Change the way you look at processes using a new perceptual set.
I like to adapt methodologies to the project at hand. Process re-engineering is no exception. You can get better results, quicker and you can spend more time working on high impact items if you do it right. Aren't you tired of hearing: "Let's do a big analysis...". Me too. What's the alternative? Read on...
When process re-engineering is needed, i really like the framing of "Voice of employee" and "Voice of customer" from lean manufacturing as well as User stories from Agile and Business architecture. By combining both and cherry picking what works, requirements are better understood, more quickly defined and more easily managed.
In this spirit of better/faster, I've been using a different perceptual set when identifying processes that are broken. This perceptual set can be used with any methodology and is meant to identify the most important processes to work on, faster.
To identify your top priorities, look at the symptoms.
Because I am obsessive, lazy, and have a programming background, I like to put everything in a system or repeatable solution. In the case of processes, I like to break down my analysis into 4 themes. These are the cost analysis, the time analysis, the quality analysis and the frustration analysis.
No need to crunch every number under the sun to prioritize, start with a qualitative assessment and move on to a quantitative assessment.
Keywords: Perceptual Set, Process Re-engineering, Cost Analysis
The right state of mind for a fruitful analysis
Sometimes we are guilty of thinking that something will be done better if we’re the one doing it. “If I was taking care of replenishment, I’d do this and that differently” or “if sales were run like operations we’d all be better off” are comments I’ve heard over the years. Not because people are mean but rather that they don’t understand the complexities of the tasks they are talking about. (Yeah, sometimes they’re just mean). It’s a little like thinking you’re probably as good as a professional athlete because they make it look so easy. They make it look easy because they have trained, repeated, practiced…
Frustration symptoms
Over the years, the frustration theme has been the most fruitful one for me to attack first. When you listen to employee frustrations, take notes... This will help you find the frustrations that are directly linked to process limitations and waste. (Later, you’ll have to figure out the difference between the symptom and the root cause.)
Fixing frustrations is where, naturally, you get the most buy-in from employees. The good ole “What’s in it for me”. This is your opportunity to establish a track record of success with employees. A track record is important because employees don’t care what you say, they care what you do. You’re not the first consultant/manager/director who has told them that everything will be better because YOU are in charge. Once you have an established successful track record, when comes the time to change the process, in ways that will affect their roles or tasks, the employees will see you as slightly more credible. Slightly.
Process drivers find themselves putting out a lot of fires
Planning
Planning is the means to affect tomorrow, today. If you don’t plan. You plan to fail. This doesn’t mean that every plan should be documented, followed, maintained, with the same rigor as your ERP implementation. Planning should only be done to a level that is appropriate for the task at hand.
Plans are worthless. Planning is essential. Dwight D. Eisenhower
Once you've gone through the planning process, you've prepared yourself for the first thing that happens during a process launch: something has changed. All the hypotheses, analysis, constraints that you are intimately aware of, through planning, will help you adapt quickly.
Who are the best planners? Mothers/Fathers with young kids. I kid you not. Have you ever been to see Santa at the mall at Christmas time. The queue to see Santa is often long and moves slowly. You can’t just leave and break your children’s heart. Instead you need to be prepared to entertain a tough crowd.. Cheerios, if the kids get hungry. A book (very 1990s) if the kids get bored. Something to drink. Something to play with. Contingency plans have been established and practiced, improved and optimized. Everybody has gone to the bathroom, been cleaned up and organized. Hats off to my wife.
Executors
Watch out for people who thrive on action that are in a planning role. It's very gratifying for them to accomplish operational tasks. They will tend to execute first and plan if any time is left over. There's never any time left over. In the extreme this can look like Munchausen by proxy.
I don’t have time to get organized; I’m constantly putting out fires.
Don’t work harder, work smarter. Martyrs don’t help the company.
Customers’ needs are not understood
In the 80’s the concept of training your customer was pretty common. Pushing them through endless phone system loops or insisting they do their business between 9 and 5, “like we do”; was practical for the distributor and the shareholder; not the customer. Today, your customer can go on Amazon or EBay and buy any product. Any product. Your customer has received no training from Amazon. (Not perceptibly anyway.) They find what they need. Easily place an order, seamlessly pay for it, conveniently track it and finally receive it; all within 2 days. Does your business offer this? You’d better.
Stop trying to train your customer. It isn’t a winning strategy anymore. Instead, we need to understand the jobs our customers are trying to do, and facilitate their interactions with us. Spending a day with a customer beats a spreadsheet any day of the week.
Every business process is in place to serve customers and should create something of value. While the customer receives the output of the process, process owners (if they even exist) rarely know the customers of their process; what those customers want from the process; what customers think of the value provided by the process; and to what extent the process meets customers’ needs.
