Professional Documents
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Course Overview by Section
Course Overview by Section
What is
Business BPI is the tool used to identify the need for change,
analyze current processes, gain organizational
support, create new processes, and eventually
Process maintain those processes.
Improvement?
BPI is a framework centered around DMAIC, process
mapping, & leadership. Each is a critical element.
Processes that are ineffective, poorly Business process improvement isn't a
If an organization is not continuously defined, or otherwise inefficient can stand-alone activity
improving the way it performs cause a variety of issues: When organizations commit to process
processes, it will likely fall behind in improvement, they continuously and
the market. proactively identify, assess, and improve
their existing processes.
Customers may express dissatisfaction with subpar
goods or subpar services.
Team members become irritable
Work could be duplicated or never finished.
Costs may rise.
There could be resource waste.
Teams may encounter bottlenecks that cause them
to miss deadlines.
DMAIC- A
Valuable & We will use DMAIC to
organize and teach this
course. Each section will Analyze
Dynamic
fall under each of the 5
components:
Control
DMAIC- Overview
From Six Sigma, there are many things that are worth leaving out,
but DMAIC is very valuable as a framework.
To teach the BPI concepts, we will walk through a
simulation throughout the course.
Course This will help you learn and apply the most recent
lesson so the information sticks.
Simulation-
Apply What We will also add short quizzes to test your memory on
core concepts.
You Learn
The best way to learn and use this material is to take
notes and think about how to apply this information in
real-life, during or shortly after completing this course.
Case Study
1 2
Problem: Sales are Effect: Customers are
declining. The preparation unhappy and going
time to cook, prepare, and elsewhere for their
serve hotdogs to customers purchases as the line is too
is too slow and inefficient. long to wait in.
The Players:
New York Hot
Dog Stand
The Players:
Hot Dog
Vendor
The Players:
Street
Hawker
Problem- What isn’t working?
3. Identify &
Identify & Manage Stakeholders
Manage
for- Optimize
Everyday Require documentation
Avoid restrictive
for all processes early on
Operations to understand and catch
process bottlenecks.
requirements and
formatting
u Iovance story
u Top leadership had a different list of top priorities from finance organization
Sponsors- Getting
Company Leadership
Involved
u Sponsors
u Sponsors are people with power who have a direct interest in the project.
As described elsewhere, you need to carefully manage your sponsors to
gain support and avoid opposition, especially where they are also Targets.
u There are four types of sponsor:
u Initiating sponsor: who kicks off the project.
u Key sponsor: who provides ultimate authority.
u Primary sponsor: who must be centrally engaged.
u Secondary sponsor: who needs to be kept informed.
u Targets
u These are people who will intentionally be affected by the change. You
many want them to change what they do and think, or even what they
feel and believe. Deeper change, is, of course more difficult.
u Interested party
u There are often a wide range of people who might have some more
distant interest. For example, if there are going to be job losses, then
government and the media may have an interest.
Managing Stakeholders- A key leadership
function
•Stakeholders all have power, whether it is the formal power invested in a position of authority or it is social power of being able to persuade
Active and passive •Some people will actively support the change, putting their necks on the line and working long hours to help it succeed. Others will work the
other way, vociferously seeking to scupper your efforts.
•These active people are where much focus often happens. However, there is often a silent majority who are more difficult to classify.
support and resistance •These may be in gatekeeper positions, where rather than taking positive action, they can subtly support or oppose the change by allowing
things to happen or quietly blocking and hindering progress.
Fence-sitters in the •In the middle are the fence-sitters who neither support nor oppose the change.
•They are often playing a waiting game, looking out for who is going to win the game. Once they have made this decision, then they will act.
•Other fence-sitters are simply undecided. Some people decide quickly whilst others need more reflection or persuasion.
middle •Either way, one of the most important things about fence-sitters are their numbers, which can be very significant. Work hard to convert them
and you may well win the game.
The dynamics of •The question after you have identified the current positions of people is how to use and move them. Usually this means moving them on the
chart.
change
•However, this movement usually has a cost, at least in terms of your time and effort. You thus need to seek what movement you can create at
what cost and hence find the best alternatives for action.
Tips for obtaining
stakeholder buy-in
Clarify roles
• Stakeholders hold varying degrees of involvement
in process changes.
• As a result, ensure every stakeholder is clear on
their role in the business process improvement
plan.
Stakeholder
Management &
Leadership
Stakeholder management and leadership
are intricately intertwined. As effective
leaders work to understand and
proactively engage stakeholders,
managers must develop strategies for
meeting stakeholder expectations.
Leadership works to identify stakeholder
needs and ensure they are addressed,
while management builds relationships
with stakeholders to keep them informed
and foster trust in their decisions.
Stakeholders should be rewarded for adopting work behaviors that reflect their
commitment to process improvement.
Offer Rewards.
