When a company creates a process improvement project, it needs a means of knowing not only its current performance levels, but also a way to measure its improvement. Typically, critical metrics are defined to measure process performance. The metrics that a team selects to judge process performance must be measurable, unambiguous, and understood by everyone involved.
Often, metrics are determined based on what the customer (internal or external) considers important.

There are two major categories of metrics: customer driven, and company driven.

Typical customer driven measures include:

Accuracy
Customer satisfaction
Timeliness
Product performance
Product cost
Service level
Value or ROI

Error rates for specific processes
Resource utilisation
Unit cost
Profit

Companies will have measures of the entire process (total number of widgets shipped today) as well as measures of sub-processes (number of widgets painted red in color today). The measures of sub-processes help an individual worker understand the impact he has on an entire process (they cannot ship any more widgets in a day than can be placed in a box and the shipping label applied to, even if all of the other processes doubled their output).

Measuring process performance is not a one-time activity. Companies need to constantly be listening to customers to detect when their needs change, and to benchmark their performance against competitors to ensure that they do not fall behind. The channel of communication with workers must also be maintained so that companies can immediately learn of problems or issues in a process and take advantage of workers’ ideas. The change to a customer-oriented company requires emphasising measures that are customer driven and focused.

2. Value Mapping

There are a number of techniques and tools that can be used to help analyse and improve a process. When looking for opportunities for improvement, value mapping can help to show the team where time and resources are not being used efficiently. Value mapping entails going through all of the activities in a process and determining if they are value added or non-value
added. One of the best ways to value map a process is to gather the team and as a group determine if an activity is value added or non-value added. Value added activities are those activities that the customer is willing to pay for, the first time they are performed. Reworking or inspecting parts because a piece of equipment is getting old and occasionally makes bad product
are not considered value added activities. Few people want to classify the work they do as non value added, so it helps to have individuals not directly associated with the activity help classify the activity. Although value mapping can be a very beneficial in helping you discover problems in your process, it is still limited.

3. Simulation

The power and accessibility of simulation tools have grown dramatically over the past few years. Beyond providing what is often the first complete “picture” of a process, simulation allows a user to effectively address problems that were beyond the scope of the tools available to them in the past.

Complexity, interdependencies, and variability can be more effectively analysed using simulation than with other tools. The conflicting views of how processes are currently being performed or should be performed, parallel processes occurring simultaneously, and the sheer volume of processes and activities involved all add complexity to a process improvement project.

The cost of simulating various alternatives processes is often insignificant compared to trail and error in the real world. In the past, alternative processes could only be tested by retraining the workers and actually making the proposed changes. If the new process was not superior, the time and money spent training the workers would be wasted and there would be a very real possibility of exposing customers to “bad” products and services.

Because of the power of the new simulation tools, tomorrow’s innovators will invest more in playing with prototypes, modeling marketplaces, and simulating scenarios because that will become the best way to create new value and profitably deliver it to customers. Simulation can create new interactions between people that in turn create new value.

An example of this new generation is a simulation tool improvement teams can create flow charts of the processes they are responsible for improving. Instead of being limited with static flow charts that only provide a graphical representation of the process, users of the tool can animate the process, allowing users to actually watch the items being processed travel through the process. By including some basic data on activity times, costs and resources, improvement teams can accurately determine where in the process the company has the greatest problems (slow processing times, backlogs of work, excessive rework cycles and costs, poor resource utilisation, etc.)

Another benefit is that once the problems have been identified, improvement teams can test proposed solutions (do “what if” analysis) on the computer simulation. Now, decisions take on new levels of confidence and predictability. You’re fully aware of the effects of changing processes long before you begin implementation. Confident in your plan, you’ll implement just one set of changes in the real world—the right one.

4. Analysing and Improving a Process

Once the process to be improved has been selected, documented, and measured, the team can actually begin to analyse its performance and make improvements. In some cases, managers and/or workers are aware of the problem and what is required to fix it. Other problems are complex and the root cause is not readily known.

There are a number of things that improvement teams can look for in a process to help them improve it.

• Large amount of information exchanged between workers, data duplication, and redundant data entry. These characteristics are typical of processes whose natural flow has been interrupted by the need to keep artificial boundaries intact at a company. The goal should be for workers to pass completed work from one area to the next, not just information. There is usually no reason for the same information to be entered and stored on more than one system. The data entry process should be optimised so all information about a customer is captured one time and is easily accessible to all workers that may need to refer to it.

• Excess inventory, work-in-progress, and buffers. When a company does not have a handle on customer requirements, good work load scheduling, or an effective supply system, buffers of excess inventory will often be created and staged at different points in the process. This is not only a poor use of resources, but it is also very expensive for the company. To stop this practice, the company has to improve the way it works with customers to better understand their demands, and improve its relationships with suppliers so that work can more efficiently flow through a process. Ideally, the demands of the customers will immediately pass on to suppliers so that everyone is working together.

• Large amounts of checking and inspection. Some level of quality control will always be warranted in a process. It is one of the ways companies ensure that the customers’ needs are being met. Some industries such as medical products also require that specific quality control and verification functions be performed. The issue the team is looking for is whether or not workers have to perform excessive quality control checks because work is being performed incorrectly at one or more upstream processes. The team must be careful here not to concentrate on making the inspection process more efficient, but instead concentrate on eliminating the actual cause of the problems.