Here are a few basic questions to ask yourself:
What does the customer expect from us as a minimum?
What service can we render to the customer that will truly add value to our relationship?
Is it about speed, cost, selection?
Discover your customers’ real needs
Suppliers’ needs are not understood
Many business processes involve suppliers. Most process owners do not know the supplier to their process, what the process needs from their supplier, what the supplier is capable of providing to the process, and to what extent the process needs are being served by their supplier.
Ask your suppliers' how you can help them help you.
Why do you still have clerks entering supplier information into your systems? Get the suppliers to do this for you. (a fast connection and permissions set)Why do you work from 9 to 5, when your suppliers work in a different time zone? Do you use your suppliers' technical services?Do you use your suppliers' marketing services?Do you use your suppliers' organisational services?
Discover your suppliers’ real needs
Processes cross many functions making expectations unclear
What’s worse than no process owner? Multiple process owners with different agendas and goals. Often the multiple owners will be tired of the incessant fighting over expectations and will begin to ignore the process.
Websites are great examples of unclear expectations.
What does the president think the clients want?
What do the salespeople think the clients want?
What does the marketing department think the clients wants?
What does the client want?
Clarify expectations for every resource that interacts with a process.
No process driver/owner
A process without an owner is like a car without a driver. If it hasn’t gone off the road yet, it’s just a matter of waiting around a bit.
Big, mission critical processes usually get more love and attention than non-mission critical processes. Makes sense. But it shouldn’t be at the expense of other processes. Every process should have an owner. Every process.
Here’s an old story that is still very pertinent. Once upon a time there were four people named Everybody, Somebody, Anybody and Nobody. There was an important job to be done and everybody was sure that somebody would do it. Anybody could have done it, but nobody did it. Somebody got angry, because it was everybody’s job. Everybody thought anybody could do it, but nobody realized that everybody wouldn’t do it. It ended up that everybody blamed somebody when nobody did what anybody could have.
Name a process driver/owner for every process.
Keywords: Employee Engagement, Efficient Planning, Ownership
Costs symptoms
Corporate assets are under or over used
Are your trucks on the road only 8 hours a day? Is your warehouse empty? or bursting at the seams? Are some employees swamped with work while others seem to be inventing work? Walk the four corners of the building to get a qualitative assessment of your asset use.
Here are a few asset problem symptoms I’ve seen:
Truck sitting idle in the yard.
Lift trucks sitting idle because of charger issues.
Underutilized capacity because racking is not adapted to product container cubage.
Truck driver punches in at 6 am but hits the road at 10 am.
Identify asset under utilization
Process has too much non-value added work
How do we know whether a process step has value in the first place?
Pretty easy rules:
If customers have asked for it, and is willing to pay for it, it has value.
If the process step aids in the achievement of something customers have asked for, and are willing to pay for, it has value.
I purposely wrote “customers have asked for” instead of “a customer has asked for”. Be careful not to create processes for the event that occurs rarely and with little impact because one customer mentioned something in passing. We must please our customers. But, it mustn’t be at the detriment of the business’ ability to stay flexible and lean.
To find criminals you typically have to follow the money. To find non-value added work, follow the piles. (from paper to pallets)
Don't say yes to everything
Process is overly complex
As a company grows and adapts to the changing challenges, and changing strategy to meet these, processes get altered to fix local issues. Over time an organic process of progressive evolution takes place. Bells and whistle get added to a process by well-intentioned employees, eventually overloading a process so much that exceptions are the rule.
Let’s look at a very simple example.
Stan produces grommets on the production line.
Eric inspects the grommets before they go to the flanging department
Kenny flanges the grommets.
After numerous ignored complaints about grommet quality from the flanging department to the grommet department, action needs to be taken. As an interim solution, until the grommet department gets their act together, the flanging department has decided to add a grommet preinspection step to their flanging process. Customer first and all… Next, the defective grommets sent back for rework to the grommet department, took so long to be sent back to flanging, it was decided, as an interim solution, to add a rework step in the preflanging department. Also, a form was created to keep track of the source of the errors and the grommets sent back for rework.The process now looks like this:
Stan produces grommets on the production line.
Eric inspects the grommets before they go to the flanging department
Kyle inspects the grommets received from the grommet department
Randy sends the defective grommets back to the grommet department and fills out the defect tracking form, sometimes. Sometimes the flanging depart will do the rework.
Kenny oversees and manages the ever growing flanging department.
Look for interim solutions that were never revisited. Their purpose may no longer exist.
