The One Thing… Process Part 2

Operations Focus

By Tim Connor, Rodeo! Performance Group, Inc.

In Part 1 series, we looked at the importance of beginning with the customers’ needs and requirements to properly design a process. In this concluding piece, we’ll look at both process design and the basics of process improvement.

Designing a Process: What Do You Want?

Once you know what the outside customer wants, your next step is to clarify those wants into measurable outcomes – related wholly to the customer’s specs.

Why is this step important?

Because conformity to those specs is your competitive advantage, a principle which holds true today no matter what your business is, or where in the world it is conducted.

Beginning with customers, there are three primary objectives every business process should meet:

1) it should be effective, or produce the desired results the customer is looking for.
2) It should be efficient, using the minimum resources necessary to produce those desired results.
3) It should be adaptable, have the flexibility to meet changing customer and business needs.

It might seem like an exaggeration, but U.S. businesses have become lazy when challenged in these three areas. Their focus on the efficient part of the process, minimizing resources, is evident in the rise of the CFO as a major force, with cost-cutting now the major response to challenges from outside.

If you hear that and it sounds reasonable, consider the long term effects of a “cost only” concentration. It reduces the ability of your company to deliver products and services. This is a kiss of death where customers are concerned, because those products and services are why they’ve dealt with your company in the first place. It’s also resulted in reduced quality of products, another killer when it comes to customers who want value for their hard earned (and rapidly dwindling!) dollars. Finally, it’s resulted in portions of our businesses, or even whole businesses, being moved offshore. Offshore moves mean –in the long run – those industries will become the industries of the country where they’ve been moved, and no longer the solid underpinnings of the United States economy.

For processes to be improved and remain competitive, all three of the primary objectives have to be addressed.

Applying the Primary Objectives

We’ve already looked at how to address Objective 1, Producing The Desired Results, so we’ll move on to Objective 2.

Objective 2, Making The Process Efficient, is second in importance.

Notice it’s second – if you aren’t making sure that your efficiency is continuing to produce the best product, you have begun a death spiral with your business. While the imperatives for efficiency are most often begun at an executive level, it’s the STAFF doing the process who can usually provide the best returns here. Why is that? Because it’s the people doing the process who have the best idea of what’s needed, since they do it every day.

Process efficiency looks at things like…

• Cycle time per unit, or cycle time per transaction for a service. In other words, How long does it take to make each thing you make? Or, how long does it take you to complete a transaction with a customer? Time is money, of course, but cycle time doesn’t monitor hourly wages. The less time it takes to make something, or to finish something, the more transactions or items you can produce. Time is capacity!
• How many resources, how many people, are needed per unit of output? Knowing this allows you not just to monitor costs, but to predict and plan for future needs.
• What are the value-added costs per unit? This is a little more abstract, but it’s a monitor of the steps in the process that actually add value – value to the customer – to the product or service.
• What are the non-value-added costs per unit? Believe it or not, most processes have steps within them that add no value to the product in the customer’s eyes. BUT, they still may be critical: preventative maintenance procedures come to mind. You need to know what these steps are.
• What is the cost of poor quality? This starts with understanding what poor quality is within your product or service. And then it moves on to looking at the consequences of poor quality. Only when you identify the actual problem, and the actual consequences, can you move on to classify the actual costs.

Objective 3, Making The Process Adaptable, is third in importance. This one is quite often ignored in businesses, and results in some dire consequences.

Process adaptability is the ability of the process to meet future customer requirements. As technology expands and expectations of products and services change rapidly, businesses have to be ready to change to remain competitive.

Examples of changes like this include the tracking of shipments while en route, an innovation introduced by UPS that caused immediate scrambling by other carriers to seek to keep up. Such a change as that one often mandate complete scrapping of an existing process because it will never meet the new expectations. Re-engineering is then called for.

Review Your Processes Now

Taking the time to walk through your business’s processes will pay dividends far beyond the hour or so per process a quick review will take. Edwards Deming, who invented many of the process management approaches used today, estimated that between 80 and 90% of all process steps are waste steps, and can be removed from processes using process analysis tools.

Would it make a difference to your company if you could reduce your product cycle time by 40-50%? That’s effectively doubling your production capacity! What about customer response processes, how many complaints would go away if you reduced turnaround there by 20 or 30%? Would that bring your customer loyalty up? How about repeat sales? Take the time to do it today, it’s worth it!