Involve the right Consider how often Identify physical Determine how long
people and tools. the process is used. bottlenecks. current practices have
•Find opportunities for •High-volume or high- •Not every opportunity for been in place.
improvement with cross- frequency systems should be improvement will be •A process that works well—
team collaboration and prioritized. Improving these physically visible during and has for many years—
third-party tools. elements of your business your busiest times. may be initially passed over
Approaching a system or has a greater impact than Bottlenecks in any part of as an opportunity for
process from different similar innovations on your process are obvious improvement. However, as
perspectives may help lesser-used systems. when you’re designing, a company matures, older
identify unique or manufacturing, and shipping systems may be ripe for
untraditional ways to at high volumes. Identify changes that better align
increase productivity or where your products or with business goals and
decrease waste. services get stuck and work today’s best practices.
to eliminate those
problematic points in the
process.
Talking to people is a
great starting point to
uncover insights
Some courses teach Why? Process mapping Your process maps By keeping process
only process mapping- without leadership should be intuitive, maps simple, you can
this isn’t valuable. and understanding clear, and help you gain stakeholder
how business process learn and support easier and
improvement works communicate a spend more time
end-to-end won’t lead process. understanding the
to much. process and finding
improvement
opportunities.
1. Fishbone Diagram
Fishbone Diagram
Importance
of Process Avoid
Avoid using faulty
assumptions.
Reviews
Get buy in for your
Get improvement effort.
Walk Through the Process.
DMAIC- D
Define: Identify, Organize, and Document the
Steps in the Process.
Process
Ask Clarifying Questions and Gather
Mapping Metrics.
Steps
Complete the Process Charts/Diagrams.
Use something to take notes
quickly with.
Do miscommunications occur?
Process
Review Is there a checklist of tasks that are followed and
completed in order each month?
Review
Questions Do people
complain that
their work is Does a backlog
of work exist?
cumbersome and
arduous?
Process Review Questions
Does it add
value?
Can it be
eliminated?
Can it be
automated?
Why is this
process being
done on a piece
of paper?
Ask Effective Questions
Thinking about a problem in the shoes of Questions are most productive when they
another person or stake holder can help are open-ended vs closed, concise vs
to reveal new questions and insights. lengthy, and simple vs complex.
Considerations 1 2 3
to Keep in Mind
While Keep Challenge Ask
Conducting •Keep it Simple. •Challenge every process
step, every piece of
•Ask “Stupid Questions.”
Process Reviews
paper, every input and
every output.
DMAIC: M-
Measure
u Use Measures to determine how
effective a process is currently
to after you make
improvements
u Build a process or methodology
to collect and monitor the
results consistently
u This helps you build credibility
What are process metrics?
u Process metrics give data trackers both quantitative and qualitative ways to
evaluate an operation.
u Measuring these statistics can help you assess and improve operational
performance across an entire company.
u Determining which metrics best fit your processes can give you the right data
to make informed decisions.
u There are three major categories of process metrics, which include:
• Static process metrics: Relate to the properties of a defined process
• Dynamic process metrics: Relate to the performance of a process
• Process evolution metrics: Relate to making changes within a process over time
16 types of process metrics
u 1. Efficiency
u Efficiency is input-output ratio. It's how fast you can do something accurately or
how to make something with the fewest resources.
u Efficiency can reveal production waste.
u Formula for this metric: Efficiency = production time / total process time
u 2. Productivity
u Productivity is how much you can do in hours. It's usually shown as a ratio of
production to resources. Productivity helps compare employees, methods, and
processes.
16 types of process metrics
u 3. Cycle time
u Cycle time is the total duration of a process. Cycle time is measured in hours,
days, or years, depending on the process. A sweater's cycle time may include
buying and receiving raw materials, creation, and shipment. These smaller
processes affect cycle time.
u 4. Turnaround time
u From order to delivery, turnaround time is measured. Customers measure
turnaround time, not producers. Cycle time can cover multiple business processes.
16 types of process metrics
u 5. Takt time
u Takt time is the time required to finish one unit before starting another. Chocolate
bars may have a 15-second takt time. They can start a new batch every 15
seconds.
u 6. Throughput
u Throughput is the rate of production. Throughput emphasizes speed over quantity,
unlike productivity.
u Metric formula:Throughput = units produced/production time per unit
u Stationery companies may want to measure greeting card production throughput.
They produce two cards per hour if they make 400 in 200 hours.
16 types of process metrics
u 7. Error rate
u Error rate, also known as failure rate or defect rate, measures production cycle
errors. This percentage shows how many units or products failed your quality
control test.
u Formula for error rate: Error rate = units produced/errors
u A silverware manufacturer could calculate the error rate to determine how many
packages were missing utensils. If 25% of 500 silverware units were missing spoons,
the error rate would be 20%.
u 8. Effectiveness
u Effectiveness compares process results to expectations. You want 100%
effectiveness, meaning your results met your expectations. Time, cost, and quality
determine effectiveness.
