Steps to successful process improvement

Everything we do involves a process, whether we are making a cup of tea or delivering a housing development. This process is often not written down and as a result no two people will carry it out the same way. When performing a simple task like making a cup of tea that is probably not a problem, but it can be a problem when building a housing development if many people carry out activities in many different ways and produce different outcomes. Quality will vary, delivery time will vary and as a result so too will the cost. The result of this lack of a standard operating procedure will be an inability to predict time, cost and the size of the snagging list.

It is reasonable to suggest that these informal processes by their very nature will be inefficient, ineffective and, most important of all, will not deliver value for money. Indeed the outcome will be customers paying, as part of the selling price, for all the non-value adding activities the supply chain has carried out.

In order to get the best out of off-site construction, you not only need to specify the right product, you also need to get your own build process right. The 10 steps that follow aim to identify the most effective process so that: it can be codified, other people can be trained to do it and the outcome will always be predictable in terms of quality, delivery and cost.

Identify the process that needs to be improved

Our businesses gather data in the form of key performance indicators and when we measure this data against the objectives and targets for those KPIs, it is easy to identify where we have problems. These parts of our business should be our first target for getting the process that delivers them right.

Identify the people who use the process and will be engaged in the improvement

We need to find out which part of our business is responsible for the process that is causing the problem and identify the members of the workforce who carry it out. We must also understand which other parts of our business or supply chain are most affected by this process. These will be people who input information or materials into it and the customers (internal and external) who will receive the output.

A very important part of this step is to communicate with everyone who will be affected by an improvement activity, both directly and indirectly, so that there are no surprises and everyone is engaged.

Map the process

The team of people selected to carry out the evaluation of the process is typically drawn from the area concerned but should also have someone from the supply end and from the customer end of the process as well as someone who knows absolutely nothing about it. They can ask the innocent, and often daft question no one else asks – and it is astonishing how often a simple solution can appear.

The team will follow the process from its start to its conclusion, identifying the activities and steps as they occur. They will also make a note of the resources required and even the skill set necessary to complete the tasks in the process. Often it is found that people doing things do not have the appropriate skills and that training will improve the output significantly.

Identify and quantify the value-adding and non-value-adding activities

Once the activities have been identified, it is necessary to establish which ones do not add value in the eyes of the client. Non-value-adding activities are ones that consume resources, time and space without adding anything to the product or service the client is prepared to pay for.

Going to the photocopier would be considered work by the person doing it, but the client would view it as duplication, time wasted walking to the machine, the cost of paper, and so on.

These non-value-adding activities will become the target of any improvement event. The intention is to create a new process that does not contain them, and will therefore improve productivity, reduce the propensity for error and cut cost.

Identify the constraints and root causes of the non-value-adding activities

During the mapping activity the team must identify all the constraints that prevent a smooth flow of information and material. Every time the object is stopped in the process no work is being done to it and no value is being added.

Having done this, the team must establish the root cause of the constraint otherwise it will happen again. If we consider our procedures manuals we will often find section 1.1 also contains a sub-section 1.1.1 which clearly states what we must do in the event of 1.1 failing (it is the sticking plaster).

If we identify the reason why 1.1 failed, we can re-write it (a new “standard operating procedure”), train everyone in it and item 1.1.1 is no longer required.

Establish an action plan to carry out process improvement

Armed with a codified, albeit ineffective process, we are now in a position to be able to establish a plan of action to improve it. The team should be drawn from those who mapped the process, with the addition of people who work in the areas where the constraints were identified. This is to ensure continuity of approach and to use the expertise available – that is, facts, not perceptions. Their first step is to define a scope and objectives statement for the continuous improvement event and communicate it to their colleagues.

Assemble a team for a continuous improvement event

The full team should include members of the supply chain and customers as the new process will only be effective if the non-value-adding activities in the interfaces are also removed.

This will require people with legitimate authority to make changes – again it is useful to have a complete outsider to provide the golden nugget.

Carry out the continuous improvement event

At this point it is necessary to ensure that all the team members have the appropriate understanding of any specific tools and techniques that are likely to be used and if not, to carry out any required training.

The process improvement activity does not necessarily involve new product development but a new product innovation may well be a result. This could be either the use of appropriate technology to ensure a more productive and sustainable process or even the opportunity to develop a new product.

However, remember that the underlying principle is one of creativity before capital. The Fisher Space Pen developed by NASA can operate in outer space and cost $2m to develop – pencils work in space as well and often have rubbers attached to them. Tippex in outer space is probably both inefficient and ineffective.

It is essential to carry out benchmark performance measurement before changing the process and to repeatedly measure it after any change such that the magnitude of improvement can be stated and new performance targets set in order to establish if the new process is robust.

Celebrate the success and disseminate the information

We have a new robust and very productive process producing zero defects at lower overall outturn cost, a very good reason to celebrate and so we should. It is time for a lunch with short presentations of what was done given by the team to anyone in the business who is interested and attended by the directors so that the rest of the organisation can see how important this approach is.

Start again

Monday morning. Identify another troublesome process and start again. Also just because you have successfully improved one process, do not think that it is now world class forever. The truly successful company revisits changed processes regularly and improves them time after time. Toyota (which has been accredited as the source of lean thinking and lean construction) has carried out over 120 continuous improvement events on the first ever process they changed, that is every four months for 40 years.

Conclusion

The output of any process can only be as good as the input. If suppliers deliver poor quality product or deliver late, it is virtually impossible to recover the situation in the clients’ eyes without inputting more resources and bumping up the cost that ultimately the client has to pay for.

Why should a customer have to pay for the inefficiency and ineffectiveness of the supply chain? If this were the case in the holiday or car industry, a flight to Spain would cost £300 not £30, while a mid-range family saloon would cost £100,000 not £10,000.

"Great people and average processes produce average results; great processes and average people produce great results" (Toyota Motor Corporation). Imagine what would be possible with great people AND great processes.