The One Thing… Process Part 1

Operations Focus

By Tim Connor, Rodeo! Performance Group, Inc.

What’s The One Thing that business owners can focus on to simultaneously reduce costs, improve morale, and kick revenue up? The business process. Processes are simple, and anyone can understand their basics. The dangers with processes lie in their repetitive nature and how often they happen in a day. If a process is done wrong, it will be done wrong A LOT! That is expensive!

What is a Process?

Processes are the building blocks of business, all our internal and external services are based on them. Taking an order? It’s a process. Building a widget? It’s a process. Making a sale, dealing with a customer complaint, readying a bill? You guessed it, all of these activities are processes.

In its essence a process is a series of steps that are gone through to produce either 1) a service, or 2) a product. Makes sense, huh? Without processes we couldn’t do work,. But the problems arise from the attention we pay to our processes, whether it’s a little attention or a lot.

The End Is Where It Starts

How’s THAT for a weird statement? But think about it: isn’t the end-in-mind where you have to begin in order to know what steps should make up the work? If you’re building a monkey wrench, you need to know what a monkey wrench looks like. Unfortunately, that’s where many businesses stop – what should it look like? If you take this approach your first step will be to copy what is already out there. To build a mortgage service, you’ll look at all the other mortgage services to see what they’re doing. To run a medical practice, you’ll make a list of what all the other practices normally do.

But how about adding a little twist? What happens when you start with asking yourself: What does the end customer want from this product or service? That actually drives a very different train of thought.

Into the Mind of the Customer

To clearly define the end-in-mind you have to consider what the customer is looking for in several arenas. Customers are looking for value in the purchases they make, and in times of economic challenge that will be more true than ever. Where do they place value?

• In the utility of the purchase – Does it do what I need it to do?
• In the durability of the purchase – How long will it last and continue to do what it was purchased for?
• In headaches and repairs – How much repair and maintenance will be needed?
• And finally, in price – How much will it cost?

While cost may come up early, it is rarely the top consideration for a purchase. Durability, maintenance, utility – the better these are the higher the value in the eyes of the customer, and the more they are willing to pay because they KNOW they are getting value. These needs and wants provide the “Why” for the way you operate your business.

So you have to begin by defining what the customer wants before you can begin laying out your processes. And the more clearly you define those wants and needs, the better you’ll be able to design your processes.

The Missing Link: Designing Your Processes

Believe it or not, most business service processes are not designed at all. You heard me right – they are not designed at all. In a small business, processes come about because the original person does it a certain way, and gradually that becomes the way that process is done. Is it a good way to do it? We don’t know, it gets the job done, so we do it that way!

Early on, there might be some efficiencies in the process because the original person does it all, and usually works to do it better. But as a business grows, other duties come in, and suddenly the process begins to morph into something different. Over time the original process owner is either promoted or leaves for another job, and the process is taken over by another. Gradually over months and years, the process gathers steps the way Velcro gathers lint, and then you have a lot of steps that aren’t producing value.

As You Get Bigger It Gets Worse

The real headaches begin as the business grows, which (hopefully) all good businesses do. New people come into processes, and the busy nature of the rest of the staff means that time isn’t taken to train them on the “Whys” of the process, although they might get the “Whats” (as in what to do). Because they don’t know the why – and remember, the “why” is based on the original needs of the customer – any changes the new worker makes might not make the process produce a better outcome.

There’s another problem too. Most processes depend on other processes for at least part of their input. This is true in any business, but it becomes more evident – and critical – as a business grows. How’s that? Here are some examples…

• the Billing process depends on data gathered from Sales
• the Production process depends on data gathered from Sales
• the Sales process depends on data taken from Reception
• the Shipping process depends on data from several places.

See what I mean?

So What Do You Do Now?

One of the easiest steps you can take to begin improving processes is to review your picture of client needs and wants. A clear picture there will go far toward shedding light on the value of process steps.

We’ll get into other activities for improving processes in Part II of this series.

The Five S’s of Lean

Operations Focus

By Tim Connor, Rodeo! Performance Group, Inc.

Lean is an approach to process improvement that is well-known in manufacturing, but which can be applied to any process. These “S’s” originated in Japan, and help build an environment conducive to a smooth-running process.

