Most of your business processes evolve over time in an ad-hoc fashion. They have too many
workarounds and rework loops. They have too many unnecessary delays between steps. Delays forces us to look at the time component embedded in our processes.
Delays Impact Your Ability to Deliver Quicker
Today’s customer expects fast delivery of the product or service they order. This fast mindset is becoming even more prevalent with the advent of technology and the internet and forces suppliers to become a time-based organization. Delays between process steps eat up a lot of time in most organizations. In my experience analyzing and mapping business processes, almost 80% of the non-value-added time is associated with delays between hand-offs.
As companies grow the system like nature of the value-adding process often gets hidden, and so does the customer. Distances increase as functions, such as product engineering, customer credit authorization, shipping, etc. focus on their own needs. Support activities multiply, specialists are hired, reports replace face-to-face interactions. Before long the clear visibility of the product or service and the essential elements of the delivery process are lost. Instead of smoothly operating processes the company experiences a tangle of conflicting delays that frustrate their customers.
Time’s Relationship to Cost
Many managers focus on costs, but time is a more useful management tool than cost. Cost is by and large a lagging indicator, a symptom. Cost is tracked through a set of accounts corresponding to what money is spent on – payroll, supplies, holding inventory, etc. Managing time, on the other hand, opens your organization for analyzing your processes. Time’s major advantage as a management tool is that it forces analysis down to a physical level. This physical way of looking at your business provides more insight and power in looking for ways to improve the performance of your processes, and ultimately the organization.
The focus on reducing time delays also lead to lower overhead costs, as the costs of dealing with process breakdowns and delays begin to disappear in the organization. So, when you go after delays between process steps, you tend to get both time and cost out.
Lean-Agile Business Process Improvement
The question most managers ask themselves is there a faster way than the traditional Lean Six Sigma methods to improve my business processes? Yes, there is what I like to call, Lean-Agile process improvement. Lean-Agile business process improvement is designed to improve service and administrative/support processes quickly – in hours and days not months. Traditional Lean Six Sigma takes too long, costs too much and often fail to deliver the desired outcomes. It doesn’t take 160 hours of training over four months to deliver measurable process improvement. You only need to know a handful of tools in the proper order to get significant results.
80% of U.S. companies are service businesses and Lean Agile business process improvement is the solution to the most common problems experienced by service companies. Manufacturing companies usually require another subset of technical Lean Six Sigma tools, but Lean Agile process improvement can be used to improve the performance of their office/support processes.
Some of the benefits of Lean -Agile business process improvement are:
Customers no longer want to wait for anything—they want it right now. Your organization has two choices: 1) figure out how to deliver the product or service immediately or 2) wait for someone else to figure out how to provide the product or service faster and put you out of business. Eighty percent of the problems with service or back office processes are related to delays. That being the case your management team needs to take a time-based approach to managing those processes instead of a cost focus. In the end focusing on reducing or eliminating time delays lead to reduced overhead costs as well as a reduction in errors.
Service and manufacturing can take advantage of a Lean-Agile approach to process improvement to improve their business processes. This approach to process improvement can deliver improved performance in as little as 4 hours compared to the many months of traditional Lean Six Sigma implementation.
Willie Carter has nearly four decades of continuous improvement experience, which have enabled him be a good listener, teacher, coach and leader as he helps organizations do more with less and become more agile. In addition to his consulting practice, he is on the adjunct faculty at Roosevelt University, Chicago, IL. You can learn more about Lean-Agile business process improvement here.