PROCESS IMPROVEMENT TECHNIQUES – AN OVERVIEW PALLAVI CHANDRAJEET BHOR ROLL NO: HPGD/OC14/0741 SPECIALIZATION IN : SUPPLY CHAIN MANAGEMENT WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT & RESEARCH YEAR OF SUBMISSION :AUGUST 2016

PROCESS IMPROVEMENT TECHNIQUES – AN OVERVIEW Introduction: Process Improvement technique is on a path toward becoming a service-driven for organization. This delivery model recognizes that what we deliver to our customers is not a physical asset but rather the combined behaviors, skills, processes, management systems, and technologies we use to deliver value to a customer however the customer defines value. Therefore, it is prudent that to follow a disciplined approach to process improvement management as a business tactic for responding effectively and rapidly to customers to ensure their best possible experience.

Definition: Process Improvement Technique is a systematic approach to help an organization optimize its underlying processes to achieve more efficient results. It is the methodology that both Process Redesign and Business Process Reengineering are based upon. Structure of Process improvement Technique: Understanding existing processes Introducing process changes to achieve organizational objectives which are usually focused on quality improvement, cost reduction and schedule acceleration Most process improvement work so far has focused on defect reduction. This reflects the increasing attention paid by industry to quality However, other process attributes can be the focus of improvement.

Why do process improvement? We want to build better products (cheaper, more dependable, quicker, …) We really don’t know how to measure the product characteristics There, measure the process under the assumption – a better process will produce a better product. Process improvement Techniques refers to making a process more effective, efficient, or transparent. Process improvement Techniques is relevant to all areas because processes naturally degrade over time for any number of reasons. An organization that conducts process improvement focuses on proactive problem resolution in order to avoid operating in crisis management mode when process degradation occurs.

Increase Accountability Improve Reliability BENEFITS OF PROCESS IMPROVEMENT TECHNIQUES! Process Improvement Technique enables organizations to align internal business functions with customer needs, and helps executive determine how to direct, monitor and measure company resources. When properly executed by qualified professionals, business process management has the capacity to reduce costs, enhance efficiency and productivity, and minimize errors and risk – thereby protecting and optimizing corporate resources. Some of the other key objectives and benefits associated with business process management include the following: Increase Accountability Improve Reliability

Simplify Regulatory Compliance Avoid Waste Promote Safe Working Conditions and Protect Company Resources and Information Process and product quality: Process quality and product quality are closely related (Are they?) A good process is usually required to produce a good product For manufactured goods, process is the principal quality determinant For design-based activity, other factors are also involved especially the capabilities of the designers

Principal product quality factors

Process analysis and modeling: Study an existing process to understand its activities Produce an abstract model of the process. You should normally represent this graphically. Several different views (e.g. activities, deliverables, etc.) may be required Analyze the model to discover process problems. Involves discussing activities with stakeholders Process improvement technique and product quality are closely related A good process is usually required to produce a good product For manufactured goods, process is the principal quality determinant For design-based activity, other factors are also involved especially the capabilities of the Designers

Process analysis techniques: Published process models and process standards It is always best to start process analysis with an existing model. People then may extend and change this. Questionnaires and interviews Must be carefully designed. Participants may tell you what they think you want to hear Ethnographic analysis Involves assimilating process knowledge by observation Taxonomy of validation methods – Review “experimentation” notes from several weeks ago. Analysis goes from the initial description of the problem to gaining facts and data about the problem that allows you to narrow down your activities towards an effective solution. Where possible, this should be a quantitative analysis, using numerical data. Some problems do not yield such information, in which case the analysis may be qualitative.

The module testing activity:

Process Improvement Goals: Understanding existing processes Introduce process changes to improve quality, reduce costs, or accelerate schedules Industry is demanding increased attention to quality in general Most process improvement work focuses on defect reduction and prevention There are other process attributes that deserve our attention

Process Model Elements Activity - (round edged rectangle) has clearly defined objective, entry, and exit conditions Process - (round edged rectangle with shadow) set of coherent activities with agreed upon objective Deliverable - (rectangle with shadow) tangible output of an activity predicted by project plan Condition - (parallelogram) process or activity pre- or post-conditions Role - (circle with shadow) defined and bounded area of responsibility Exception - (double edged box)) description of how to modify the process if anticipated or unanticipated events occur Communication - (arrow) exchange of information between people and/or machines