• Rework and multiple iterations of work. Any time a company has to perform work again because it was not performed correctly costs it money. The project team needs to determine how incorrect processing can be caught as it happens, not at a downstream process. The team must be careful here not to concentrate on making the rework process more efficient, but instead concentrate on eliminating the errors that cause rework being required in the first place.

• Excess complexity and special procedures in a process. All too often what should be a simple process is turned into a complex mess because of excessive numbers of exceptions and special cases to the way an item is processed. If processing of a small number of items is so different than the majority, then teams should look at keeping the process followed by the vast majority of items clean and simple, and create a special process for the exceptions.

Analysing a process to determine where the real problems are located is not a simple task. In many cases, teams will detect a problem in one area of a process and concentrate on solving it, when what they are really detecting is actually just a symptom of the real problem located in another area of the process. The data gathered can be useful in helping highlight the fact that there is a problem, but it does not necessarily indicate which area in the process is not working well. That is the role of the improvement team.

Process Improvement Phases in Detail

Phase I – Familiarisation and Project Planning

The amount of work involved and the resulting time required to perform a specific phase of a project will vary with each project and be dependent upon the project scope.

In this first phase:

• The project team evaluates the operation of interest and reviews process flows. Constraints and limitations are noted.

• The team reviews base data and the sources of data that are available, and lists any assumptions that are made.

• Any required information found to be missing is identified.

• A schedule and work plan (detailing resource activities) for the next phases of the project are generated.

If a simulation tool is used:

• The project team establishes the modeling parameters and determines what aspects of the system need to be modeled to make valid decisions about what changes are required to improve the operation.

• The specific functionality requirements for the completed model (model inputs and outputs) are determined.

Phase II – Data Collection, Measuring and Documenting the Current (the “As Is”) Process

In the second phase of a project:

• Final decisions about the scope of the project are made.

• Missing information identified in Phase I is collected, collated and analysed. Progress of the team is not allowed to stop because data is not immediately available; best estimates are used until any missing data is gathered.

• The key deliverable of this phase is a document (such as a flowchart) of the current process.

If a simulation tool is being used:

• Final decisions about the scope of the models are made.

• The key deliverable of this phase is a functional model of the "as is" process. The development of this model is the start of every improvement project.

Phase III – Validate Documentation of the Current (“As Is”) Process

In this third phase:

• A test and validation plan is created and executed to verify the documentation accurately represents the current process.

• The validity and accuracy of input data is verified.

If a simulation tool is being used:

• The output of models is compared to the performance of the current process to ensure they are in agreement.

Note: The validation of the documentation and model (if used) is critical to the success of the project. If the managers and staff involved with a process are not confident that the documentation and model of the present system ("as is" model) accurately reflects what is currently happening, they are unlikely to support the proposed changes ("to be" model) resulting from the project.

Phase IV – Analyse Current Process (“As Is”), and Develop Alternatives (”To Be”)

In this fourth phase:

• With a validated model of the current process created, work then begins on analysing the process to begin finding the most critical problem areas. The goal is to determine what changes can be made in the process to result in the greatest benefit.

• Models are generated of proposed alternatives ("to be") to the current process. These models will be used to test the ability of the new process to correct the problems found in the current process. Criteria such as throughput levels, resource utilisation, and costs are considered in a manner agreed to in Phase I.

If a simulation tool is being used:

• Simulation tool is used to analyse the current process to determine both what is working, and what needs to be improved.

• Models of proposed alternatives are created and simulated to test the ability of the new process to correct the problems found in the current process. Criteria such as throughput levels, resource utilisation, and costs are considered in a manner agreed to in Phase I.

Phase V – Documentation and Presentation of Results

Key deliverables for a project will include:

• Delivery of the documentation created for the project ("as is" and "to be").

• Presentation of the results of the project. The presentation will show the current process and the proposed processes. The presentation will not only inform the workers and managers directly affected by this project of its success, but show other groups how this new technique can be used to analyse their own processes to improve them.

• Documentation will include, but not be limited to, complete flowcharts, data and resource files used in the project, and all assumptions used in creating the documentation.

If a simulation tool is being used:

• Delivery of the actual simulation models created for the project ("as is" and "to be") with complete documentation.

• Presentation of the results of using a simulation tool. The presentation will show the successful use of simulation software to accurately model the current process and the proposed processes.

• Documentation related to the use of a simulation tool will include, but not be limited to, complete simulation model files (flowcharts, data and resource files) for all models created, listings of all model data (input and output) in a standard format (Microsoft Excel, Word) including all assumptions used in creating the models, and complete output reports of simulation results. Potential areas of improvement will be highlighted. Documentation will also include information on how other groups can use these models to help with their own processes.

Phase VI – Implementation of Process Change

Implementing the recommendations of the project will include:

• Creating the process documentation of the new process. This work performed in Phase V, Documentation and Presentation of Results, will provide an excellent starting point.

• Training programs for affected personnel need to be created.

• Actual training of the affected personnel will be carried out. Extra support should be provided at the beginning to ensure as smooth a transition as possible.

Phase VII – Review Results of Process Change

Reviewing a project involves:

• Ensuring that workers are performing the process in the correct manner. Workers cannot be allowed to revert back to the old process.

• Key metrics need to be continually monitored to determine if the predicted results are being achieved.

• Feedback from workers should be solicited to see if there are problems, issues, or additional benefits that team may have missed.
  

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