Every business has a set of standard processes & practices to help accomplish objectives efficiently and effectively. However, business processes often lose relevance over time, resulting in project delays and increased costs. As a result, you need to go through process improvement exercises regularly.
For example, the pandemic acted as the digital accelerant of the decade. It disrupted business processes across the globe, and digital transformation became critical for corporate survival. However, only a few organizations such as Amazon were ready to handle the changing business dynamics with its user-friendly interface, easy availability of supplies, customer self-service, and no-contact delivery options amidst the lock-down. Amazon increased its market capitalization by over $700 billion because of its continuous investment in improving business processes.
But, how do you improve your processes, and which methodology will yield the best results for your organization? Here’s a guide to the best process improvement methodologies to get you started.
What Is Process Improvement?
Process improvement, also called business process improvement (BPI) or continuous improvement process (CIP), is the practice of optimizing existing business processes to meet the current industry standards and improve customer experience.
Process improvement aims at identifying, analyzing, and improving workflows. Processes can either be modified or complemented with sub-processes, or even eliminated for the ultimate goal of improvement (i.e., minimizing errors, reducing waste, improving productivity, and streamlining efficiency).
Process Improvement vs. Business Process Management
Often process improvement and business process management are used interchangeably. But, the question here is if the two concepts are synonymous or different – and while process improvement and business process management are similar concepts with the same end goals, they have stark differences.
Business process improvement focuses on increasing customer value through improving quality, enhancing service, reducing costs, and increasing productivity.
Business process management provides end-to-end process understanding, visibility, and control by ensuring effective change communication across an organization. Business process management combines process documentation and improvement, performance management, and organizational change management with technological change to ensure the success and sustainability of process improvements while enabling a process of excellence culture.
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How Improved Processes Positively Impact Organizations
Here are a few of the benefits of process improvement that directly impact your business:
1. Improved Productivity
Research suggests that over 40% of employees spend at least a quarter of their week on manual, repetitive tasks such as email, data collection, and data entry. Implementing a technological change or a custom application can automate these repetitive tasks, and employees can reallocate time to core aspects of their job.
2. Enhanced User Experience
76% of managers feel that companies need to reengineer their user experiences, bringing people and technology together in a more human-centric way. In its recent attempt to become a metaverse company, Facebook aims to leverage advanced technologies such as AR & VR to merge the physical and digital worlds like never before, changing the very nature of human interaction at every front – from gaming to work.
3. More Agile
Flexi-processes are critical for staying competitive in the market. Business process improvement focuses on implementing flexible processes that are easy to deploy and adapt as your business needs evolve.
4. Cost Reduction
Process improvement methodologies result in lower resource requirements and reduced waste by finding solutions to generate the best process output. These methodologies allow businesses to save on expenses such as unplanned overtime and premium shipping costs, resulting in substantial savings.
5. Compliance
With changing business requirements, the regulatory standards also change. Ensuring your employees are prepared requires regular compliance training, which becomes difficult without help from external experts. With process improvement techniques, third-party consultants thoroughly document all compliance-related policies, procedures, and internal controls. Building compliance into your new business processes allows you to prevent unnecessary penalties & fines.
For example, Google undergoes independent verification audits of its security, privacy, and compliance controls, to maintain global standards. It works continuously to improve its business processes and associated compliance offerings.
6. Reduced Cycle Times
Adopting process improvement methodologies such as the Kanban model helps companies deliver value to customers quickly. Additionally, by eliminating waste and improving communication and collaboration, process improvement leads to faster delivery cycles.
7. Improved Quality
In addition to accelerating product development, business process improvement can also improve product quality. For example, by deploying proper testing methods, organizations can ensure that products will advance to the production stage only after the performance, security, and other issues are resolved.
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10 Best Process Improvement Methodologies & Techniques in 2023
70% of process improvement initiatives fail without successful change implementation within the organization. Given the crucial benefits that process improvement offers, it’s essential to understand which methodology suits your business requirements and have an implementation plan ready.
Here are 10 of the best techniques to kick start your process improvement initiative.
1. Agile Methodology
Instead of defining the project with stringent deadlines, an agile approach requires more iterations. It incorporates team feedback, highlighting problems and successes to make further enhancements. An agile methodology improves communication and collaboration among the stakeholders and makes it easier to adapt to change.