As employees implement new steps to a process, to make it ever better, the risk of losing sight of the big picture is ever-present. The solution to overly complex processes is re-engineering. That is, considering the big picture, what do we need to get done?
If you can't draw down the process in a few minutes, it's probably too complex.
I.T. warning
Often, instead of taking on the arduous task of re-engineering a process, the noob will try to automate steps, to speed things up. It still ends up being lipstick on a bulldog. Now you just have a crappy process that runs faster. Ideally, we’re looking for appropriately streamlined processes that are automated as much as required, in the most cost effective way.
Here’s a quick test to tell if your process is clearly defined. Ask the process owner a couple of general questions about the workings of a process. If the answer that seems to come back the most often is: “it depends”, then the process is probably unclear. Put it on your list of future projects…
Look at hiring. If you need more people, than in the past, to do the same tasks, you probably have an organic process that needs to be reviewed.
Keywords: Asset Utilization, Non-Value Added Work, Process Complexity
Time symptoms
Some overly slow process steps are obvious. You probably already have a list of these. They are the bottlenecks that everyone tries to work around.
People work around a process to speed things up
Employees just want to get things done. If a process step stops them from achieving, their goal, whether it be a salesperson trying to hit a quota, or a clerk trying to keep his boss happy; they will find a way to get it done. If you’re the process driver, don’t take their workarounds personally. Your value as a person is not on the line. It’s great that we have caring people who can find better ways to do their jobs. But… it’s unfortunate that, with a defective process, the roadblock for them is internal.
This doesn’t mean I condone people that workaround the rules. I only condone the behavior when the process truly is not appropriate for the job at hand. When your truck drivers create their own routes to start their deliveries early, because the dispatching process takes too long; the dispatching step needs to be looked at.When trucks line up in your yard, because loading/unloading takes too long; the loading/unloading process needs to be looked at.
Make a list of workarounds to add to our future projects list.
Inspections, inspections, inspections
Eliminate the need for inspection on a mass basis by building quality into the product in the first place. W. Edwards Deming
Inspections are important. Appropriate Inspections are more important. Inspections need to be done where required, with the right sample size, by qualified people to satisfy the customer.
Sometimes we worry too much…
Upon inspection, one of our products was deemed defective by the QA department. The product, a lacquered wood banister, had microscopic dots in the finish. These dots weren’t present on the preproduction samples. OMG DEFECTS! Claims! We acted quickly to stop the sampling process and reevaluate the situation. Oddly, we had been selling the product for a while. Apparently a flag had been raised internally resulting in a more thorough inspection of the product. Digging a bit deeper we found out that we had sold bucket loads since the product launch. 0 claims. 0 customer complaints. We even got congratulated for the innovative dotted finish that the market loved.
As we worry, we add inspections, controls, procedures, people, etc. This slows everything down.
Do inspections where required, with the right sample size, by qualified people to satisfy the customer’s real needs.
Keywords: Workarounds, Inspection Efficiency, Quality Control
Quality symptoms
Process goal not understood
For a process to yield all of its potential value, its goal must be understood by all those who interact with it. The big picture must be on everybody’s radar as the process is executed, to maintain operational quality. Also, changing requirements and tiny exceptions are much easier to deal when you keep the goal in mind while maintaining a flexible stance.
For example, we asked one of our designers to manage product colors tags on our website. That is, when we received a product, she would define what colors were in the print and input them into our product database. The point of this was to create a bucket of information that could be reused, using different views, in different parts of the company. On our website the data facilitates the “search by color” feature. If you are looking for a print with some blue or some yellow; a couple of clicks and you’re done. Cute feature. Baseline. 2005. If the new products take a few days before they are entered in the color database, no big deal.
Now what if we changed the impact of the process on the company? What if we used the same data to qualify our product portfolio? Do we have enough blue products in such and such a price range? Enough taupe at a certain price point? The impact of errors or delays in the information is much greater than when the information was used simply to populate a website. Our designer stills inputs the information into the database, but now the task is in the high priority class.
Understand/Share the big picture goal
Process not defined
If your process isn’t defined, I’m pretty sure it isn’t documented either. (The same reasoning as: “if your parents didn’t have children you probably won’t either”). As employees come and go over the years, processes go through many iterations. Some good. Some not so good.
Here's a pretty typical scenario
Stewart is leaving the company. He tells us 2 weeks before he leaves. The hiring process takes a month. If the process is not defined we’re really in trouble. Let’s pretend we live in a world where we get a little warning before someone leaves. I know, I know. None of us live in a world where we get a little warning about anything. Humor me. Let’s start over.