Lean is an approach to process improvement that is well-known in manufacturing, but which can be applied to any process. These “S’s” originated in Japan, and help build an environment conducive to a smooth-running process.

Sort

Begin by eliminating unnecessary items from the work area. “Red Tagging” is an effective visual method used to identify unneeded items, which can then either be moved to a central holding area or discarded completely. This step frees up valuable floor space, removes broken or obsolete tools and fixtures, and makes it easier to focus on the job.

Set in Order

The second S focuses on careful storage so the job can be carried on effectively. These are the questions to be asked:

• What do I need to do my job?
• Where should I locate this item?
• How many of this item do I need?

Other strategies for Set in Order are painting schemes that support the work, outlining work areas, shelving and cabinets for necessary items, and standard places for tools and materials needed every day. “A place for everything and everything in it’s place” is a good American version of this S.

Shine

Once the first two steps are completed, and the work space is clear with needed work items in their places, it’s time to thoroughly clean the work area. Why? Because a clean and orderly area makes work easier, raises morale, and really helps staff take pride and ownership in their work and work space. A clean area also makes it easier to spot leaks, deterioration of equipment, misalignments, and broken parts that ultimately lead to equipment failure and loss of production. The impact of the clean work space will show itself in several ways on the bottom line.

Standardize

This step should always involve the staff from the job or area. There are always best practices within a work function, and the first step is to find these practices and bring them to the table. The staff discuss these and come to agreement as to the best, making these the standard for all work in that particular area. But don’t stop with internal best practices, encourage staff to look outside the company, even in other industries. Southwest Airlines benchmarked the Woods Brothers pit team in NASCAR to see how their fast, effective turnaround of vehicles might have application in the airlines.

Sustain

This last step aims at keeping the new changes in place, and it’s the toughest to implement. Why? Because people build habits, and even when those habits are tied to poor methods of work, they’re used to them and find it hard to change. Find ways to reward maintenance of these new changes, especially during the first 3 months. You will find production up, and morale and company pride on the increase.

Five Keys for the Innovator

Operations Focus

By Tim Connor, Rodeo! Performance Group, Inc.

Improve it. Adapt it. Replace it. Expand it. Shorten it. Some of these approaches seem at odds with others; but all can be used by the innovator to make a product or a service more effective – and thus more marketable. Isn’t that why we’re in business?

Improve It

Why do people buy what you’re selling? Isn’t it because it meets a need they have? Sure. But people buy repeatedly because a product meets more than one need, and the more needs met by a product the more loyalty your customers will have. To improve a product you have to keep searching out the needs that people have – and some of them take some real digging! For instance, in today’s market price is seen as critical, and the move for the last several decades has been to lower price. But what about quality? Quality is that something that makes a product last longer, a service more effective. And while a customer may be dazzled by the price, over time he realizes that a high-quality item endures, and requires less effort to keep it going.

So the first key to innovation is to constantly ferret out the changing needs of your customer. As a new need is discovered, your product can be improved and Voila* – your market expands!

* French for “Hot Dog!”

Adapt It

Sometimes small changes to the construction of a product, or small changes to the delivery of a service, will open up more sales. An example is the Hummer military vehicle, which began selling to a small (wealthy) civilian market. After seeing success there, the company brought out the Hummer 2, adapted to be much roomier, more comfort-able, and less expensive – although it no longer met the original military specs. Sales increased considerably.

Replace It

Sometimes a company’s product just doesn’t meet a need any more, and needs to be laid to rest. This is where monitoring customer feedback pays big bonuses, because it makes it easier to predict the coming demise of a product, and allows new products to be developed before revenues begin to drop. A good example is the company Ridgid, which has long been known for high quality tools for steel and iron pipe. That market began to dry up with the advent of PVC, and the company has responded by introducing a line of consumer power tools, which is now being marketed by a national building supply house.

Expand It

Exploring new uses for a current product is not often investigated, but can yield big results. My personal favorite involves a local piano tuner who re-ordered heating devices for his local customers and found that the product was about to be discontinued. He bought the rights (and the old inventory), and just for grins displayed it in a national gun show. The product’s damp-chasing ability immediately interested that market, and he’s now expanding it into electronics and avionics. Same product, but now a market that’s literally one hundred times bigger.

