2-11 business process kaizen

8/2/2019 2-11 Business Process Kaizen

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Business Process Kaizen


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Copyright NN, Inc. 2004 Company Confidential

Our business processes have a major influence on customer

satisfaction and product cost, yet the vast majority of process

improvement effort is generally focused in production.

Good product is not enough. Performance relative to delivery,

service, or support drives customer satisfaction.

The majority of our direct customer interface is through our

business processes (Sales, Customer Engineering, Order Entry,Invoicing, Shipping, Warranty, etc.)

Why Focus on Business Processes

WHY BUSINESS PROCESSES


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Begin by listing only those business processes necessaryto run the company. A typical organizations business

processes might include:

New product development Product design release

Production planning

Materials management

Hiring

Billing and collections After sales service

Human resources training

Customer needs analysis

IDENTIFY CRITICAL BUSINESS PROCESSES



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Macroprocess

Subprocesses

Activities

Tasks

THE PROCESS HIERARCHY



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Normally, one or more of the following symptoms will be thereason for selecting a process for improvement.

External customer problems and/or complaints

Internal customer problems and/or complaints High-cost processes Long cycle time processes There is a better-known way New technologies are available

There are three things you should consider during the selection

process:

Changeability / Risk Business Impact Customer Impact

SELECT PROCESSES FOR IMPROVEMENT



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Hiring Process

Accounts PayableEngineering Change Release

Request for Quotations

Employee Appraisal Process

New Management Training

3 5 4 60

2 4 3 245 5 4 100

5 5 3 75

3 3 3 27

4 4 3 48

Process Name

A rating of 1 indicates that the process is difficult to change or that it has little impacton the business. A rating of 5 indicates that the process is very easy to changeor that it has large impact. The ratings of the four categories for each businessprocess are multiplied, and these results are used to set the priorities.

OpportunityPriorityNumber

WEIGHTED SELECTION APPROACH



7/29Copyright NN, Inc. 2004 Company Confidential

Do you really know your customers ? Do you know what they

need and expect ? Are your customers excited about your

products and services ? If not, what will it take to excite them ?

Your customer remembers your name under two conditions:

1. When you provide extremely poor products or service.

2. When you provide surprisingly good products or service.

TODAYS CUSTOMER




Who are the customers of the business process ? How do you identify them?Anyone who receives output from the process, either directly or indirectly, is acustomer. Customers can be within or outside the organization.

A single process can have as many as four different types of customers:

1. Primary Customers: They are customers who directly receive the output fromthe process.

2. Indirect Customers: These are customers within the organization who do not directly receivethe output from the process but are affected if the output from the process is wrong or late.

3. OEM / Distributors: These are the customers outside the company who receive the endproduct or service.4. Consumers: Users of products and services. Sometimes, companies deliver

their output directly to the consumer.

Internal

External

PROCESS CUSTOMERS




To help you identify your customers, ask your team:

Who receives the output from the process ?

What do they expect from the process ?

How do they use the output ?

What impact does it have on them if it is wrong ?

How do they provide you with feedback if it is wrong ?

How far beyond the primary customer will errors in the process

output impact the effectiveness and efficiency of the operation ?

Are there other outputs that are generated during the process ?

This will lead to specific Power Lean tools such as

Failure Mode and Effects Analysis (FMEA).

PROCESS CUSTOMERS (continued)




Making Processes Effective

- Fit, Form, and Function expected by customers

Making Processes Efficient

- Cost

- Speed

Making Processes Adaptable

- Response to customer changing needs

MAJOR OBJECTIVES OF BUSINESSPROCESS IMPROVEMENT




Business Process Improvement in manufacturing, design, and

administrative service industries, takes the form of increasing the

effectiveness and efficiency of the processes that provide output

to internal and external customers, while ensuring maximum

adaptability to continuously changing customer needs.

Barriers that interrupt the flow of work must be removed, and the

processes streamlined to reduce waste and lower costs.

BUSINESS PROCESS IMPROVEMENT




The specific actions required, both value-added and non value-added, to bring

a product or service through the main flows essential to every product:

from design concept to launch

from customer inquiry to firm order

from raw materials to the hands of the customer

WHAT IS VALUE STREAM MAPPING ?

Business Process Value Stream Mapping



Even a carefully developed flowchart of the entire business processmay not be an accurate picture of the business process. Veryoften the process documented is no what is really happeningin the organization. Employees deviate from the process for a

number of reasons; for example:

They misunderstand the procedures They do not know about the procedures They find a better way of doing things The documented method is too hard to do They are not trained

They were trained to do the activity in a different way They do not have the necessary tools They do not have adequate time Someone told them to do it differentlyThey dont understand why they should follow the procedures

PROCESS WALK-THROUGH




Suggestions for Process Walk-Through Questions

What are the required inputs ? How were you trained ?What do you do ?