16 types of process metrics
u 9. Cost-effectiveness
u Cost-effectiveness measures the cost of a benefit. Cost-effectiveness measures
unit or service costs. It measures non-financial factors like health outcomes.
u 10. Capacity
u Capacity is the number of units you can produce in a given time. This metric shows
the best output if all factors were perfect, unlike productivity and throughput.
16 types of process metrics
u 13. Competitiveness
u Your competitiveness metric compares you to market competitors. Market share
shows a company's market control.
u Market share formula:Market share = (company sales revenue/market sales
revenue) x 100.
u A day planner company with $160,000 in sales and a 13% market share has
$1,250,000 in sales.
u 14. Value
u Value compares a product's price to what customers think it's worth. Location,
necessity, and competition can make any product valuable or not. A $3,000-per-
month one-bedroom apartment in a small suburb may be a bad deal, but in a big
city, it may be a good deal.
16 types of process metrics
Number Number of invoices requiring adjustment after being input in the system
Identifying Process Metrics
Approval date
Cycle Time – Invoice date to Receipt by A/P
to receipt by
number of days approval date to payment
A/P
Number of Number of
Number of
manually checks requiring
voided A/P
processed A/P a manual
checks
checks signature
Measure to Prove Results
The What
the root cause of the incurred under its
problem usage
Why
Step 3. Ask
the First Why
"Why" Why
Why
Step 4. Ask "Why?"
Four More Times
Step 6.
Implement a Educate.
Solution
Follow up.
Choosing the Right Tool for Your Project
DMAIC: I-
Improve
Implement the Solution to Improve the
Process
u In Improve, we tie everything
together
u Before implementing, do one
last check to ensure we
covered all the bases to set
ourselves up for success.
u Then, we implement and
move on to Control
afterward.
Devise the Improvement Plan
u Make it mandatory
u Be data driven
u Employees take
ownership
u Measure
improvement
Redesigning the Process
and Implementation
Fundamentals
u Answer, “What’s in
it For Me?”
u Provide Training on
Improvement Tools
and Techniques
u Update the
Procedures as you
change processes
Focus Focus on addressing a clear, shared, business frustration.
Challenge and Empower Challenge and empower your team to achieve the goals set forth.
u Role model
u Show them
u Let them
u Help them
Tips for testing the changes
u When it comes to the test phase, follow these suggestions to bring a process
change to the point where it’s ready for a full rollout.
u Take time testing
u Be sure your testing is thorough. It should include all common scenarios for the
given workflow. Also, use a large enough sample size of test cases to catch issues
with the new process. It’s not enough to test a scenario once, so be prepared to
run through the changes multiple times to ensure you’re seeing consistent results
every time.
u Compile feedback
u Collect feedback throughout the testing phase to determine where further
improvements can be made. It’s rare to create a flawless new process, so this
feedback allows adjustments to happen quickly so that the new process can be fine
tuned and ready to roll out to the broader team or to customers.
Standardize the process
Finally, we tie everything together and We will review some best practices and
implement the final step to ensure the tips to ensure your Controls avoid common
process improvement has stuck. pitfalls and are successful.
Why Do Business
Process
Improvement
Projects Fail?
u The most common reasons
that projects fail:
u Lack of support from the top
u The organizational culture
u Non-cooperative team
members
u Project team is not
representative
u Process not fully understood
Control- Set the
Process up for Success
Communicate,
Communicate Explain the possibilities the future holds.
EXAMPLE
Active Listening LISTEN TO WHAT IS SAID AND
WHAT SOMEONE MEANS TO SAY
Tips and
Advice
Lessons Learned
LEARN A NEW PROCESS IN ITS MAKE SURE THAT THE NEW UNDERSTAND WHICH PROCESSES
ENTIRETY BEFORE TRYING TO RE- PROCESS CAN REPLICATE THE ARE INTERDEPENDENT AND
WRITE IT. OLD. WHICH ARE DEPENDENT.
Lessons Learned
Do not improve a
Time/effort will be
process without
spent on a solution
management buy
that is never used.
in.
Lessons Learned
Be Talk
Always Be Learning. Being on the razor’s Talk to other experts. Share war stories.
edge can help you understand the newest Most of the learning comes through real life
tools and opportunities that you can help experiences and not textbook knowledge.
your firm exploit.
Frequent Roadblocks & FAQs
Why would I stop doing what You don’t have the authority
works for me now? to tell me what to do!
Share best practices in your field. Share the Explain your role as a business partner. With
benefits of the change and the reason for the support of management behind you,
doing so. Spend time with a user to quash hint that you do have explicit authority to
all concerns. This can be something as easy proceed. But focus on using implicit
as showing someone how to use Excel more authority and fly under the radar.
efficiently and store files on a shared
server.
Projects will only be improved if people think
that you are competent and that you are liked.
u Reward
performance
u Recognize each
team member’s
impact
u Gather lessons
learned
u Repeat when
you’re ready