Shorten It

This key isn’t about the product itself, but the process that makes it, or the service that supports it. When you can shorten the time it takes to make a product, without compromising quality, you make it more available and sales will increase. That shorter time also means lower production costs, which is worth the pursuit.

But don’t forget the supporting services. Faster delivery times always mean happier customers. The same goes for immediate answers to questions, and quicker responses to issues and problems. People like getting good service, and will often pay a higher price to get it. Keep that in mind.

Emergency Room Throughput Part 2: Removing the Blockage

Operations Focus

By Tim Connor, Rodeo! Performance Group, Inc.

There’s a lot of work going on in Emergency Rooms across the country, using approaches from operational excellence to lean to six sigma, but how many are actually making gains that last? Goldratt’s Theory of Constraints seems to show that the answer lies in the Inpatient Process. This is Part 2 in a 3 part series.

An Overview of the Situation

In Part 1: Blocked Arteries!, we had discovered that the highest corporate goals were producing radically different – and conflicting – activities among the staff in different departments. In this article we will review the next steps that resulted in the removal of the blockage, and how it set the stage for greatly increased throughput in the Inpatient Process, and subsequently in the stagnant Emergency Process.

How Throughput Is Measured

Before picking up on the activities followed by the throughput team to relieve process blockages and improve Emergency through-put, it would probably be a good idea to identify key measures for success.

In a hospital, as in any organization, it’s important to be able to monitor process flow. Manufacturing usually focuses on the production of the manufactured goods. A mortgage company will monitor the speed with which the mortgage is put together and delivered. A hospital, in the same way, must monitor how quickly and how well the patient is diagnosed, treated, and moved through the hospital system. The “how well” or quality measure for the hospital inpatient is indicated in the outcomes of the care, usually by monitoring returns for care, either in re-admissions, returns to surgery, or similar indicators. The “how quickly” measure is demonstrated through length of stay, how long the patient is in the hospital for a given diagnosis. It’s important to understand that the goal here is an optimum length of stay: the shortest stay possible while still maintaining excellent clinical outcomes. Hospitals have to balance the two to be world class.

The Constraint to Throughput: The Inpatient Process

Dr. Goldratt had postulated in his Theory of Constraints that every organization has a constraining process, one that holds all other processes back from producing at a higher output. Since most of the hospital conflict diagrams pointed to conflicts with Inpatient, the decision was made to focus the team efforts there.

What Would the Payoff Be?

Understandably, executive staff was concerned that the process be worth the expenditures in time and money, so a pro-forma was done by the consulting firm that analyzed bed-days. A bed-day was defined as “a patient in a bed for one day”, and since reimbursement is a fixed amount for a given diagnosis, shortening the length of stay would allow more frequent use of the bed – or more bed-days. If the bed can be used more frequently, which occurs if the patient’s stay is shorter, revenue would increase because of the increased volume. The caveat was that clinical outcomes could not be compromised, the patient had to come out just as well, or better, than before the shortened length of stay.

The pro-forma showed that the hospital had the potential, by shortening length of stay through speeding up the Inpatient Process, of generating about $12,000,000 in new revenue! This could be accomplished by reducing length of stay by one day, or 24 hours. The question was, could the length of stay be shortened that much by cleaning up the Inpatient Process?

Getting to the Root of Things

So, assuming that throughput in the Inpatient Process was critical to throughput in Emergency, the team got down to business systematically identifying “pinch points” within the Inpatient Process. The interviews with staff and physicians had provided much input on common issues, and the further work by the PI Department narrowed those down to about 20, of which 12 were really actionable by the team.

The focus of the team at this point was to speed up operation of inpatient care, and to do that the root causes of the 12 targeted pinch points had to be identified. It was here where some of the biggest surprises came. Prior to this the team (all of whom were well-trained in process and problem solving tools) had done root cause analysis, but not to the depth the TOC tools required. During the ensuing probing breakdown of issues, it was found that many of the deep root causes were “linked”, or had two causes that had to happen at the same time, for the problem to occur. As these causes were isolated, team members brainstormed solutions which were then tested in a limited fashion for effective-ness.

An Example of Effective Findings

To give an example of one key finding of the team, we’ll focus on the lab’s interaction with the patient care units.

