Tools for Improvement (2)

1. Tools for Improvement (2) Mahendrawathi ER, Ph.D

2. Idealizing • Main principle: free from limitations that the current process imposes • Purpose: imagine how good the ideal process could be • Even if it is obvious that the ideal process cannot be implemented in practice, it can provide insight into how it should be implemented • The difference between the ideal process and the current situation can thus be used as a starting point for formulating solutions and improvement projects

3. Idealizing • A typical group exercise • Numerous participants ensures that as many ideas as possible are captured • The group should be a mixture of: • Those performing the process  they are the ones dreaming of the ideal process • Those unfamiliar with practical limitations  can present refreshing ideas • No specific guidelines on how to use of perform idealizing • Flowchart can be used • After constructing flowchart for the ideal process  compare it with the current process • Find the gaps between the processes

4. QFD • Prominent feature of QFD is: • It envisions the relationships and connections between ends and means, as well as analysis of these • The principle can be applied for process improvement • What: the requirement set for the process • Importance: to weight the requirements based on importance • How: the means used to satisfy the different requirements • Relational matrix: relations between requirements and means are analyzed • How vs. how (roof): connections between the different means • Why: can be used to perform a simple benchmarking against other organizations’ processes • How much: illustrate the results of the analysis

5. Work Unit Analysis • Background: • The need for clear specifications to follow • Often something being produced or service being performed without having any clue to how the customer really wants it • To clear up such “silent misunderstanding” and the lack of clear specifications work units can be established and the interfaces between them analyzed • A work unit: a group that performs a set of tasks and that constitutes a unit with well-defined inputs and outputs

6. Work unit • Those who perform separate segments of a business  form a work unit • Unit will have suppliers and customers delivering and receiving input and output to and from the work unit Requirements Requirements Input Output Work Unit Supplier Customer

7. Definition of requirements • Once a work unit has been formed, together with suppliers and customers, it must define the requirements that: • The work unit poses to the input from its suppliers & performance measures to monitor whether they are satisfied • The customers pose to the output from the work unit & performance measures to monitor whether they are satisfied

8. Purpose of work unit • Discussion around requirements will bring to light the needs and demands of the different stakeholders • Analysis will lead t the establishment of clear performance measures  can be used for monitoring the quality of the input or output • Analysis will ensure that as few items with defects or weaknesses as possible will be sent on for further processing

9. Steps to conduct work unit analysis 1. Establish the work unit  if one attempted work unit cannot clearly define the input and output, it must be redefined/reduced 2. Map customers  To capture the requirements from customers, analysis should start at the customer end of the work unit. • The unit’s true customer must be identified • Important to focus on the real products supplied by the unit • If a unit has more than one customer, then in the beginning concentrate on the most important customer 3. Define the requirements set for the unit’s output • Must capture absolute demands and less articulated ones!

10. Canoe Model Customer satisfaction • Expressed: demands described by customers • Expected: so basic not even described • Work unit must be aware of both • Satisfaction level depends on how well both sets are met: • Satisfying expressed req. does not rectify shortcomings in the basic demand • Satisfying every basic req. will not lead to complete satisfaction unless expressed req. are fulfilled Delight Performance Unspoken Degree of achievement Basic Expressed Expected

11. Steps to conduct work unit analysis (cont.) 4. Map the inputs 5. Map suppliers of each input 6. Map processes performed by the work unit in order to transform input to output 7. Define performance measures for the processes 8. Continuous measurement, generation of improvement suggestions and implementation of these

12. Business Process Re-engineering • According to Hammer and Champy (1993), BPR is: Re-engineering is fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance such as cost, quality, service and speed • BPR emphasizes on the breakthrough or radical improvements • Not suitable for example if the objective is to achieve 10% improvement

13. BPR vs. role of existing business processes • Should the existing processes form the basis for the new, redesigned processes? • Should the existing processes be changed in the improvement phase or should new processes be designed to replace them? • Should the organization simply start the reengineering with a clean sheet?

14. Existing vs. Completely New Process • Existing processes: • Ignoring existing process means ignoring accumulated knowledge and experience  very risky. However, there is a danger of repeating the same mistakes • Too many detail  allowing limitations incorporated in them to impact the new process • Completely new process: • VERY FEW organization have succeeded in implementing completely new processes • No correct answer: strike a suitable balance between how things are done today and how they should be done in a perfect world

15. Types of BPR • Systematic Reengineering: current processes are understood, documented and analyzed in order to systematically create new and better processes • Similar to streamlining but not only about incremental improvements in existing process • BPR must seek to combine the best from existing processes with new ideas about how the ideal process should look (idealizing) • Clean Sheet Reengineering: current processes are scrapped and new processes created from scratch through fundamental rethinking • Starting with completely clean sheet rarely can be done in practice  we mean a more moderate

16. True application of BPR will be a structured process where two elements, idealizing and streamlining, are combined

17. Conducting BPR Strategic plans External performance requirements Four Phases • Planning • Reengineering • Transformation • Implementation Planning BPR Project Reengineering Recommendations Transformation Approved solutions Implementation Reengineered process

18. Planning Central tasks in this phase: • Select the process to be improved through BPR • Assess the possibilities for achieving improvement and establish targets • Establish a project team to perform the work in the project • Produce a project plan for the BPR project

19. Central points in project plan • Activities of the project • Who will perform these? • When they should be performed? • Which resources are needed and which are available for the project • The expected results from the project

20. Reengineering • Document the existing process • Reengineer the process • Develop recommendations for improvement

21. Systematic Reengineering • Resembles the streamlining • ESIA rules: • Elimination: eliminate all activities that do not add value • Simplification: simplify as many of those activities remaining as possible • Integration: integrate and further improve the flow of deliveries between the suppliers, the organization and the customers • Several smaller jobs can be integrated into one single job • Different individual specialists can be integrated into groups that are responsible for more jobs • Integrating organization with customers and suppliers • Automation: IT, computerization and robotic equipment • Should be applied after elimination, simplification and integration has been successfully applied • 80 percent functionality can be achieved at 20 percent of the cost

22. Main area for ESIA rule

23. Clean Sheet Reengineering • Each BPR project utilizing this approach is unique • Some basic questions that need answering: • Which basic needs do we want to fulfill and for whom? • Why do we try to fulfill these needs? Does it fit in with the overall strategy of the organization? • Where must these needs be fulfilled? At home, in a separate service area, in the company’s facilities? • When must these needs be fulfilled? At what time of the day, and by which deadlines? • How will the needs be fulfilled? What processes will be required? Who must perform these processes, and which technologies does this require? • Creativity, imagination and knowledge of the persons involved is crucial

24. Transformation • Main tasks: • Evaluating the changes required to implement the new process • Planning the need for investments, training, purchases and so on • Creating a favorable climate for change • Planning the implementation

25. Implementation • Set targets for the improvements • Carry out the implementation plan • Monitor the progress of the implementation and handle any deviations