Before you can effect any Process Improvement you need to have a clear, accurate and reliable picture of the AS-IS condition of a Business Process in terms of its Key Performance Indicators (KPIs). These KPIs can be measured against SLAs if it is outsourced, or in the Shared Services context. In case it is not outsourced, companies may need to benchmark their KPIs against the Industry Best. There is hardly any point in improving a Mortgage Loan Processing process from 21 days to 20 days when your competitor has an online system and they do the same process in 5 days! Sometimes you may need to leapfrog over your own old benchmarks! Incremental process improvement may not help you face the competition effectively, in the marketplace!

This article Business Intelligence Adds to Process Reengineering talks about this very eloquently. The authors make the point that relevant KPI performance data needs to be collected consistently all the time.

They make the point that sometimes all this data may be spread in many places and need to be collected in one single set of data tables using Extract, Transform and Load (ETL) functions. Analysis in terms of dashboards and alerts can then be of use in process improvement.

This is the classic problem many business processes have. They are all run end-to-end with multiple heterogeneous software systems in the background. If the process is outsourced or parts of the process is outsourced, then data gets dispersed between multiple companies. This makes it very hard to assemble ALL of the relevant KPI data in one place.

For example, let’s say in an Order to Cash process, the collections part of the process is outsourced to an external vendor. This company has all the data upstream and downstream, but in between for the collections process, the data is in the vendors’ systems somwhere else.

This is where measurement is usually done with whatever is available, rather than what is needed for meaningful analysis and improvement!

Business process improvement is not possible without the collection of the right data at the right time and making it available in the right form to the right people. Easier said than done! Legacy considerations and history of processes within companies still support a Functional View of operations (Finance, Marketing, Manufacturing, etc) rather than a Process View. WIth increasing automation and shortening process cycles, this is becoming somewhat easier!

The best performance improvement is the transition from the non-working state to the working state - Anonymous

Value Innovations are a very useful concept pioneered by people in Competitive Product and Services Positioning. Analyzing the various of dimensions of Value of products or services as perceived by customers leads to competitive positioning that can lead to success.

McDonalds restaurants always sold very inexpensive coffee. However they wanted to compete with Starbucks in the Coffee department. They have introduced a new line of coffee products, somewhat more expensive than the ones they offerred before but less expensive than the ones at Starbucks. Starbucks was not serving the segment that was unhappy with the McDonalds coffee but did not want to pay Starbucks prices. They found innovation in Value. This can be value in the sense of Price, Quality, Speed of Service etc.

The same Value Innovations are applicable in Business Processes when it comes to Process Improvement. Customers are very used to paying different prices for Package Delivery all the way from Next Day to 3-Day to Ground Delivery. Their expectations are all the Value they want out of the delivery process. They fully expect to pay different prices for the different levels of service.

Credit Card companies have started authorizing applications instantly online, sometimes allowing them to apply in the context of an online purchase, allowing them to charge that purchase with the online authorization that happened just seconds ago.

Technlogy in the form of Business Rules Engines, Workflow Solutions, Online Credit Reports, Online Databases of various kinds, etc allow business processes to be designed to allow a number of Value Innovations to be added to the business process.

Business Process Improvement stands to benefit a great deal when combined with technology and Value Innovations. It offers the company to effect competitive strategy when it comes to products and services.

Something to think about when pondering process improvement!

To innovate is not to reform - Anonymous

Mizen Boushi is a Japanese term (Used in Toyota Product Development Systems and others in Japan) for Mistake Prevention or "designing in quality". It seems to be a cousin of Poke Yoke which is on a smaller scale, "mistake proofing", on physical things. The notch in your Mobile Telephone SIM card is a Poke Yoke method to make sure that you can put it inside the mobile phone in only one way!

Mizen Boushi in Product Design is making sure that manufacturing mistakes or assembly mistakes cannot be made by altering the product design itself in such a way that mistakes are not possible. For example, car platforms and subsystems like chassis, drive trains, engine assemblies are standardized and tested in so many models that by now you have a very good idea of how reliable they are and how easily manufacturable they are without making quality mistakes.

Then each year for a major automobile model redesign or minor redesign for that model year you just redesign the external appearances, body, etc leaving the component systems the same. This way you are reducing the total number of mistakes that can be made in the whole design and manufacture of the car.

Mistake proofing or Mizen Boushi is just as applicable to business processes or service processes just the same way they are for product design and manufacturing.

People, Process and Tools can be addressed systematically for mistake proofing business processes.

Mistakes are made with people with respect to capacity or capability. In a business process if there are not enough people with the right skillsets at the right time to meet demand at that time, capacity mistakes are made. If enough people with the right skills are not available in a business process or service process, then capability mistakes are made. Multiskilling of people is a very effective way of addressing both problems. The more the breadth of skills of people involved in a business process, the more the organization and the individual get out of it. For the organization, they can leverage people in other business processes that do not have enough to do in those that have peak demand. For the individual, being useful in multiple parts of the organization, and needed, results in higher morale!

Process mistakes can be avoided by initial and ongoing training and extensive on the job training with periodic skill upgrades. Extensive documentation of the process as well as easy and ready access to these while doing the job (like online PDF documents, for example) can all be good ways to reduce process mistakes.