In order for a physician to make disposition of the patient in a timely manner, he/she must have good lab data, preferably at the time rounds are made so the discharge process can be begun. The team found that blood draws, although frequently done as early as 2:00 AM, often did not arrive in the lab in time for the report to be ready for the physician. Further investigation showed that because laboratory was budgeted to a limited number of phlebotomists, lab staff frequently batched the 40-50 draws that were common on first shift. That batching resulted in late draws, and it was regular for time-critical draws to be missed, sometimes necessitating a wait of 30 hours before the draw could be done again. Did THAT contribute to increased length of stay? Guess so!

Length of Stay Comes Down

This lab issue was only one of more than a dozen findings of the team. Over a four month period improvements were put into place, and between April and June of that year length of stay dropped from a high of 5.23 days to 4.34 days – almost a full day. Not too shabby!

As the picture unfolded, it was discovered that the practice of budgeting by function, or department, was a key contributor to inefficiencies in the Inpatient Process. As supporting departments, such as Laboratory, Radiology, EKG, etc. “reigned in” their budgets to meet corporate fiscal require-ments, the effect was to delay delivery of the services Nursing relied on to move the patient through in a timely manner. Final result: Inpatient throughput was constrained

Emergency Room Throughput Diagnosis Part 1: Blocked Arteries!

Operations Focus

By Tim Connor, Rodeo! Performance Group, Inc.

There’s a lot of work going on in Emergency Rooms across the country, using approaches from operational excellence to lean to six sigma, but how many are actually making gains that last? Goldratt’s Theory of Constraints seems to show that the answer lies in the Inpatient Process.

An Overview of the Situation

Performance improvement efforts at the hospital in this discussion were about eight years old at the time of this Emergency Department initiative. The institution consisted of 325 inpatient beds, with an emergency department of 26 rooms, seeing about 60,000 visits annually. Problems included chronic overcrowding in Emergency, often with all ED rooms filled, more than a dozen stretcher patients waiting for a room, and 70-100 more patients in the ED waiting area. The inpatient side of the house was frequently full, and diversion of incoming emergency patients to other hospitals 30 or more miles away occurred several times monthly.

Performance improvement efforts had included team projects related to the admissions process, discharge, bed placement, unit staffing, lab turnaround times, radiology flow, relay of information, and numerous other from clinical and administrative areas.

Previous Activities

My own department (Performance Improvement) had the year before completed a major emergency process redesign involving the coordination of fourteen departments, all directly involved in the flow of patients and information through the ED. We had painstakingly designed ideal flow in the major areas of the larger process, and our recommendations to executive staff had been almost completely accepted, even though the price tag was in excess of $1.5 million dollars. It was discouraging to find that, even after five months of work and enthusiastic cooperation from all parties, there was almost no change in the flow of patients through Emergency.

First Steps to a Solution

At this point we were contacted by a large consulting firm which had been applying Eliyahu Goldratt’s Theory of Constraints (TOC) in manufacturing settings with significant success. They were familiar with our performance improvement process, and felt that together, we might be able to produce similar results in a hospital setting. Initial discussion made it obvious that if we could improve throughput in the Inpatient Process, it would likely open up the “impacted” Emergency Process, so that became our focus. After approval from upper management, the Performance Improvement Department staff began an initial investigation.

We began an analysis by interviewing a large number of employees, and about 1/3 of the physician staff, seeking common issues within the whole process. The results of those interviews, over 200 flip chart pages, were sifted down, with 20 suspicious areas being identified. Using the TOC conflict diagram we were able to identify several major themes of conflict, most arising from shared common high level goals!

Where the Conflicts Start

I should take the time to explain how this situation occurs, as it’s key to under-standing a)the origin of major inter-departmental conflict AND b) the cause of poor performance through the organization. A simple example arises from the corporate goal “Provide high quality clinical care”. Sounds like a good goal, huh? It IS, but watch what happens when that is translated by two different key departments:

Emergency Department Interpretation:

1) If we’re going to provide high quality clinical care, we must get the patient stabilized quickly, dealing with his immediate problems, and…

2) …Get that patient admitted to inpatient care as rapidly as possible.

Inpatient Nursing Unit Interpretation:

1) If we’re going to provide high quality clinical care, we must meet all the needs of that patient, including clinical, psychological, and educational, and…

2) …To do this well, we need the right patient in the right unit (so the best care can be given), and we need the time to provide that necessary care.