How do you know your output is good ?What feedback do you receive ?Who are you customers ?

What keeps you from doing error-free work?What can be done to make your job easier ? How do you let your suppliers know how well they are performing ? How is your output used ?

What would happen if you did not do the job ? Have you reviewed your job description ?What would happen if your suppliers stopped providing you with input ?What would you change if you were the manager ?

PROCESS WALK-THROUGH (continued)



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Value Added Flow Analysis (VAFA) Form

NO. Activity

Time

DefectsValue-

Added (V)

1) Task must be important to customer2) Task must physically change item3) Must be done right the first time

1) Pretend you are the item going through the process2) Walk the Path the item takes3) Record each activity (Working, Waiting, Moving)4) Determine if the activity has value5) Are there defeats being generated ?

Value Added Flow Analysis (VAFA) FormMAPPING THE PROCESS BY WALKING THE PATH

Value =

Process : ________________________________

Item : ________________________________

Days Hours Min

Total Time

Value Time



1. A manager estimates that it takes 12 minutes to write 0.2 0.2

a one-page memo and place it in the outgoing basket.

2. The managers secretary picks up outgoing mail twice 0.1 12.0

a day, at 9 a.m. and 1 p.m. Average delay time is 12 hours.

3. The secretary assists three managers, answers phones, 26.0schedules meetings, processes incoming mail, retypes

letters, and performs special assignments. All these

activities have priority over typing. Average time before

starting to type a letter is 26 hours.

4. The secretary types the memo and puts it into the managers 0.3 0.3

incoming mail.

5. Incoming mail and signature requests are delivered twice a 12.0

day, at 9 a.m. and 1 p.m.

6. The manager reads incoming mail at 5 p.m. 0.1 17.07. The secretary picks up mail at 9 a.m. 16.0

8. Retyping is a priority activity and is returned in the 1 p.m 0.2 4.0

mail delivery.

9. The manager reads and signs letters at 5 p.m. 0.1 4.0

10. The memo is picked up by the secretary at 9 a.m. 0.1 16.0

11. The memo is put in the copy file and held for the next trip 0.1 5.0

over to the copy center at 2 p.m.

Activity

ValueTime

(hours)

ThroughputTime

(hours)

Consider the cycle time of a letter-writing process:

Value Added Flow Analysis Example




12. The secretary walks to the copy center, makes copies, 0.1 0.1

and addresses envelopes.

13. The secretary takes memo to mailbox by 5 p.m. 0.2 2.5

14. Mail is picked up at 8 a.m. 15.015. The memo is held in the mailroom for afternoon mail 0.1 17.0

delivery at 3 p.m.

16. Secretary 2 picks up mail and sorts at 4 p.m. Secretary 0.1 1.0

puts memo in managers incoming mail.

17. Secretary delivers incoming mail to manager 2 at 9 a.m. 0.1 14.0

18. Manager 2 reads mail at 5 p.m. 0.1 8.0

19. Manager 2 drafts answer and puts it into the outgoing 0.3 0.3

mailbox, telling manager 1 to supply more information.

It is classified rush because it is now overdue.

TOTAL 2.2 170.4

Activity

ValueTime

(hours)

ThroughputTime

(hours)

Letter-writing process example continued:

This scenario is closer to truth than fiction. While the process throughput time is 170.4hours only 2.2 hours were spent in actual work effort. The rest was wasted time that doesnot add value. It is easy to see why we need to measure throughout time.

Value Added Flow Analysis Example (continued)




People Energy

Lack of FocusLack of StructureLack of OwnershipInadequate ControlExcessive TamperingInappropriate AssignmentUnclear Goal Alignment

People Work

Processing Waste

Non-Value added MotionWaste of Waiting

Process

Boundary ErrorsChecking WasteWork-around WasteVariability WasteLack of StandardizationUnbalanced FlowWaste of Sub-optimizationStrategic / NVA Process Waste

Information

Hand-off Waste

Translation WasteMissing DataIrrelevant Information WasteInaccuracy Waste

Types of Waste in Business Processes



People Energy Waste

Focus Waste is the loss of value that arises whenmanagement and employees at all levels are not consistentlyaligned and energized to address critical issues.

Structure Waste is the loss of value when there is no formalstructure in place to support process value streams.

Ownership Waste is the loss of value that occurs whenemployees are not inclined /permitted/allowed to experiencetheir work areas as extensions of themselves.

Types of Waste



People Energy Waste (continued)

Control Waste is energy required for ineffective or non-productive supervision or monitoring.

