Quite often, Process Design or Redesign are burdened with a lot of Legacy Thought! Sometimes, it may be better to start a Design or a Redesign of a Business Process with a clean sheet rather than make marginal improvements!

Many processes just evolve from nothing, or have a lot of outdated steps that may have been necessary when they were designed for the first time but may be outdated today!

Plus, technology may have evolved over the last two decades a business process has been under use, and now may be a good time to rethink processes. It may be time to evaluate whether what it being done inside the process is of any use, and of relevance today, or may be better done at an order of magnitude more efficiency and effectiveness than used to be done before!

Sometimes, it may be better to start with a clean sheet and design or redesign a business process from scratch!

Home Mortgage Loans in the U.S, are a great example of how a business itself has evolved over a period of time and how the design and redesign process may need to be thought of on the fly. Mortgage loans used to a local affair with local banks making and owning loans for a long time. Then national banks started buying them from the local banks and servicing them. There are now online ways of applying for loans and increased automation at the backend have also speeded up and simplified many of the subprocesses in mortgage loan processing.

Today, Offshore outsourcing and use of the Service Providers's systems, people and processes adds one more wrinkle to this whole thing that were not there even five years ago!

So today, if you were to Design or Redesign a 20 year or even a five year old Mortgage Loan Process, it may be better for you to start with a clean sheet approach! Failure to do this will only mean that your processes will be competing with a new company that was put together say five years ago and may be more efficient and effective than you are!

Legacy and Age may not make business processes more efficacious! You should be lucky if they don't set you back as compared to your competitors!

Age is something that doesn't matter, unless you are a cheese. - Billie Burke

Information Availability is half the battle in Business Process Improvement!

First, it is the availability of information itself, in a central, easily accessible way, that can speed up Business Processes by an order of maginitude!

Measurement and reporting of Performance Measures or Key Performance Indicators (KPIs) themselves help Business Process Improvement. In many cases, these performance measure information is not readily available for actionable improvement efforts.

Service Oriented Architectures (SOA) and the extensive use of the Internet to stitch together, many different systems within the same company, as well as systems of suppliers, and service providers, have bridged the Information Availability Gap to a large extent. If organizations have not done this as yet, it is well worth looking into.

Lean Six Sigma and other Process Improvement practitioners often overlook the availability of information itself to speed up, eliminate, do in parallel, many of the steps in a business process. Instead of a sequential approach to two steps in a process, may be one person can do both of them in one single step, if information needed to do it is available easily. In some cases, approvals for some action can be taken immediately and the end user served by default. If subsequent analysis of the information reveals adverse information, the decisions can be undone. In some countries, they assume that Applicants for a Passport do not have adverse information in their background checks. Their applications are approved by default. If anything adverse comes up in a follow up analysis, the passport is revoked! This way 99% of the citizens who have a clean security record are not delayed by Police or Security checks for handling the other 1% properly!

Information Availability, especially when it comes to Performance Measures or KPIs, is indeed a problem in many business processes. Information systems such as ERP systems evolved, and developed to automate functional areas like Finace, Marketing, Sales, Manufaturing, Warehousing and Logistics. They were not designed with end-to-end business processes like Order-To-Cash processes in mind. Consequently, many of them don’t even capture timestamps with great detail if you want to analyze Turn-Around Time (TAT) metrics! Databases just record at the most, the date and time when a table was modfied, and not any more details on the action was just performed. In practical terms, it becomes somewhat impossible to get information about TAT metrics in business processes! Information Availability about Performance Measures is not to be taken lightly. Efforts to improve this aids Process Improvement.

Information Availability is not very high on Process Excellence folks’ aganda. That may precisely be the first thing to explore if you want to get a lot of mileage out of your own improvement efforts!

Information about the package is as important as the package itself. - Fred Smith, CEO, Fedex

The funny thing about Process Improvement, whether Six Sigma or Lean, is that not all Process Improvement efforts are equal to others.

Some are "More Equal" than others!

Efforts needed for different Process Improvement ideas may not be linearly proportional to their payoffs. Before jumping into Kaizen activities, it may be worthwhile to prioritize efforts with respect to effort needed vs payoffs.

Sometimes a simple, almost "effortless" improvement effort may lead to a disproportionate payoff while a very expensive improvement may result in a not so impressive payoff.