OBJECTIVES OF PROCESS IMPROVEMENT TECHNIQUE: If your organization is confronted by a critical need to improve your operations, how do you focus your process improvement activities? Do you launch a program soliciting many local improvements, or do you focus resources in one area for more dramatic benefits and expand? Run everyone through training in how to improve work (e.g., Six Sigma, Lean)? A: Fine-tuning the Performance Engine: The "performance engine" is the ongoing operation of the business day-to-day. B: Process Innovation: Process innovation is the radical redesign of cross-functional, end-to-end processes. C: Making Your Organization Anti-Fragile: Some systems, such as biological ones, gain from disorder. These "anti-fragile" systems love randomness and uncertainty; going beyond resilience or robustness, they get stronger with stress and volatility.

Methodology of process improvement: The Process Improvement Methodology serves as a common framework for understanding the cyclical, ongoing nature of a process. It provides a set of phased activities for analysis of an existing process for the specific purpose of identifying improvement opportunities. The methodology further guides the user through process improvement implementation in conjunction with use of other methodologies as appropriate. Finally, it provides direction as to appropriate process management and periodic process review and evaluations geared toward ongoing improvement. Approach The Process Improvement Methodology is based almost exclusively upon Lean concepts with a hand off to Six Sigma, only if appropriate.

What is Lean? Lean is a management philosophy that originated in the automotive manufacturing industry. Its practical solutions are logically translated to non-production processes and are now being successfully applied to many other areas including information technology, help desk and customer services, administrative operations, and more. Lean considers the flow of the beginning-to-end actions and all the interactions between them as a process value chain—or the “value stream”. Steps are classified from the customer’s point of view meaning that the value of each action in the stream is determined by whether it adds value from the customer perspective— value adding—or does not add value from the customer perspective—non-value adding. Steps that are required but irrelevant from the customer perspective represent a final classification—non-value adding but required.

What is Six Sigma? Six Sigma is a business management strategy that was originally developed by Motorola. Its main focus is to eliminate defects by reducing variations and design more capable products and processes. As with Lean, many of the same tools can be used to analyze non-production processes. It is important to exhaust the Lean approach first, however, because to begin with Six Sigma may cause missing the obvious. Six Sigma-based process adjustments may seem right at first but over time may prove not permanent or even have inadvertent negative impacts on other connected processes. Lean is often described as an inch deep and a mile wide. Conversely, Six Sigma is an inch wide and a mile deep. Lean is intended to review the entire process to identify and eliminate waste within the process, whereas Six Sigma focuses on individual sources of defects to determine the root cause and improve the process to reduce or eliminate those defects.

TOOLS & TECHNIQUES FOR PROCESS IMPROVEMENT Understanding processes so that they can be improved by means of a systematic approach requires the knowledge of a simple kit of tools or techniques. The effective use of these tools and techniques requires their application by the people who actually work on the processes, and their commitment to this will only be possible if they are assured that management cares about improving quality. Managers must show they are committed by providing the training and implementation support necessary.

The tools and techniques most commonly used in process improvement are:   • Problem solving methodology, such as DRIVE • Process mapping • Process flowcharting • Force field analysis • Cause & effect diagrams • CEDAC • Brainstorming • Pareto analysis • Statistical process control (SPC) • Control charts • Check sheets • Bar charts • Scatter diagrams • Matrix analysis • Dot plot or tally chart • Histograms

Process models can’t represent how to handle exceptions Process Exceptions Process models can’t represent how to handle exceptions key people are lost prior to a critical review failure of e-mail server for several days organizational reorganization request to respond to change requests General procedure is to suspend the process model and follow RMMM plans augmented with the managers own initiatives

Process Measurement Wherever possible quantitative process data should be collected Organizations without process standards may have to be define processes before measurements can be made (since they won’t know what to measure) Process measurements should be used to assess process improvements Organization objectives drive process improvement, not measurements

CONCLUSION: The relative importance of main process and its sub- processes may be at variance according to the company because of differences in strategic factors such as mission, vision and strategic targets. No process improvement methodology until now can support adequately all requirement through all phases in the BPI activity. Different methodologies are available for process improvement, and each one has its strengths and weaknesses. The large number of these methodologies can make any organization confuse when choosing the appropriate methodology because all the methodologies share many common features. There is no completely failing methodology or perfect one, but each one has strengths and weakness. Generally, there is no common methodology for all organizations.