Mizen Boushi can be implemented extensively in Tools. Most business processes use software applications or products as tools. Extensive onscreen validation of what is being typed in, as well as clever mistake proofing can go a long way. For example, instead of asking for the city and then the zip code, have the person type in the zip code, the system pulls up the city and is verified. Mistakes made in typing in the city wrongly can be avoided. They can all be simple things by themselves, but together, they add up to more prevention of mistakes! Monitoring of system availability, usability studies, monitoring of system response time, monitoring of network availability can all be other mistake proofing techniques.

Mizen Boushi can just as easily be applied to business processes and services!

It’s always helpful to learn from your mistakes because then your mistakes seem worthwhile! - Garry Marshall

Accidents and Traffic Jams have a lot to teach about Capacity Planning for Business Processes!

Whether it is Claims Processing or Home Loans or Help Desks, processes invariably deal with traffic jams.

Usually, there could be long, serene periods, when things are flowing smoothly; no customer is waiting on the phone long enough to be annoyed, and the people providing the service are not overworked and cranky!

Then there are peak periods in a Year when processes see Peak Volume - Day of the week, Month ending, Quarter ending crush or Annual crush (like Tax return time for tax preparers!) when peak volumes of work are seen in short bursts confounding the most diligent of capacity and work force planners!

Traffic Jams have taught traffic planners that when 70% to 80% of the capacity of any road is fully used, any small perturbation will cause massive slowdown for everyone. If an accident happens in one lane, every lane slows down because cars in the lane where the accident happens slow down to merge with the lane to their right or left whichever is available. This makes the entire traffic slow down even if you have five or six lanes each way!

The effect of any perturbation is less and less felt as the capacity utlization at any time is less than 70%. There is enough spare capacity for the other lanes to take up the slack and you may not have a traffic jam that requires everyone to slow and stop.

In a Business Process, capacity planning can always benefit by keeping the overall utilization less than 70% at any time. Novice managers may look at this and say that this is a waste of resources. But compared to the agony and customer dissatisfaction that may be caused by traffic jam equivalents in Business Process, and the consequent delays and waits you may subject customers to, this may be a small price to pay.

One of the things striking about Toyota or even many other Japanese automobile factories is that for the first two years they really do not care about the production throughput that much. They are using that time to fix problems by addressing root causes permanently!

When these factories are in full production, unlike other automakers they may not run their assembly lines in three shifts! Most of these plants do only two shifts and the third shift is used for finishing up planned production for the other two shifts as well as addressing root causes of problems faced in the assembly line as well as preventive maintenance of the facilities.

This ensures that everyday’s production schedule is met, you may have fixed problems before they occur, permanently. Preventive maintanance ensures that machines are inspected, lubricated and ready for the next day!

Business Processes should use the same concept and never plan for using capacity any more than 70%. This way, in the long run they may come out ahead rather than attempt for more utlization than the 70%. You may come out ahead on efficiency, but your effectiveness may have suffered irreparably!

Something to think about!

He who fails to plan, plans to fail - Proverb

Automobile Design is a very intense process in a very intensely competitive industry. Design of new cars used to take five years plus, even as far back as ten years. Now the industry average is becoming around 3 years and the Toyota Prius design cycle was slightly less than two years end to end.

These days, automobile design has been greatly helped by building different versions of cars on the same standardized, tested, proven platforms of chassis, engine, etc, The design is more about mixing and matching slight variations of basic designs with more expensive cars getting better fit and finish, reduction of noise with better mountings, door being more flush in its place etc.

Design tasks for completely new automobiles are mixed in with updates for current model years, and you can see that the design people are kept busy throughout the year. Plus, it is a highly sequential process where the basic design paper is converted into clay models, the specs for different sub systems worked out and then the setting up of the manufacturing preparations like stell sheet stamping Dies (for doors, body panels, etc), etc to be done before production starts. So just like a business process, different steps are very sequential and deadlines are to be met without any letup. Missing any process step may mean others downstream may miss their own crucial deadlines putting an entire product line in jeopardy.

This is where project management systems like the Toyota Product Development System can teach us two major lessons:

a. Interveaving of Process Steps Reducing Waste of Time of Resources, especially people’s skills.

b. Multiskilling and emphasis on Breadth of skills in addition to increase in Depth of skills.

When one specialist in Die design is done with the design of a totally new stamping die for a new model, may immediately get a die review and redesign assignment for a Model Year update (minor changes if at all from one model year to another). This is to ensure that the resources down the Design Production Line always have something coming down the assembly line for them to work on.

No waste of time of highly skilled, valuable resources.

The second major aspect about the Toyota Product Development System is the incredible DEPTH of skilled people in one discipline plus increase of the BREADTH of skills in other automobile disciplines also, without fail. This will ensure decrease of mistakes in process handovers and also incredible empathy for the downstream people, A design engineer may have also spent lots of time on the manufacturing floor before coming back to design. So when they pass on designs on to manufacturing they are already aware of the potential problems and pitfalls in the next steps.

What does this have to do with Business Processes, especially in Services? Everything. These lessons are very applicable and valuable in any business process. Most business processes are like assembly lines in that they may already be using a queue approach to managing peoples’ time within the business process.

However may call centers’s holy grail is First Call Resolution - resolving the customers’ problem over the phone, chat or email, the very first time. This is not possible without multiskilling. If the first level call taker can resolve problems also in addition doing call routing, in case they don’t have the skills to resolve a problem. Many problems are repetitive ones with simple answers that can be closed by the first or second level support people.

Providing more autonomy and equipping them with multiple sets of skills goes a long way in achieving First Call Resolution.

Nothing is a waste of time if you use the experience wisely. - Auguste Rodin