Tampering Waste is effort used to arbitrarily change a

process without understanding the consequences.

Assignment Waste is the effort required to work onunnecessary or inappropriate tasks.

Goal alignment Waste is the energy expended by people at

cross-purposes they do not understand.



Processing Waste is the result of inefficient work. Employeesmay be hard at work, but require a better way to do the job.

Motion Waste is the movement that does not add value, suchas walking and reaching.

Waiting Waste is people waiting for information, a meeting, asignature, a phone call, a copier, a downed system or computer,

etc..

People Work Waste

Types of Waste



Strategic Waste is value lost (effort wasted) as a result ofprocesses that do not provide value to customers andshareholders.

Sub-optimization Waste is effort wasted by processes thatcompete with one another

Unbalanced flow Waste is invested resources put into materialor information that piles up between workstations (WIP).

Standardization Waste is effort required to correctconsequences of processes that do not consistently producethe same output.

Process Waste

Types of Waste


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Variability Waste is effort required to correct for unpredictableprocess outcomes due to special or common causes.

Work-around Waste is effort invested to create and maintain

informal processes that are designed to replace officialprocesses.

Checking Waste is any effort used for inspection or verificationon process output.

Boundary Waste is effort required to correct errors created oninformation hand off between areas (new forms, re-keying data, etc.).

Process Waste (continued)

Types of Waste


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Hand-off Waste is effort required to pass data between owners.

Translation Waste is effort required to change data, formatsand reports between process steps.

Missing Information Waste is effort or defects driven by theabsence of key information.

Irrelevant information Waste is the effort caused by having todeal with unnecessary information.

Inaccurate information Waste is the effort or defects caused byhaving to deal with bad information.

Information Waste

Types of Waste


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Business Process Value Stream Map ExampleBusiness ProcessValue Stream Map

Example


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Business ProcessValue Stream Map

Example


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Process improvement typically is accomplished by oneor more of the following actions:

Bureaucracy Elimination

Duplication EliminationValue-added Assessment

Simplification

Process Cycle-Time Reduction

Error Proofing

Systems Upgrading

Standardization

Supplier Partnership

Automation and/or Mechanization

STREAMLINING THE PROCESS

Business Process Improvement Roadmap


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Identify business process improvement opportunities

Walk the process to gain thorough understanding

Create business process map

identify waste and other improvement opportunities

Set improvement objectives

Create future state vision

Develop action plans to implement

Establish clear ownership and accountability

Implement action plan

SUMMARY


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1. Identify Business OpportunitiesProcess Flow Analysis

Pareto Analysis

Prioritize Opportunities

ProcessChange-ability

Oppour-tunity

Priority

2. Define and Scope Project

Establish Process BoundariesSet Objectives

4. Perform Analysis and Identify Waste

*

**

**

**

*

*

*

X

Correlation and

Regression

Cause & Effect Diagram

5. Outline Desired Results

Rolled Throughput Yield

Agree on Goals

Define Performance

Metrics

6. Plan Countermeasures7. Refine and Implement

8. Measure Progress & Sustain Gains

Week 1M T W T F

Week 2M T W T F

Week 3M T W T F

Project Phase I

Project Phase II

Project Phase III

Project Management - Gantt Chart

Week 1M T W T F

Week 2M T W T F

Week 3M T W T F

Development

Database Debug

Beta Test Period

Refine Schedules Team Kaizen

Setup Checklist

Format hard drive

Create boot disk

Edit BIOS

Boot from CDrom

Install Windows

Set date and time

Measure ProgressError Proofing

50% Cycle Time Reduction

100% On Time

Defect Free

Goal

9. Communicate Results & Recognize Team

3. Document RealityBusiness Process Value Stream Map

EndUser

OEM

Distributor

FieldSales

Marketing

Engineering

PlantC/S

InsideSales

RGOS

OMS

Manuf.&

Assembly

ShipDirect

MfgSystems

ProductSelection&Ordering

1.Selected UserProductSelection

&Ordering

2.Other End UserProductSelection

&Ordering

3.OtherEnd User

ProductSelection&Ordering

ProductSelectionStocking POU

Customer AssistanceOrdering/Quoting

Specfication

Customer AssistanceOrdering/Quoting

Specfication

Order CollectionOrder Entry

Customer Assistance

Order CollectionOrder Entry

Customer Assistance

Specfications,BillofMaterials,Routings,Machine Software

Order ManagementCustomer Information

Sales &Shipping

Order ManagementCustomer Information

Sales &Shipping

Planning/PurchasingMPS/MRP/CMMSProduction/MaterialControl/Cost/BOM

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