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April 2010
Big bang for little buck with business process improvement exercises.
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 By Karl Driggs, Chief Operating Officer
Good business owners and leaders recognize the importance of finding efficiencies for their business regardless of the economic environment. Unfortunately, some business owners are still focusing strictly on reducing costs and ways to increase prices. If we’ve learned anything this past year and a half, it’s that strict cost cutting can only take you so far. Businesses that need to sustain or want to grow must take a hard look at business processes and eliminate waste or non-value added steps in their processes.
There are easy and low cost ways to get started with any business process improvement initiative. Outlined here are some very practical and hands on approaches you can take today to make your business more streamlined and to free up resources from doing inefficient steps in their work.
Start with a Value Stream Exercise
A value stream is a series of processes used by a company to provide value to a customer. A value stream mapping exercise forces you to look at a full, end-to-end process such as the process from product order entry to product delivery. The map will show the steps, decisions, communications and wait times associated with the process.
By mapping out the value stream, you can clearly find steps where there is no value added or where there are wait times or “bottlenecks’ within the value stream. This provides the opportunity to do more detailed process maps of areas where non-value added steps are identified. When completed, the value stream map becomes the foundation for your business process improvement initiatives.
By completing a value stream mapping exercise, business owners clearly see opportunities for improvement. And the cost of doing this exercise consists only of man hours. It’s important to gather key people into the exercise who know the current value stream intimately. The map needs to be detailed enough to identify major processes, so having the right people involved is important.
Jump into a Process Map
Sometimes, the business owner or manager will easily recognize an inefficient process, even without going through the value stream exercise. While we always suggest starting with a value stream map, there are occasions where an inefficient process is evident and you do not want to continue with the waste that is created. In these cases, a process map can help immediately.
The process map outlines all the detailed steps in a business process down to the level of knowing how long it takes to perform each step, knowing who performs the steps, knowing where the person who does the step is physically located, knowing how steps are handed off to others, etc. The completed process map will identify value added, non-value added and non-value added but required steps. By identifying non-value added steps, a process can be streamlined through developing a future state map that eliminates the non-value added steps.
The key to process mapping is being in action after completing the entire exercise by implementing solutions immediately. There is no sense in continuing to do an inefficient process once you have identified the inefficiencies.
Mini Process Improvement Ideas
Maybe the easiest and most engaging way to get business process improvement ingrained into your company culture is to foster mini process improvement events. Ask all of your employees to find areas of waste in their daily processes. There are processes within all organizations that were put into place at one time to serve a purpose, but when that purpose went away or was no longer needed, the process stayed in place. Regardless of the reason, once identified, let the employee lead a small team to create a new process eliminating the waste they have found. Many times, these small initiatives add up to big savings.
Once you work through some of these exercises, we are sure you will find great value for your business. The waste you identify in many cases can free up resources you never thought you had. At Apple Growth Partners, we have people who can assist you with these basic exercises or a more robust process improvement initiative. Please email me at kdriggs@applegrowth.com for a free consultation.
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