Hi, today we're going to look at process improvement. To set the scene for process
improvement we have to take a look at a classic organisation or a company as they
look all around the world. A classic organisation has a board of management,
they have a sales and marketing function, they have production and they have
distribution. Of course, they have lots of other functions, that are sub-departments, all
kinds of forms and shapes. So, they have a big hierarchy with a lot of people and a lot of resources.
And the sales people they focus on making sales meeting their sales quotas, taking
orders with that sole purpose. The production people they want to produce
the order the most efficient way, they may want to wait until their machinery can
be utilised the best way until they can buy a big batch of raw materials. But,
they're also focused on their little part of the journey and find a
distribution they only want to drive off when the truck is full so to speak. So,
each department in the classic organisation are really focused on
resource and optimisation as we call it. Now, the problem with this setup is that
the customer he's out here and he places an order and because the sales
department prefers to do things their own way this order may have to wait a
little bit. It may have to go to a different department for clarification and then it has to go to another sub-department in production. Before there
are enough orders for production to start producing. And once they have
produced it may go into some kind of inventory, before it is there another
enough orders to send them off a truck. And the truck goes off and the customer gets his order.
Now this whole journey may take let's say, 100 days. But, the
question is how much of this activity was actually value-adding to the
customers order? So what percentage of these hundred days were actually spend
on value-adding activity? This question is what flow optimisation is about. And
flow optimisation is essentially process improvement. It's a completely different
perspective of your organisation where instead of having a focus on
resources and their efficiency we look at what is called the flowing unit. In
this case, it's first an order and later it's a product but, how is the flow
unit traveling through the organisation? Where is it waiting? What is
stopping it? That's the flow efficient organisation
and process improvement is the discipline of improving this overall
flow. So, let's have a look at how it's done. So first to improve this process we
first need to understand it and understanding it means mapping it. So if
we take this flow here, here in sales there's negativity. We need to know
exactly what's going on in here, what are the checklists what are the tasks they do?
The same thing in this department, what goes on in this activity? What goes on
here and here and here? And we need to make sure that this is actually the flow
that is followed each time. So we need to first map our process and then we need
to stabilise it, to standardise it. Because, if we don't stabilise it then we
will have a bit of a moving target to optimise on. So, it's only when we're
clear about what is the flow each time, and one of the activities done each
time, and everybody has the same picture of it that we are ready for the real
process improvement. But, this exercise alone is going to surface a lot of
obvious improvement points, a lot of waste that we can eliminate. This is sort of the
low-hanging fruit of process improvement. So once your process is mapped and stable
then it's time to look at it's flow. The normal classical organisation it takes
its starting point in the resources and that's the whole perspective of that
organisation. But, a process based organisation has the perspective of the
flow unit. The flow unit are the pieces of information, product, even people that
are moving through your process. And this flow is calculated by
throughput time. And throughput time is the cycle
time of each activity, the time it takes to complete each activity times the
number of flow units in the process. So, in this case, we had a throughput time of
100 days but, we estimated that we only had four instances of actually creating
value. And so in this case we may have had a process efficiency of just 4
percent. 4 days out of 100. So there is huge room for improvement here in this
process. So the question is how do we find it? And in order to do this we have to
look at the factors that stop the flow unit from flowing through our
process. And there are two major factors here one is variation, for instance if
our customers don't have a standardised way of giving us requirements, if we get
a lot of different requirements, so each product looks unique. Then this variation
will clog up these different activities and take a lot of time throughout
the process. So imagine, having a lot of special processing for very different orders.
Obviously, then you will see a lot of flow units clogging up here at this clip
here. And this will become a bottleneck, and the bottleneck is the second major
cause of flow inhibitors. Bottlenecks are forming around the activities that
take longer than the average. So we have to look at reducing variation by
simplifying the products we produce, how we take our orders in, how we can make
everything as ready as possible in the beginning. But, also of course the
fluctuations in demand. It's clear that if we suddenly have a lot of flow units
going through the system then a lot of the problems are going to show. So we can
get this demand trickling in all the time and have a few flow units in the
system and any moment in time then we are more able to be able to handle it at
the different workstations or the different activities so variation and
bottlenecks are the key things to look for. And what they also do is that if we
have a lot of flow units stopping at some point, then suddenly you will
need will have secondary needs. And secondary needs are when people will
have to for instance store inventory or find ways to handle a large volume of
problems. It could be that we need to call our customers to tell them things are
delayed, to give them a status. And it could be that they were stressed and a lot of
issues involved with having this group of people handling a lot of different
flowing rooms at any moment in time. So this is really the discipline of
process improvement and this is where we can effectively use lean tools such as
5s for instance to optimise how our our tools are organised in each workstation.
But, also tools such as A3 to analyse why certain problems occur.
And gradually remove all the redundant secondary activities that are happening
in our flow. And make it as value-adding as possible so that we
reduce the number of days in throughput time and a number of activity going in
that doesn't add any value to the customer in the end. So that's really the
essence of process improvement and I hope you have found this video inspiring
to go out in your own business and find areas where you can improve. And of
course while this is a manufacturing example, the principle is the same. If
we're dealing with paper flows, if we're dealing with patient flows
all that matters is that we take the perspective of the flow unit.
And we travel through the system through our organisation with this perspective.
And we look at the activities that are that value-adding and try to
eliminate everything else. That's what we need to do in process improvement.
So, thank you for your attention.
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