Sound innocuous, doesn’t it? Watch what happens, though. Now you have one group of dedicated professionals seeking to get a patient stable and upstairs as quickly as possible, no matter what – “Get ‘em in, Get ‘em stable, Get ‘em admitted!”. But you have a second group, just as dedicated, who want

the extended time it take to ascertain the patient’s current condition, develop a plan of care, implement the care, and educate the patient so that the care can be carried on even after the patient is discharged. “Get the right nurse with the patient, find out what’s needed, give the right care!” You can see, of course, that both plans will provide top notch care, but the result in hospitals is chaos!

Conflict #1…

Emergency: “I don’t care if you have no beds in medical-surgical, put the patient in pediatrics if you have to! Get him a bed!”

Inpatient: “This patient is SICK. He needs nurses who understand his condition, can ask the right questions, and can give the right care! We won’t take the admission!”

Conflict #2…

Emergency: “These patients are backing up down here. We’ve GOT to get these stable people out, so we can deal with the acute patients still waiting to be seen!”

Inpatient: “How can we give quality care when you’re trying to admit 5 patients to this floor? We haven’t finished the last 3 you sent us, and we’re already late with meds – give us a break!”

Is either group in the wrong? Of course not. Both are motivated to achieve the same goal – top quality patient care – but their resulting activities were in direct conflict with the activities of the other department.

And this is only one area, there were a number of others, all contributing to slower inpatient care, which blocked admissions, which backed up Emergency. Quite a mess!

Initial Findings

The result? It was impossible to open up flow through Emergency until we could improve throughput in the inpatient units. And there were so many issues there that we needed to find the critical few that would make a real difference. That’s covered in Emergency Room Throughput Part 2: Removing the Blockage

Defining Hippopotomonstrosesquipedalian

Operations Focus

By Jonathan Connor, Rodeo! Performance Group, Inc.

Forget even trying to pronounce it. The word means: “Pertaining to a very, very long word.” It actually has one more letter in it than its entire definition. Why create such a word, it seems ludicrous doesn’t it? Yet this could very well be an example to us in the business world of processes developed without planning or analysis.

How often do we keep or add unnecessary steps to a process due to habit, tradition, miscommunication, or just failing to keep track of it? For an example, let’s look at a physician. This man was trying to run a business and a practice, write a book, and continue seeing patients. He would spontaneously decide to not come into the practice on certain days either because of working on his book or just not wanting to come in. What did this do for the practice? The staff had to call patients and reschedule appointments. Often it was not possible to reschedule anything sooner than six months out. This caused patients to be disgruntled, often not coming back to the practice. It caused staff to be unhappy with him because of the extra work created and having to deal with angry patients. And ultimately it hurt his credibility and caused his income to greatly decrease. He ended up having to sell the practice building to pay bills, laid off a number of dedicated staff, and had nearly nothing to show for 40+ years of practicing medicine.

This is just one drastic example of what can happen in a service industry when someone fails to pay attention to the effects their actions are having on the business and what steps are added to the process because of it. The scheduling process mentioned could have easily been simplified just by the physician being consistent with his work schedule. How difficult would it have been to realize this? The answer, I believe, is obvious.

It’s important to note in the midst of all this that, when reviewing and revising your processes, you don’t want to throw out the proverbial baby with the bath water. So let’s take a quick look at the two pre-qualifiers for process steps.

There are two types of steps in any process: Value-added and non value-added, as defined by the customer. Value-added steps would be things like creating a longer lasting product, free tech support, or a baker’s dozen. They are things that provide greater value to the service or product you are offering your customer. These things should not be touched unless they can be replaced with something better! After all, the customers pay your light bill, your operating costs, and the paychecks of you and your employees. It’s important to keep them happy. Non value-added steps, as one might deduce, are steps that do not add value to what you are offering your customer. These are such things as providing a break to employees every Thursday afternoon for an in-house back massage or having someone provide a product line report to management every week. Calling them non value-added is not to say that they are unnecessary, but they should be the first steps looked at. You can ask yourself, “Is the back massage providing enough employee satisfaction to make up for the time spent?” or “Is that report needed every week, or at all?” For every step added to the process, time and the possibility for error are also added to the process.

