Process Improvement Profit0

8/2/2019 Process Improvement Profit0

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1

Business Process Improvement

A strategy for productivity

and competitiveness


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2

Objectives

Create a closer link between operational

efficiency and profitability

Connect your role to business profitability

Introduce tools and techniques

Create a culture/model to sustain

operational improvements

Make you laugh


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3

Five stepsto link operations and

profit

Understand how the business makes money,

strategic intent and the value proposition

Alignment with a core/enable businessprocess (end-to-end understanding)

Baseline (metrics and unit costs)at a

minimum go to the Balanced Scorecard

Improvevoice of the customer

Measure and control


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4

How the Business Makes

Money

Revenue Expenses = Profit


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6

Alignment with core business

processes Core business processes (business

acquisition, renewals, servicing)

Enabling processes (HR, IT, Finance)

What does it give you

Holistic view

End to End

Inputs and Outputs

Suppliers and Customers


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7

Process Improvement

Objectives Making processes effective. Have the

right quality output, at the right time,

at the right price. Making processes efficient.

Minimizing the resources needed andeliminating waste (non-value activities)

to focus on value. Making processes adaptable. Being

able to adapt to changing customer andbusiness needs.


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Good Business

Processes.. Enable you to make betterbusiness decisions and implement

them faster

Help to improve and control youroperations

Improve your production flow


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Common Characteristics ofWell-defined and Well-managed Processes Accountability for how well the process

performs (process owner)

Defined boundaries and interfaces Known cycle times (consistent, repeatable and

predictable)

Measurement and feedback controls

Customer-related measurements and targets Formal change procedures


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Quality Business Processes

Eliminate errors Minimize delays

Maximize use of assetsmatch capacityto demand Promote understanding Are easy to use

Are customer focused and adaptive tochanging needs Provide the organization with

competitive advantage


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Its all about the business

Businesses need to make money (growprofitably)

Best way to contribute is by addressingbusiness process

BAs critical to analyzing the processgobeyond the human to system interactions

Effect business change

Change management Best way to prove your value is by delivering

high quality metrics


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12

Creating a baseline

Functional reviews

Objective to educate on all of the basics

Focus on current state with a few ahas

Align capacity with demand

Teaches

Holistic view

Management by fact

Are not public performance reviews


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Creating a Functional Review

Process Standardized template unique story

Creates a baseline (efficiency and

effectiveness) and metrics Each functional area presents to Sr.

Management

Feedback memo with approvals anddirection

Inputs to Operational Plans and Goals


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Content Value Stream Alignment

Organizational Design

Performance Management

Efficiency Snapshot

High Level Process (SIPOC) (by output) Trend of demand and capacity (by output)

Drivers, lead indicators and levers

Performance metrics productivity, quality, timing (byoutput), external benchmarks

Customer requirements and metrics (by output) Unit costs and trend

Budget and expense management

Challenges, risks and opportunities

Commitments to go forward2008 Goal creation


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Context ofOrganizational Fit

Description ofServices

Develop Acquire Install Administer Process* RetainProduct Client Client and Service Claims Client

Enabling Processes


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Suppliers Inputs Process Customers Requirements

Step 1:

Outputs

Step 2: Step 3: Step 4:

See Below

Step 5:

http://www.isixsigma.com/library/content/c010429a .asp

SIPOC


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Capacity Drivers: Network

PricingArrangements andCustomization

Lead Indicators:None

Taken staff out andteam has continuedto meet/exceedgoals

May be potential foradditional efficiencygains

June 2007 - acapacity review ofthis team will begin metrics, skill set,tracking of time &volumes to rightsize team

Volume and Staffing

0

2

4

6

8

10

12

Staffing

0

500

1000

1500

2000

2500

3000

Volum

e

Staff 10 10 10 10 7 7 7 7 6

Volume 2848 2529 2057 2729 2248 2102 1767 2467 2064

Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 Q1 '07


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Metrics Provider Loads

ProviderLoads - Service Timing

90.00%

92.00%

94.00%

96.00%

98.00%

100.00%

1Q'05

3Q'05

1Q'0

6

3Q'0

6

1Q'07

Time

Percent

Actual

Goal

Service timing goal is 96% loaded within 14 days

Quality goal is 98.5% for 2007

Timing and quality goals are a focus area for 2007


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Global Opportunities

Performance Metrics daily measures,inventory management (work in progress),team and individual productivity, quality and

controls, unit costs Performance Goals (too low)

Service levels same day, good order and badorder (reduce work in progress)

Mature staffing models Process improvements eliminate hand offs

and variation and improve the flow throughthe value stream


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Introducing Bursts

2 day events

Scope and goal set

Prep with leaders and team members

Value stream mapping identify missing data

points

Data collection Improvement session

Report out and action plan


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Identify Opportunities

Cost/unit cost (esp. if trending up)

Duplicate steps

Rework

Complaints

Missed deadlines

Inconsistent results

Many hand offs

Long training curves Variation

No work standard


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Best PracticesLean

Once and done

No redundant work; minimum touch

Right the first time Match capacity to demand

Rational handoffs vs. specialization

Workforce Engagement

Scalable to variance in demand Visibility

Team measures, goals and accountabilities


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The Importance ofCulture and

People

Emphasis on the people great people

can execute a bad process

How we do work is personal

Workforce engagement

Strong change management


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Sustainable Operational

Excellence Culture

Its all about the people

The soft stuff is the hard stuff

Top down and bottom up

Quick wins


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Sustainable Operational

ExcellenceCulture Shift Counter-intuitive to conventional

wisdom

Learning to see

New thinking

New skills

New tools, sources of knowledge


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Parting comments

Operational Efficiency Metrics (measures and controls)

Goals

Process Design Use voice of the customer

Dont automate an inefficient or ineffective process

Dont fix at point of error when the right answer is to preventupstream

Observe the processinterview to identify variation

Look end-to-end during analysis

Use data (time track if no data available) Get user input and feedback

Eliminate waste to add value

Production flow no batch and queue (wait times)


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Closing

Questions and answers


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Resources

www.bptrends.com

Lean Enterprise Value, Murman et. Al

Business Process Change, PaulHarmon

Business Process Management,

Profiting from Process, Roger T.Burlton

http://lean.mit.edu


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30Source: Modified from BT Trends, Paul Harmon


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31Source: Modified from BT Trends, Paul Harmon

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