In processes, especially when it involves the public, delays in service cause more dissatisfaction than the actual services themselves. Everyone hates waiting. In as much as waiting can be eliminated in business processes, customer satisfaction metric registers increases.

Analysis and eliminating delays in business processes, invariably leads to better service and disproportionate payoffs. Funny thing is that some of these payoffs show up as better word-of-mouth recommendations and additional business; something not immediately recognizable and acknowledgeable.

However beautiful the strategy, you should occasionally look at the results - Winston Churchill

We seldom think of Unused Capacity as a Wasted Resource! In fact, it can be a wasted resource that can be fatal to the long term survival of your company and even your industry!

The Wallstreet Journal ran this story last Saturday - More Car Plants at Risk. It talks about Overcapacity in Automobile Manufacturing for Light Vehicles. We all know the trouble the car makers are in because they ignored the small car segment in favor or gas guzzlers and the market for them suddenly collapsed in 2008.

They used the following graphic from IHS Global Insight in the above article showing the difference between current and Projected Capacity and Projected Utlization!

What is remarkable is the very strict management of Capacity and Production in the past and the future of Toyota Vs. the Big 3 American Automakers! Toyota is also making losses currently but they might recover sooner than the other ones, just looking at these projections.

If you think about it, Over Capacity has a lot of costs associated with it - Idling Plants, Idling Huge Investments in these Plants for which some of these companies may be paying interest, Idling workers that are paid not to produce, Idling workers that are maintaining these plants even when they are on Ice with no actual workers around (Security, Preventive Maintenance people), etc.

Over Capacity may prove to be a huge huge waste and could be sucking a lot of the profits of the company even when some of your plants at producing at full capacity and making enormous profits for you!

Something to pay attention to, not just in Manufacturing but also in Services! Keeping the Capacity very close to Production in services, can be done easily with Multi-Skilling and good workforce optimization! There are lots of algorithms and software based on those, to account for seasonality of demand by hour of the day (Evenings and Nighttime for cusomer service on the phone, for example) and , day of the week (Mid week is peak for many business services), month of the year (Summer Travel Season or Thanksgiving for AAA services, for example) or season of the year (like Christmas!).

Training people to perform multiple tasks at work could go a long way in balancing demand and supply for business processes and services, smoothing out the overcapacity problem at any time.

Over Capacity could be one of the biggest wastes whether in manufacturing or in services or in business processes. Keeping capacity very close to demand adaptively with multi-skilling and good workforce optimization.

Production is not the application of tools to materials, but logic to work - Peter F.Drucker

Continuous Process Improvement, Lean Improvement or Six Sigma efforts can only be as successful or as reliable as the quality of data they use!

Data Quality is a pernicious, persistent and widespread problem in every organization. On the surface, reports look neat, wrapped up, and reliable but quite often the data they rely upon can be of differing quality levels. Even if backend enterprise information systems are all reliable, established and running for sometime, a lot of the Information people use may come from Data that may be from manually generated Excel-Spreadsheet-based Skunkworks Reporting Systems!

There are some simple ways to apply the same techniques you use for Process Improvement that you can use for ensuring Data Quality improvement.

The first of these is to apply the Six Sigma techniques that you use for Process Improvement to improve the quality of data. The first task may be to apply Paretos Law (80/20 rule) to narrow down the key pieces of data that are most important to the process improvement task at hand. For example, in a Business Process, Productivity may be the Key Performance Indicator (KPI) that is most important rather than another KPI like Absenteeism or Employee Turnover. Focusing on the Productivity KPI alone and the Data that goes into its calculation may be the way to go.

Not all data are equal. Some data may be more equal than others for your process improvement purposes! Concentrating on only those may be the most pragmatic way to go!

Tracking errors over a period of time in the Data of interest and reducing them to a minimum and more importantly reducing the variation in data quality from period to period may be important. WIld variations in the data quality make the data that much more unreliable.

Once the problematic areas are identified, it makes sense to do Root Cause Analysis on the sources and methods of creation of the data. This could be related to people or technology/software related issues. Figuring out where the root cause of the problem lies goes a long way in fixing the diaease rather than symptoms!

Monitoring Data Quality is important in making sure that your own observations before and after process improvement have validity and reliability, and you are not deluding yourself with faulty data in the first place!

Two men were examining the output of the new computer in their department. After an hour or so of analyzing the data, one of them remarked: "Do you realize it would take 400 men at least 250 years to make a mistake this big ?” - Anonymous