Ed Hreljac

PROCESS IMPROVEMENT How to Approach?

Each process improvement effort is different. The steps, sequence of steps and timing are dependent on the companys capabilities, tools and time available and the objectives of the effort. Below is an overview of one approach that we hope you will find helpful. Step 1: Recognition of Critical Business Issues Usually the first step is the recognition of a critical business issue. Improvement in itself is not the goal. The goal typically revolves around issues such as increasing sales, increasing gross and net profit, increasing cash flow, minimizing costs and investment, improving customer satisfaction and improving product/service quality. Step 2: Tailor an Overall Business Process Model with Sub-processes Identification of the key business processes that will address the critical business issues is the next step. There are a variety of ways to define processes and sub-processes and each organization must define its own. The attached schedules provide a comprehensive sampling of typical business processes. Adapt these schedules to reflect the processes of your organization. Step 3: Prioritize Key Processes to Improve Target efforts towards key processes that if improved will contribute most towards the company goals. In order to prioritize the process improvement efforts, it is important to attach a perceived financial impact to each individual process improvement effort. For example, the question is asked of each process or sub-process, If we make substantial improvement with this process, what is the net financial impact to the company? In most cases a simple consensus estimate supported by some logic is acceptable here. Sometimes, a more rigorous decision analysis may be helpful in determining the priorities of the process improvement efforts. Step 4: Mobilize the Troops for Continuous Improvement Now that the key processes have been identified there are a number of things that have to be put in place and that have to be done: - Start at the Top: Managers must be fully supportive. They must understand and appreciate that they are responsible for choosing and putting into place the processes, systems, and/or methods that will get people to behave the way the organization wants. Simply put, if you want to have a quality attitude and a quality company you must have a quality system. Involve Employees in Mapping Processes: It is critical that the employees themselves are an integral part of these efforts. Otherwise (i.e. the use of external consultants) the length of time for data capture can be excessive, the employees can be somewhat sidelined, and the ability to achieve a pattern of continuous improvement is highly questionable because there is an ongoing dependency on consultancy involvement. The employees often are the experts at their own processes. Use the consultants to analyze and advise only. The magic of employee involvement is that it allows individuals to discover their own potential and to put that potential to work in creative ways. People develop pride in workmanship, self-respect,

self-reliance, and a heightened sense of responsibility. People support what they create. Dont Leave Maps on the Shelf: Whatever the reasons or perceived benefits of process mapping, the one issue that is universally true is that there is absolutely no point in creating process maps and putting them on a shelf or on a database. If the process is to achieve its aims it must be used and improved. A process map can help create a vocabulary to help people discuss improvements and must be used this way. Organize Properly: Most organizations today are aligned around departmental lines accounting, warehouse, customer service, purchasing, etc. This structure is inefficient and costly. The focus is typically structured around whose fault it is not how can we satisfy the customer. Customer needs are not by departments but by processes that cut across departmental lines. Work does not flow vertically; instead it flows horizontally. This reorganization along process lines doesnt have to happen overnight but formation of process teams with process leaders is a useful first step. Measure: Often the performance measurement function is located in the accounting department silo where reports and recommendations are prepared. These may or may not be understood and acted upon on a timely basis. Process companies require performance measurement and management to be an essential dimension of each process thus facilitating continuous improvement in each process.

