Process Optimization Editor's blog

Variation - The Foundation for Process Improvement

 

Variation is the difference between what you expect to see and what you actually observe (expected vs. observed).  One of the major influences on business by W. Edwards Deming was this focus on understanding variation and eliminating the portions of which you can control early in the process to improve.  Much of Japanese business practice is rooted in this as is Six Sigma and to a lesser extent, the Lean buzzword programs.

How to Improve the How: Basics

 

How do you improve processes effectively? Here are some initial ideas:

Recently, I was asked by a business owner, who was skeptical of process improvement approaches due to his experiences in his Fortune 500 past.   He, like myself, had witnessed programs go terribly wrong, through a mix of recipe-driven approaches, sub-optimization  and politics(rob Peter to pay Paul, as well as poor leadership.

The first thing to remind people is the importance of HOW you do things (processes). How you do things does determine how well your people will do them. How you do things does determine how much of specific resources (money, time, technology….) you will use.  How you do things does determine how your customers will respond. How you do things does actually determine how well and how long you can do them well….  Without understanding and focusing on how you do things, it is very difficult to solve problems, to improve and to learn from the past.

Understanding and agreeing with this enables you then to consider the easier things you can do to "pick the low hanging fruit."

The first idea is thatyou have to be grounded in reality such that it is.  This means, you need to understand how things really work.  There really is no substitute to working with the people involved in the process to map things as they are  and then question, with them, the assumptions as to why and what they are doing.

Secondly, there are bad and good things to be learned from all these buzzword programs from TQM to Six Sigma to LEAN to TOC.  I'll leave that to other posts to discuss these in detail but one key point is that, with all the focus by tens of thousands of professionals in this area, there are a lot of resources for learning from the successes and even learning from the failures.

The Most Common Barrier to Process Improvement Efforts in Organizations

 

The Danger of the Buzzword program in organizations

 Lack of brain activity i.e. thinking

Over the last 25 years, there have been all kinds of buzzwords in this area including TQM, BPR, Lean, AGILE, Six Sigma, ERP, MRPII,  TOC, WCM, Kaizen, CIT, CAPM and quite a number of others.  

Why Focus on the HOW?

When you look at improving your processes you are looking primarily at HOW you do things.  This also forces you to consider WHAT you are trying to accomplish (hopefully first) and then WHO will accomplish it.   The catalyst however, is ideally HOW you achieve the WHAT.  Let's consider some of the reasons you should do this....

  • Drives which and how many resources we need (costs)
  • Drives effectiveness and efficiency both
  • You've been told you have to do it
  • Speed
  • Cost reductions demanded by customers
  • You have been inflicted by bouts of chaos
  • You need to be able to learn from your past activities
  • Past disasters and the need to avoid those in the future
  • The need and desire to get better
  • Late deliveries or lead times too long to be competitive
  • Difficulty in identifying underlying issues/problems
  • Take the guess work out of the business

What's the Investment

Engaging in an effort to improve a key processes or an overall effort is typically  a significant undertaking that  is long term in nature and often conflicts with the daily "fire fighting" that many organizations are engaged in.   When you choose to reduce costs and/or improve capabilities by addressing how you do things (process-focus), what is the investment?    Like other business investments, the costs center around the time of your people for which you are paying for, the outside investment and of course the relevant opportunity costs for both.  The following is a concise listing of these costs:

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