process optimization sharing_tien h. nguyen

Process Optimization Sharing

Nguyen Hoanh TienMarch 16th, 2017

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Agenda

• What is Process Optimization• Process can’t be Optimized Alone• What Breaks Processes and Strategies to

Optimize Processes• Process KPIs and Measurement System• Notes for Process Changes• Recap

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What is a Process

• Series of steps done one after another• A mechanism to reduce complexity to allow

for more efficient implementation• Mechanisms to allow autonomy (less control),

learning and adaptation

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What is Process Optimization?

• Continuously changing processes to achieve high effectiveness and efficiency within the given constraints– Effectiveness: achieve the business goals– Efficiency: low “costs”

• Example: bike park

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Our Reality - Good UX means bothEffectiveness and Efficiency

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Example – Coffee chain

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Process Optimization – Platform for Improvement

• Continuously improving "user experience” and business objectives within constraints

• Bottom line:– Who are "users“, what does good UX mean to

them?– What are business objectives?– What are the constraints?– What are key to improvement?

• Example: Bike park

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Agenda



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Process is a Part of Operations

• Operations includes: – Structure– Process– People– Information

• Link between Strategy and Operations, then Process:– Define Critical Operational KPI(s) that help business to

compete– Link process with the above KPIs

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Relationship with other Operations Components

• Structure should divide complexity along its key dimensions to allow for: – Efficiency– Autonomy– Learning, and– Adaptation

• Process, people (skill/knowledge, authority and motivation) and information are intertwined

• Bottom line: cannot optimize Process alone

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Avoid Process Sub-Optimization

• Optimization of one process may harm the whole

• Improve end-to-end mega processes, e.g.:– Order to Cash– Request to Resolve– Etc.

• Link process with mega process KPIs

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Agenda



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What Breaks Processes

• Non-compliance• Process doesn’t take into account exceptions, too

many exceptions• Loops• Poor-quality decision• Too late to detect a problem to repair/remedy• Miscommunication among roles and groups• Bottlenecks• Wrong manual inputs

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How to Recognize

• Non-compliance• Loops• Bottlenecks• Too late to detect a problem to repair/remedy

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Process Map – Common Components

• Roles in Swim lanes• Key objects (the nouns) to avoid going too

much into details or too high level• Each action step:

– Role– VERB (action) + NOUN (object)– Location, volume, information needed, etc.

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Important Parts of Process Map –Decision Points

• Considerations– What decision is made?– Who makes the decision?– Which authorization the decision maker needs?– What needs to be considered to make the

decision?– Does decision maker have enough information to

make the right decision?– Does decision make have the motivation to make

the right decision?

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Important Parts of Process Map –Points of no Return

• Points of no Return: points after which, it’s very costly or impossible to reverse

• Considerations– What decision(s) to be made before the

“release”?– Is there enough time for decision?– Is there enough time to fix issues before

“release”?

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Important Parts of Process Map –Communication Points

• Considerations– What is the content of the message?– Is the message understandable to the receiver?– Is the content come in time for the next steps?– Is the frequency of communication suitable?

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Identify Potential Bottlenecks

• Potential bottlenecks happen where:– Low capacity than other

parts of the process– Special requirement for

tools, skills, authorization

• Look at high volume of un-finished work before the step/decision

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Strategies to Deal with Bottleneck• Maximize utilization of

bottlenecked resources– Continuous utilization– Check quality before the step– Move tasks that are not

required to elsewhere– Move the whole chain

according to bottleneck• Increase capacity of

bottlenecked resources– Increase capacity short-term by

outsourcing or temporary resources

– Increase long-term capacity to meet the throughput

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Optimize Process Effectiveness

• Effectiveness improvement often comes from external (customers, suppliers/ partners, etc.)

• Optimize for customers:– If the goals are clear:

Measure and Optimize– If the goals are not clear:

Design Thinking• Optimize for supply chain:

Supply Chain Management

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Design Thinking Process

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Agenda



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KPI Tree

• Process KPIs include:– Result KPIs (measured

impacts on or experience of the customer/business): effectiveness measurement

– Efficiency KPIs: how many people, how much cost, etc.

– Diagnosis KPIs• Result, Efficiency and Diagnosis KPIs form a KPI tree• Process KPIs should be linked to related

– Mega process KPIs– Critical operational KPIs

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Criteria for Good KPIs

• KPIs should be simple to understand• Timeframe should be frequent enough for

corrective actions• KPIs should be measured from customer’s

point of view – easy to relate• Examples:

– Uptime % -> downtime minutes per week– Operating cost -> Zero pending orders &

cost/order

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Measurement-driven Improvement

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1. Define standards to measure or collect old data to establish goals

2. Measure to create a causation model for performance

3. Identify important factors to improve

4. Improve and measure

Case Study - CSAT

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Informational vs. Motivational Measurements

Informational Measurements Motivational MeasurementsTo improve work quality and manageability

To reward or punish

Focus on:• Self-management and self-

improvement• Trust• Common understanding of

work

Focus on:• Comparing with target• Direct attention• Feedback to change

Measure more often andconsist of more measurements

Measure less and focus on only a few important results

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Agenda



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Before Process Change - People Checklist

Does the new process create:AutonomyLearningMotivation to do right thingMotivation to change

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Tips for Change

• Craft change message and story – touch the emotion, not just logic

• Remove roadblocks, especially unsuitable motivation system

• Say goodbye to the past• Change in waves: start small, then big change,

then fine tunes• Increase the target and/or initiate new

changes

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Agenda



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• Continuously improving UX and business objectiveswithin constraints – Ask WHY

• Before process optimization: Choose WHAT– Choose what to improve together with process: structure,

information, people– Chose the process to optimize in the context of end-to-end

mega process• Process map should highlight areas of focus in

optimization (decision points, points of no return, communications, bottlenecks)

• Strategies for bottleneck: maximize utilization and increase capacity of bottleneck

Recap (1/2)

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Recap (2/2)

• Improvement of effectiveness often by focusing on external factors:– Measure and optimize– Design Thinking– Supply Chain Management

• KPI tree with cause-and-effect relationship is critical in optimization

• Focus on informational measurements and link them to motivational measurements

• Make sure process changes support people development and happiness

• Care about emotion and always push for the higher goals

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THANK YOU

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process optimization sharing_tien h. nguyen

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