7. 1:Q ual i ty M an ag em e n t P ro c ess 7. 2 : R e so u rc e M an a g e m e n t P ro c es s 7. 3:R egu l a to ry R es ea rc h P ro ce ss 7. 4 : M a rk et R ese arc h P ro ce ss 7. 5 : P ro d u ct D es i g n P ro ce ss 7. 6 : P u rch as i n g P ro ces s 7. 7 : P ro d u cti o n P ro ce ss 7. 8 : S e rv i ce P ro v i si o n P ro c es s 7. 9 : P ro d u ct P ro tecti o n P ro ce ss 7. 1 0: C u sto m er N ee d s A ss es sm e n t P ro ce ss 7. 1 1: C u sto m er C o m m u n i ca ti on P ro ce ss 7: I S O Q M S R equ i rem e n ts 7. 1 2: I n tern al C o m m u n i c atio n P ro ce ss 7. 1 3: D o cu m e n t C o n tro l P ro ce ss 7. 1 4: R ec o rd K ee p in g P ro c es s 7. 1 5: P l an n i n g P ro c es s 7. 1 6: T ra i ni n g P ro ces s 2. 4 : P ro vi de Fi n an cial I n fo rm atio n 7. 1 7: I n tern al A u d i t P ro ces s 2. 5:M anage I n fo rm a ti o n S y stem s 7. 1 8: M an ag em en t R e vi e w P ro ce ss 7. 1 9: M o n i to ri n g & M e as u ri ng P ro ce ss 7. 2 0: N o n co n fo rm a n c e M a n a g em en t P ro ce ss 7. 2 1: C o n ti n u al I m p ro ve m e n t P ro ce ss 6. 1 : D e ve l o p O u tb o u n d L o g i s ti cs 6. 2 : C o n d u c t C u sto m er T rain i ng 6. 3 : R e sp o n d to I n fo rm a ti on R eq u e sts 6. 4 : R e sp o n d to C u sto m er C om pl ain ts 6. 5:H and l e W a rra n ti es & C l ai m s 6. 6 : C o n d u c t C u sto m er S e rv i ce C ro s s-T ra i ni ng 6. 7:C o l l e ct M o n ey 5. 1 : D e ve l o p P ro cu rem en t P ro ce ss 5. 2:P l a n fo r a n d A c q u i re N e ce ss ary R eso u rces o r In p u ts 5. 3:S chedu l e P ro d u c ti on 3. 8 : G en erate L ea d s 5. 4 : C o n ve rt R es o u rce s o r I n p u ts i n to P ro d u c ts 5. 5 : M a n a g e & D e ve l o p P ro d u cti on T ech n o lo g y 5. 6 : C o n d u c t P rev en tati ve M ai n ten a n c e 5. 7:M anage S up p l i ers 4. 1 : C o n d u c t M arke t A s se ssm e n t 4. 2 : D e si g n N ew P ro d u c t/ S e rv i ce C o n c ep t & P l ans 4. 3 : D e ve l o p P ro to typ e s 4. 4 : R e fi n e E xi sti ng P ro d u c ts / S ervi c es 4. 5 : L au n ch N ew P ro d u c ts & S ervi c es 4. 6 : D e ve l o p P ro d u ct S o u rci ng 4. 7 : M a n a g e P ro d u ct F o reca sti ng 4: P ro d u c t/ S e rv i ce D e si gn & D ev el o p m ent 5: P ro d u c ti o n & O p era ti ons 3: G a i n N e w B u sin e ss 3. 9 : D e ve l o p S al es P ro p o s al P re se n tatio n 3. 1 0: I m pl e m en t S a l es P ro ce ss 3. 1 1: D ev el o p O rd er A cc ep ta n c e P ro ce ss 3. 1 2: E n ter O rd ers i n to P ro d u c ti on & D el i v ery P ro ce ss 3. 1 3: P ro v i d e & C o n tro l S a m p les 3. 1 4: R ec ru i t S a les R ep s 3. 1 5: M an ag e S a l es R ep s 3. 1 6: Q u o te o n S al es 3. 1 7: M an ag e P ro d u cts (In v en to ry) 3. 6 : D e ve l o p A d ve rti sin g S tra teg y & B u d g et 3. 7 : D e ve l o p S al es F o rec as ts 3. 3:I d e n ti fy S p e ci fic T arg et C u s to m ers 3. 4 : D e ve l o p M a rk et M e ss ag es to C om m uni c ate B e n e fi t/I m ag e 3. 5 : D e ve l o p P ri ci n g S tra teg y 6: D el ivery & A fter S al es 2: I n tern al S u p p o rt 2. 6 : P ro vi de Fi n an cial C o n tro ls 2. 7 : M a n a g e C as h F l ow 2. 8 : M a n a g e P ro b l em S o l vin g & D ec i si o n -M ak i ng 2. 9 : D e ve l op I n te rn a l C om m uni c ati ons 2. 1 0: M an ag e Q u a l i ty S ys tem 2. 2 : R e co g n i ze & R e w ard E m p l o y ee P erfo rm a n c e 2. 3 : P ro ce ss A c co u n ti ng T ra n s ac ti ons 1: E xe cu ti v e P ro c es se s 1. 1 : D e ve l op Vi si o n & S trate g y 1. 2 : U n d erstan d M a rk ets & C u s to m ers 1. 3:A l l o c ate R es o u rce s (tim e, peop l e , m o n ey ) 1. 4:M anage F i nanci al R eso u rce s 1. 5 : D e si g n O rg an i za ti o n a l S tru ctu re & R el a ti o n sh i ps 1. 6 : S e t O rg an i za ti o n al G o a l s 1. 7 : M o n ito r D ep artm en ta l A c ti on Pl an s 1. 8:M anage I m p ro ve m en t & C h a n g e 1. 9 : M a n a g e E xtern a l R elati o n sh i ps 2. 1 : T rain E m p l o y ee s