Stewart is leaving the company. We get plenty of heads up time. As a matter of fact, Stewart is downright helpful. (If we’re going to live in a perfect world for a while, let’s go all in). Stewart shows Rupert how the process works. Stewart thinks he is a great teacher but he hasn’t taken into account that Rupert’s knowledge of the process is nonexistent. About 80% of what Stewart communicates can be understood by the layman. Rupert, has taken the job until he gets enough money together to give his “stop procrastinating” seminars. He doesn’t give care about the process, product or company. From the 80% that Stewart communicated efficiently, Rupert picked up about 80%. Brian replaces Rupert during his well-deserved vacations. Brian is taking care of Rupert’s tasks for 2 weeks. In 2 weeks Brian will be replacing a driver, then a secretary, then a warehouse employee, then…. How much do you think he cares about Rupert’s process? Anyway, Rupert will be back in 2 weeks, what’s the worst that can happen?
An undefined process is a thing you do to get something done, so that it will have been done in the fashion that is appropriate to the thing being done by you. Unclear?
Define your processes
Process not followed
Presumably each business process was put into place for a reason. Presumably.
Why would a process no longer be followed?
Because the process purpose has changed
Because the process is ineffective.
Because the process is not seen as important.
Because of lack of training.
And on and on and on…
Follow OR redesign your processes.
Redundant data is everywhere
Enterprise resource planner (ERP) consultants joke that ERP stands for Excel Replacement Program. ERP consultants are not known for their wit. But, they are right. Look around. I can guarantee that somewhere close, someone is maintaining a useless, redundant spreadsheet. They aren’t doing it maliciously. They just need access to info when they need to have access to info.
In the good old days, we would see someone type in information in one departments system, only to be printed out and retyped into another system. Did anyone think spreadsheets would fix this?
Here are a few inconsequential examples of redundant data that are probably familiar to most of us:
Contacts
You have contacts in your corporate Gmail account.
You have contacts in your personal Gmail account.
You have contacts in your personal Hotmail account. Last login 2007
You have contacts on your corporate phone.
You have contacts on your personal phone.
You’ve still have contacts on your Blackberry (in the drawer).
You have contacts in your ERP.
You have contacts in your CRM.
You have business cards
Excel reports
A backorder list is maintained by the purchasing department.
A different backorder list is maintained for the sales team.
A different backorder list is maintained by the sourcing department.
A different backorder list is maintained at each location.
Get rid of redundancies everywhere.
Redundant processes are common
Rodrigo knows that there is a process in place to track broken stock and inventory adjustments. He makes his employees track these in the ERP as well as on an excel spread sheet. By making the employees enter the numbers a second time, he tells me that the employees will be more aware of the value of the material. Our employees are not children. If they are, they need to be replaced. A monthly conversation about broken stock and inventory adjustments takes 15 minutes and creates no frustrations.
Get rid of redundancies everywhere
Processes are not measured or controlled
You can’t change what you don’t acknowledge. Dr Phil
Keywords: Process Understanding, Process Definition, Redundant Data
Years ago, one of our warehouses was having a hard time supplying the demand in its territory. Someone decided that we should start shipping from our DC (distribution center) to customers in the problem territory. It was supposed to be a quick fix while the warehouse got its act together.
Our freight costs went up as expected. But… no one had factored in the shipping cost increase at the DC. Why did the shipping costs go up at the DC? The DC was designed to pump out a large volume of product. It now had to be partially adapted to the new requirements. Staging areas were created, people were hired and trained, lifts were rented, etc.
Here’s how it went down:
Jan 15th.
The decision is taken to move ahead with the temporary freight program.
Our most capable employees are chosen to be part of the execution team to make sure everything goes off smoothly.
The role of these employees is temporarily filled by” temps”.
The DC takes 2 weeks to setup and train its staff.
The new process will have dedicated, experienced employees, whereas the bread and butter processes will receive a bunch of untrained “temps”. What could possibly go wrong?
Feb 1st.
A lot of time and money has already been invested in the project, but no project driver has been named. Quality issues in the DC aren’t apparent, yet. The “temps” have only just started shipping the wrong skus (Stocking units), quantities, dye lots, serial numbers, … to the warehouses. It’s just a question of time before we feel the hit. 3rd party freight companies start delivering to customers in the newly defined territory.
Feb 15th
The January financials come out. The team looks at the freight program numbers and they seem high but acceptable as an interim solution. After all, it’s only been 2 weeks; there will surely be some adjustments. The DC setup costs went unnoticed because there was a lot invested into an unrelated warehouse move and the financials look good overall.
