June 29, 2018
By Fred Cramer, President of Guide Technologies
In my experience working with hundreds of manufacturers throughout the U.S., there are typically three organizational styles or approaches regarding how they view business processes and more specifically—business process improvement. First, there are those companies that pay very little attention to processes and are missing significant benefits to their bottom line. Second, there are organizations that are overly process driven, making even the simplest task burdensome, tedious and quite often, unprofitable. And finally, there are those organizations that do pay close attention to their processes, are currently getting some solid results, but recognize they could do significantly more.
Regardless of your company’s perspective, every organization is made up of people and processes. Therefore, it stands to reason that all business performance issues are people related and/or process related.
While you can create improvements with ‘average’ skills by deploying well-defined, controlled processes, you simply can’t deliver outstanding results with poor processes and great people. It takes both. The processes will dictate the effective use of the people in executing and managing the output of goods and services, thereby directly impacting profitability.
Embarking on a business process improvement initiative in any organization can be challenging. But here are five key steps that manufacturers must embrace in order to begin to revamp or refine their business processes if they want to positively impact their business metrics in today’s uber-competitive environment:
- Put a stake in the ground.
Identify what business metric must be fixed, now! Customer service levels, inventory levels, product quality, procurement/supply chain, new product development. Pick the one that is most important and stake the process to a metric.
- Get started now.
Don’t wait. Don’t use excuses like, “let’s start first quarter after our busy season,” or “let’s wait for the audit to be over.” Make and accept no excuses. Just start. There is never a perfect time to start, so select a process that is important to the business and get going.
- Fix the process.
Get help if you needed. Document the process. Figure out where you can improve it. Use lean tools such as value stream mapping to help. Change something, measure the results. Is it better? Can it be made better with return on the investment? If it is not better, do the cycle again, until the process improves. As long as the cost of improvement can deliver more benefit than cost, keep going.
- Ensure the solution sticks.
Document the process and embed it into your systems. Use a core process team of cross-unit subject matter experts, executive sponsor, internal facilitator, project lead, IT, maverick, data person, and sometimes customers and suppliers. This team handles the modeling, analysis, and redesign, while the sponsor and project lead take ownership for a successful implementation. They stay involved from initiation to completion, and can involve other stakeholders with an engagement plan. Engaging people in a significant way in process improvement makes it have maximum impact.
- Build organizational capability
Share successes with executives and across the organization. Use visible metrics for continuous improvement action plans. Nurture an internal facilitator network. Have objective 3rd party outside teams review. Build leader and employee process capability. Again, engaging people will further cement the new process into the systems and culture of the organization.
To learn more about what “Intelligent Business Process Management” can do for your organization to improve efficiency, reduce costs and increase profitability, click here.