B u si n ess P ro cess M o d el W i th S u b p ro cesses

2. 1 1: M an ag e E n vi ro n m e n tal an d S afe ty 3. 1 : U n d erstan d M a rk etp l a ce & C u s to m er N ee d s 3. 2 : D e ve l o p M a rk et S trate g y & A cti on Pl an s

Schedule - Business Process Model With Sub-processes

___________________________________________________________________ 1: Executive Processes 1.1: Develop Vision & Strategy 1.2: Understand Markets & Customers 1.3: Allocate Resources (time, people, money) 1.4: Manage Financial Resources 1.5: Design Organizational Structure & Relationships 1.6: Set Organizational Goals 1.7: Monitor Departmental Action Plans 1.8: Manage Improvement & Change 1.9: Manage External Relationships

2: Internal Support 2.1: Train Employees 2.2: Recognize & Reward Employee Performance 2.3: Process Accounting Transactions 2.4: Provide Financial Information 2.5: Manage Information Systems 2.6: Provide Financial Controls 2.7: Manage Cash Flow 2.8: Manage Problem Solving & Decision-Making 2.9: Develop Internal Communications 2.10: Manage Quality System 2.11: Manage Environmental and Safety 3: Gain New Business 3.1: Understand Marketplace & Customer Needs 3.2: Develop Market Strategy & Action Plans 3.3: Identify Specific Target Customers 3.4: Develop Market Messages to Communicate Benefit/Image 3.5: Develop Pricing Strategy 3.6: Develop Advertising Strategy & Budget 3.7: Develop Sales Forecasts 3.8: Generate Leads 3.9: Develop Sales Proposal Presentation

3: Gain New Business (continued) 3.10: Implement Sales Process 3.11: Develop Order Acceptance Process 3.12: Enter Orders into Production & Delivery Process 3.13: Provide & Control Samples 3.14: Recruit Sales Reps 3.15: Manage Sales Reps 3.16: Quote on Sales 3.17: Manage Products (Inventory) 4: Product/Service Design & Development 4.1: Conduct Market Assessment 4.2: Design New Product/Service Concept & Plans 4.3: Develop Prototypes 4.4: Refine Existing Products/Services 4.5: Launch New Products & Services 4.6: Develop Product Sourcing 4.7: Manage Product Forecasting

5: Production & Operations 5.1: Develop Procurement Process 5.2: Plan for and Acquire Necessary Resources or Inputs 5.3: Schedule Production 5.4: Convert Resources or Inputs into Products 5.5: Manage & Develop Production Technology 5.6: Conduct Preventative Maintenance 5.7: Manage Suppliers

6: Delivery & After Sales 6.1: Develop Outbound Logistics 6.2: Conduct Customer Training 6.3: Respond to Information Requests 6.4: Respond to Customer Complaints 6.5: Handle Warranties & Claims 6.6: Conduct Customer Service Cross-Training 6.7: Collect Money

7: ISO QMS Requirements 7.1: Quality Management Process 7.2: Resource Management Process 7.3: Regulatory Research Process 7.4: Market Research Process 7.5: Product Design Process 7.6: Purchasing Process 7.7: Production Process 7.8: Service Provision Process 7.9: Product Protection Process 7.10: Customer Needs Assessment Process 7.11: Customer Communication Process 7.12: Internal Communication Process 7.13: Document Control Process 7.14: Record Keeping Process 7.15: Planning Process 7.16: Training Process 7.17: Internal Audit Process 7.18: Management Review Process 7.19: Monitoring & Measuring Process 7.20: Nonconformance Management Process 7.21: Continual Improvement Process