So how does one determine if the step adds value for the customer or not? The best and easiest way would be to ask them. Customers very rarely will hesitate to tell you what they like and don’t like about the business.

Finally, once you’ve identified value-added and non value-added steps, ask these questions about each step:

• Is it necessary?
• Does it make the process easier or more efficient?
• Who’s responsibility is it (is it something YOU have to do)?
• Can it be eliminated with little or no damage to productivity?

A process does not need to run at 100% of its original capability if it is made up for in other areas. For example, a large organization took a week to review one of their processes to try and improve it. They tested jet engines and had a line with seven stands for mounting the engines while the work was being done on them.

Previously, the time to mount each different engine was excessive, greatly limiting the number of engines they could test in a given week. Within a week with a cycle time reduction team they were able to reduce this time to less than an hour. The interesting part, though, was that they were able to make the change to the seven engine stands for only $11 a stand, giving them a return on investment in terms of time

Whether you are in a service or a product industry there is always room for improvement. If you plan the time to look at your processes, whether it is scheduling classes or an assembly line, the results can be surprising. Increased customer and employee satisfaction and increased efficiency are benefits to everyone involved.

Core Process: Getting to the Heart of the Business

Operations Focus

By Tim Connor, Rodeo! Performance Group, Inc.

As you look your business over to make it more competitive, it helps to break it into the basic building blocks at the heart of the business – the Core Processes. These are the laterally running groups of steps that produce the products and services you will either be renowned – or notorious – for!

A Primer on Process Improvement

Since a process is a group of steps leading to an output, approaching improvement through the Core Processes is one of the best ways to achieve systematic analysis and measurable improvement. What sorts of improvement can you seek from reviewing these processes? Actually, improvements tend to fall into a small group, easy to understand. They are…

Predictability. Bringing the process ‘under control’, so that process performance can be accurately measured and predicted. This is important because it gives a baseline against which other improvements can be measured for effectiveness. Effectively: “Did that improve the process or make it worse?”

Cycle Time Reduction. Making the process work faster, reducing the time it takes to get the quality output you (and your customer) want. This increases capacity and can increase revenue. In service processes it is a major factor in customer satisfaction.

Removal of Waste. Making the process both more efficient and more enjoyable for the staff involved in the process. It directly affects cycle time also.

Flexibility. Making the process able to effectively react to changes in customer requirements, seasonal changes in demand, and other changes. It is a major affecter of future viability of both the process and the business itself.

Core Processes in Specific Businesses

So what Core Processes can be found in a sampling of small businesses, just to give us some idea of what should be considered?

Banks. There are three main ways customers deal with banks: in the Lobby, through the Drive-Through, and Online. Each is distinctly different, and a little time looking at the steps of each will pay dividends.

Manufacturing. It goes without saying that the product being delivered had better be high quality and meet customer requirements. But how else do clients, and vendors, interact with the company? Procurement of materials from vendors, and non-purchase-related customer processes are worth study.

Universities and Schools. Because so much funding comes from government, educational entities often neglect core processes related directly to students – their core customers. Enrollment and scheduling processes are considered extremely important to such customers, but often are unwieldy and impersonal, and result in widespread dissatisfaction. Schools might take a lesson from larger banking establishments which, because of negligence in their core customer processes, are now seeing exponential growth in local competition. If the locally run private schools do it better AND provide a quality service, people will start moving their business over to them.

Small Businesses in General. From our own experience with Rodeo! clients, we’ve found that the most neglected processes within small businesses relate to future planning and internal communication with staff.

Future Planning suffers – if it’s done at all – when a business gets off the ground and begins seeing success. The owners get caught up in the day-to-day activities, and planning for future success is put off, and put off, and put off until it’s forgotten in the tyranny of the work needing doing today.

Internal Communication is most often a problem because it’s easy to communicate when the company is starting out, so no formal plan is done (it’s assumed communication will continue to be fine). As the company expands however, and more levels of supervision are added, upward communication – or hearing from employees – weakens. The employees know it, and it makes them grumpy. The owner will see it in slower processes, but the lack of input from front line staff will keep him in the dark as to the reasons for the process problems. This situation only gets worse as the company grows unless specific steps are taken to improve it.

Get Going!

Get the idea? Find the Core Processes for your company and you’re on your way to improvements that will increase customer and staff satisfaction AND improve your bottom line. Get going!