March 15th
The February financials come out. The 3rd party freight invoices are in. The cost is high, but still considered within expected limits. Warehouse grumblings about the increase in short ships and over ships is getting louder. Heroic recovery seems to have become the modus operandi. Everybody is doing back flips to keep the impact on customers to a minimum. A well-oiled machine (the DC) has had a wrench thrown into it.
April 15th
Crisis. Customers are complaining in all territories. The DC has essentially pushed its quality issues out to the warehouses compounding the number of customers affected by the one warehouse not being able to meet the demand.
Measure and Control your processes
Processes are built around exceptions on low-recurring events
A process is like a giant pipe. It’s meant to have enormous amounts of whatever you’re processing go through it. We want the main process to do one thing, and do it well. Exceptions to a process are meant to be dealt with in a related process, but not by the main process. We must not slow it down to deal with exceptions.
Call center faxes
At our customer service center, we would receive orders by fax from customers. These were promptly entered into the ERP, which would automatically send an order confirmation by email to the customer. Pretty straight forward. Pretty standard.
Customers started to complain about errors in their faxed orders. Apparently the quality of our service was better by phone. This was pretty much expected… but we mustn’t forget that faxed orders are much more cost effective than placing an order via an agent. As a company, we want to facilitate the more cost effective solution without negatively affecting customer service.
Here’s where we went wrong. A process was defined to make sure that the call center could back itself up when customer complained. If an error occurred, the call center could prove that the fax that was received from the client was erroneous.
Process steps:
Faxes were printed upon arrival of the first agents to the call center
Faxes were distributed to agents to be entered into the ERP
ERP info was written on the faxes
Faxes were collected and compiled
Faxes were scanned and stored for easy access
(I need to repeat this for effect. The printed faxes were scanned. Manually. By people.)
To properly assess the need for this process in the first place; a couple of questions need to be asked:
How often is there an error with a faxed order?
Does the impact justify all this scanning and filing? We’ll look at this later when we go through the probability/impact matrix.
We eventually automated every step by using Gmail and Google sheets, etc… More about this in leveraging Technologies.
A process is a pipe.
Process was not done right and the product needs to be reworked
Sometimes things aren’t done right the first time. Sometimes things aren’t done right the second time. How patient are you? How patient are your customers? How good is your competition?
You should be breaking into a cold sweat. Your competition is competent, intelligent, driven and persistent. Underestimating the competition has been the death knell for many many companies.
Honda sold 20000 cars in the US between 1970 and 1972. The big three car makers laughed. Fast forward to December 19, 2008. President Bush approved a bailout plan and gave General Motors and Chrysler $13.4 billion in financing from TARP funds, as well as $4 billion to be "withdrawn later". That month Honda sold 86000 units. Do you remember how the first Hyundai’s were mocked? Remember the first Kia? Do you remember the last Saturn?
Reduce waste and rework
As we add people to a problem, it gets worse
Adding more people to a broken process either slows down the process more or brings the costs through the roof. Really.
Here are a few reasons why: When you bring new people on board, they must be brought up to speed. There are 2 options to get this done. Option 1. New employee needs to be trained, supervised, coached, managed…. This is very time consuming, if done right. Option 2. Don’t do it right. Throw partially trained employees at the problem.
Adding a new resource can have the perverse effect of having everybody in the team roll back their effort a bit. Why? Human nature. If people feel that the pressure is off, they release their foot from the pedal.
Communications channels can get complex very quickly. The more people you have in your team, the more complicated it is to get everybody to communicate efficiently. The number of connections between employees follows the following formula. N(N-1)/2. If you have 6 people in your team, there are 6(6-1)/2 = 15 connection points. Now imagine that you add 1 person. Now there are 7(7-1)/2 = 21 connection points. We’ll look at a few techniques available to us later on.
Don’t throw people at a problem.
Not linked to strategy
The executive team’s job is to trickle down vision and alignment to their teams and employees.
Why is this important?
First, because our processes will never cover everything. Our employees need to have a clear understanding of our vision, to deal with the exceptions that pop up daily. Second, as our employees continuously improve our systems and processes, we must be sure that everyone is doing the right things; to reach the right goals.
Sometimes we can get lucky and have smooth flow of information about vision and strategy through the company in an informal way. I say lucky, because unless your company has only 2 or 3 employees, you will, sooner or later, hit the alignment wall. As your company grows, formalized communications methods (meetings, newsletters, town halls) are required. The frequency of these depends on the needs of the company. Keep in mind, though, that the company’s alignment; from strategic to tactical to operational, is directly correlated to the time spent communicating about our vision.
Keywords: Exceptions in Process, Rework, Adding People
To have an immediate impact, no matter where your alignment position is currently, choose 3 alignment messages, and repeat them to everybody you meet. Persistently.
Over-communicate your strategy
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