business process re-engineering and systems design - implementation

A practical guide to business process mapping,

systems design & implementation with staff

training

Using Six Sigma’s DMADV methodology

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Knowledge baseSix Sigma: seeks to improve the quality of goods and services by identifying and removing defects (errors) caused by variation of working. Six sigma simply means 3.4 defects per million opportunities (DPMO)

DMADV is a six sigma methodology to ensure that new business processes and systems are aligned with one another and the requirements of the end customer.

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Knowledge base

DMAIC is a six sigma methodology to improve the quality of products and services by reducing defects through business process re-engineering

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Knowledge base

You can use DMADV for:

New systems software New systems hardware New business processes New products to market New services to market

You use DMAIC methodologies for Improving existing processes

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M A D VProcess, policy, systems & training

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M A I CProcess, policy, systems & training

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D

Define

Measure

Analyse

Improve

Control

Design

Verify

DMAIC to improve and control existing business processes

DMADV to create new business processes / systems

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Let us run through a practical guide to implementing a new purchase

order system that links into accounts payable and banking


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Produce an A2/3 project charter to describe what the project is about and what it is to deliver


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Design(Workshop event)

Agree what the objectives

Identify the people to be involved

Agree how the deliverables will be measured and signed off

Agree Critical To Quality Factors

Build a high level process map


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Process Improvement

D M A I CStakeholder Identification!

People directly involved in the process Business

Champions (2-5)

IT

Procurement

Finance

Project Managers

HR

Training Dept

Legal department

Sales & Marketing

Related process areas

Risk & ComplianceQuality AssuranceWhat external

stakeholders are there?

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Process Improvement

D M A I CStakeholder Identification!

People directly involved in the process Business

Champions (2-5)

IT

Procurement

Finance

Project Managers

HR

Training Dept

Legal department

Sales & Marketing

Related process areas

Risk & ComplianceQuality Assurance

For our example:

OperationsFinanceProcurementITPolicies and control

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A project charter should consist of: Vision, why are we doing this? Objectives for the project KPI’s of current business (if available) Critical To Quality requirementsIssue logs to resolveBusiness case to weigh up benefits and costs Version / change control to monitor changes to the programme’s direction

Please note that you can obtain a free template from www.optimise-gb.com


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Vision: To minimise the number of handovers between people and department for purchase orders, invoices and payments

CTQ: Errors to be minimised between purchase order and suppliers being paid


D

For our example:

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Objectives: To automate payments from purchase order receipts, reduce FTE’s by 75%, reduce paper work that goes missing by 100%

Current issues: •Paper work going missing•Invoices not authorised•Suppliers paid too early or too late•Amounts paid is different from invoice value


D

For our example:

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Analyse (Workshop event)

Draw out the process

Identify the flows of information

Understand the trigger points and policies / Service Level Agreements (SLA’s)

Review and add to the issues log


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Shout out as many ideas as possible

Do not discuss ideas at this stage

Questions should only be asked for clarification purposes

Everyone should suggest an idea

No judgements or criticisms should be made

Do not talk over others

Generating solutions: Good practiceM A D V

Process, policy, systems & training

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Identify the solutions

Solution 1

Use post it notes and put the solutions on a blank wall

Solution 2 Solution 3 Solution 4 Solution 5 Solution 6

Solution 7 Solution 8 Solution 9 Solution 10

Solution 11

Solution 12

Solution 13

Solution 14

Solution 15

Solution 16

Solution 17

Solution 18


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Theme 3

Solution 12Solution

18

Theme 2Theme 1

...Group the solutions to identify duplications

Solution 1

Group the post it notes in an affinity diagram to identify common themes

Solution 2

Solution 3

Solution 4

Solution 5

Solution 7Solution 8

Solution 9

Solution 10

Solution 11

Solution 13

Solution 14Solution

15

Solution 16

Solution 17


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Evaluate solution

Easy to Implement

Big Impact

Hard to implement

Small Impact

Solution 1 Solution 3

Solution 6 Solution 7 Solution 8 Solution 9

Solution 2

Implement Now Possible

KillImplement Later


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Solution 1

Who?

What? When?

Where?

How?

Why?