2. Six Sigma
Six Sigma is a well-known technique to reduce variability and defects to less than 3.4 per 1 million units. It aims to minimize errors and maximize value across industries by leveraging data and statistics. Within this methodology, the process engineers use two techniques DMAIC (define, measure, analyze, improve & control) and DMADV (define, measure, analyze, design & verify), to achieve the desired results.
A noteworthy aspect is that organizations tend to miss the first three steps and move directly to the improvement or design stage, leading to project failure. For example, the American Multinational General Electric struggled to improve its product & service quality even after onboarding experienced professionals. However, after incorporating Six Sigma, they streamlined their processes, resulting in increased revenue.
3. Lean Manufacturing
Lean manufacturing aims at reducing cost by eliminating waste. Although the name suggests that this methodology is specific to the manufacturing industry, its core principle can also be applied to other sectors. To use this technique effectively, the process improvement team needs to map the value stream to understand buyer perception, which will allow teams to eliminate waste and redundancy from business processes successfully.
For example, Intel adopted the lean manufacturing technique to provide higher quality processors within a reduced time frame. By implementing quality control factors and waste reduction techniques, Intel reduced the time to bring a microchip to the factory from more than three months to less than ten days.
4. Total Quality Management (TQM)
TQM aims to improve customer satisfaction by getting the entire organization on board with continuous process improvement. This improvement methodology empowers employees by fostering a change culture where employees aren’t afraid to experiment and have a shared business goal. TQM implementation can vary across the industries, but organizations using TQM generally follow these principles:
- Organizations should follow a systematic and strategic approach to achieve their business goals.
- Customers determine the level of quality.
- Effective communication and employee training techniques to ensure that employees understand the definition of quality and strive to achieve it.
- Organizations should define the process framework and monitor performance to detect any deviations.
5. Just-In-Time
Just-In-Time manufacturing, also known as the Toyota Production System, aims at minimizing inventory costs and increasing efficiency by producing goods as per the requirement. Toyota executives invented this concept with a vision to adapt quickly and efficiently to change in demand for models and reduce losses by keeping inventory in-store that was immediately needed.
It promotes a ‘pull’ strategy instead of a ‘push’ strategy. It is often implemented with the Kanban methodology to avoid overcapacity of work and requires accurate forecasting along with steady production for success.
6. Theory of Constraints
The Theory of Constraints methodology is a highly focused technique for creating rapid improvement. It identifies any process bottlenecks and improves that bottleneck or constraint until it is eliminated.
Here are the five steps that can help you attain your goal:
Source: Lean Production
7. Kaizen
Kaizen emphasizes lean and agile practices to improve the quality and productivity of processes through slight shifts in work and corporate culture.
For example, Mitsubishi Heavy Industries America(MHIA) initially created tailor-made(design-to-order) chemical & environmental plant designs. However, after incorporating the principles of Kaizen methodology, it made small, continuous changes to its design process to establish a standardized module package. It resulted in decreased errors in the design phase and reduced cost to the customer by 5-10%.
8. PDCA Model
This technique is a part of the Kaizen methodology. PDCA stands for plan, do, check, and act. It helps organizations efficiently identify the processes that need improvement.
Source: Lucidchart
9. Process Mapping
Process mapping is a workflow visualization technique that helps companies map out a plan from start to finish for process improvement. The visualization can be in the form of a process flowchart, functional flowchart, and process model. You can create process maps specific to roles or business goals to analyze your organization’s activities to improve productivity.
10. Kanban
Kanban is a visual workflow technique used to identify problems, eliminate bottlenecks, improve efficiencies, and track the progress of your process improvement initiative.
For example, the fashion retail giant Zara uses Kanban boards at store levels to identify the kind of clothes that need to be produced and in what quantity. Store managers send a biweekly order to headquarters, based on their sales data and anecdotal evidence as to what loyal customers want to see sold on the shop floor. Trending clothing styles are added to the order, which arrives back in the store in just two days. Zara’s adoption of lean production techniques has resulted in establishing Inditex (the parent company) as the largest clothing retailer in the world.
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The Key Takeaway
Implementing process improvement methodologies is a great way to stay current and competitive. The business processes need to be updated regularly and continuously to ensure that your organization can operate with minimum operating costs and maximum efficiency.
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Priyanka Malik
Priyanka is a Marketing Professional with over four years of experience in different facets of Marketing. She is passionate about content creation and spends her time writing and strategizing content at Whatfix. With her curiosity-driven nature about customer behavior and technology, she is keen on helping Enterprises accelerate Digital adoption with Whatfix. Drop-in your comments below or reach out to her at [email protected]
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