, is to implement the new processes; Check, is to measure the new process; and Act, is to analyze the differences to determine where to apply changes that will improve processes. PDCA is a cycle, which starts small to test potential effects on processes, then gradually leads to a larger and more targeted change. Another process improvement method comes as part of the Six Sigma practices, which is Define, Measure, Analyze, Design, and Verify. Define, is to identify goals consistent with customer demands; Measure is to identify capabilities and risks; Analyze is to design alternatives and designs, and evaluate the capability to select the best design; Design, to optimize and verify a design; and Verify, through pilot runs, is to verify the new process in production with the

process owners. Either methodology used is a good foundation to begin process improvements. However, the needs of the organization may determine that a more complex strategy is necessary to complete process improvements. The most important thing is to identify a methodology as soon as possibly, and then begin collecting the hard data that is necessary for analysis.

Once a process improvement methodology is selected, the next step is to identify the business objectives to solve the problems in processes. The first thing to do is to generate a list of organizational problems and to find the “bottle necks” in the process flows. When creating the list, it is best to group interrelated problems together, such as things that cause employee issues, things that waste time, low productivity, redundancies, and so on. This will help to prioritize which processes need to be attended to first. After the problem processes have been identified, the process improvement team needs to identify the steps in the process causing issues. There are many methods available to help identify the problems in a process, such as brainstorming, flow charts, cause and effect diagrams (a.k.a fishbone or Ishakawa diagrams), and root cause analysis. Next, a process improvement plan should be created based on the organization’s goals and problems, or objectives, and tie improvement activities to project work. With this approach, improvement focuses on the issues of the organization and each process change is based or driven by a specific need. This objective oriented approach will help to keep process improvements focused on issues that an organization wants to have fixed immediately.

The success of any process improvement plan is dependent on the quality of its team members. Effective teams are required for process improvement plans to succeed – the team is the engine that delivers successful process improvement changes. First, all team members should be trained on whatever improvement methodology is chosen. Next, the team should have a clear and defined purpose concerning a process improvement plan. Much like project management, the process improvement team should have great communication, be cross-functional and have representation of all stakeholders of the process. It is also important to empower the team as much as possible to make all required decisions; else, process changes may take longer to implement. Finally, it is important that team members have good change management skills, because changes and decisions during a process improvement phase are sure to come. Thus, a project improvement plan can succeed if an effective team is organized, trained, and empowered.

Even though there may be an effective team organized, there are still challenges to any process improvement plan. One challenge is the amount of process improvement methods that are available - there are a several methods to choose from to use for process improvement changes. It is important to pick one as quickly as possible that will be effective for the team, gather hard information, and getting an accurate view of the current processes. Another challenge is that processes may be too rigid and inflexible to change. However, good processes are always flexible, not bureaucratic, and can provide the control and information needed to facilitate improvements. Lastly, but not all-inclusive, there is the challenge of getting leadership “buy-in” for any proposed process improvement changes. Part of this challenge is in how much empowerment is given to the process improvement team, but there other factors that will help to sell the plan to process owners or leaders. The team needs to completely disclose the objectives for the process change, give realistic goal settings and schedules, show projected return on investment, and provide customer surveys of processes. Therefore, proper planning can overcome many challenges opposing process improvement changes.

Operational excellence does begin and can be achieved through process improvements once a method is selected, the objectives and goals are clearly defined, and an effective team is established. Cost and risks can be reduced by removing waste, overhead, and redundancy to improve processes, thus increasing operational excellence. Operational excellence in organizations can improve value delivered to customers, employees and stakeholders by indentifying and implementing process improvements that will increase efficiency and effectiveness. In closing, University of Louisville basketball coach once said, “Excellence is the unlimited ability to improve the quality of what you have to offer.” Thus, an organization, too, can achieve excellence if they can improve the quality of processes.