Formularise the top 3 solutions


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Process map the activities

Operations

Supplier

Finance

1 - Raise purchase order

(PO)

2 - Sends good / Invoice

4 – Enter invoice on

system

5 – Match PO to invoice

Who, which department The what

3 – Receipts goods on system

6 – Schedule BACS payments


D

Automated system

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Policies and Service Level Agreements


D

Management approval limits to approve invoices (Senior managers to sign of invoice above £25K)

Invoices to be paid within payments terms, specified in supplier contracts

Suppliers should only see their own PO’s when loading invoices

For our example:

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Design(Workshop event)

Review the process maps Identify efficiencies through systems Develop flows of information Identify data tables Agree trigger of events within process


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Review the process map for possible issues and wastes

Waste category Office examples1. Overproducing Printing / working on paperwork before it is needed2. Inventory Filed in boxes, office supplies, batch processing3. Waiting System downtime, managers approval, information from

others4. Extra processing Re-entering data, extra copies, excessive reports, budget

process, scanning5. Correction Data entry, design, invoice errors6. Excess motion Walking to and from printers, other offices, filing7. Transportation Excessive email attachments, multiple hand offs,

approvals, postal services, internal post8. Under utilised people Limited employee authority, excessive management

control


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Remove transportation of paperwork, which leads to lost invoices by inputting data from the invoice and PO onto the system

Prevent invoices being sent for approval by applying a notification on the desktop

CTQ’s and issues

For our example:


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CTQ’s and issues

Stop the use of email notifications blocking up the system by giving access to the system to the end users

Request the supplier to scan the invoice onto the system by giving them access to their PO’s

Payments made by the system upon PO approval to prevent transposition errors or omissions

For our example:


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Design data tablesConsiderations

What information is required, types?

What information should be optional or mandatory?

How is information protected / validated?

How will table of information be linked?

What will users see and how will they access data / information?

What are the reporting requirements?


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Operations

Person ID*

Person’s Name(Auto by login)

Cost Centre(Auto by login)

Contact info

* Unique reference

All tables will need to be linked on a one to many relationship

Supplier details

Supplier code*

Supplier Name

Contact Details

Bank details

Discounts %

Payment terms

Goods info

Product code*

Product Name

Product Description

Product price

Order info

Order ID / PO*

Products details

No. Units

Product price

Value of order

Date of order

Date goods received

Date Paid

Design data tables(Identify all information requirements)


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Design data tables(Identify all information requirements)


D

Data Field Mandatory / Optional / Auto populated

Validation / Parameters

Calculations

Order No. Auto populated Incremental number

Product details

Mandatory Drop down of product details

No. Units Mandatory >0

Product price Auto populated Based on product code

Value of order Auto populated Unit price X No. Units

Order info

Order ID / PO*

Products details

No. Units

Product price

Value of order

Date of order

Date goods received

Date Paid

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Design the Graphic User Interface (GUI)

Operations

Person ID*

Person’s Name(Auto by login)

Cost Centre(Auto by login)

Approval limit

Contact info

From table view To user interface view (Specifying drop down list boxes, fields to auto populate, validation checks, access rights etc)


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Use mistake / error proofing to prevent future problems

Use colour and clear

help guides for users

Use system interfaces to

prevent manual working

Use drop down lists instead of free text

fields

Use colourful pictures to show the

expected end result


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System workflow Person in operations places an order Message on managers desktop to approve order System automatically emails order request to supplier Person in operations receives good and receipts item on

system (Journal posted into Finance) Supplier loads invoice details through a web app scanning the

invoice System is triggered to match units receipted against order and

if correct transacts a payment to the supplier and posts invoice to general ledger (Finance)

Please note that any data / information that falls outside policy / CTQ’s should automatically be sent to managers


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Verify Create a proto type of the system Create Standard Operating Procedures (SOP’s) of how to use system Pilot test the system with people that will ultimately use the system Sign off solution as satisfactory


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Test proto types

Choose users that are not experts with systems

Provide them with dummy activities to test the system

Ensure that each functionality is tested

Identify issues / bugs and fix at the end of each day and re-test the system from scratch


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Create user guides:

Show each process step with a screen shot of the event

Use simple language

Ensure policies are highlighted

Inform the user of the dos and donts

Test the manuals through UAT


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Training manuals: Each process maps should be accompanied by the following documents

Process map

How to guide

Policy info

Specimen

Process map of who does what

Procedure of how to carry out activity clearly numbered with screen shots

What is expected, policies behind work, rules and regulations that apply

Checklist

Examples of what the finished output should look like: example being forms

Check list for the activities to confirm completion and sign as authorisation


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Staff training:

Ensure that every user involved in the business process has been given training.

Use tests to ensure understanding and ensure employees sign to acknowledge that training has been given

Do not allow access to systems or allow person to work in process if they have not been trained


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Control / Capability Charts

Use software to plot the time

taken for each activity and

automatically inform managers

if activities fall outside of the control limits


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For other solutionsContact

Simon Misiewicz through Web: www.optimise-gb.com

Email: [email protected] or

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http://www.optimise-gb.com/

mailto:[email protected]

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