How Can Business Processes be Improved? 7 Step Guide to Transforming your Processes Today
Most small business owners often ask how can business processes be improved? After all, who wouldn’t want to get more done with the same resource, achieving better quality and getting their staff to work the same way? So here’s a guide to help show you how to get started quickly and with little fuss.
So, how can business processes be improved? Map your key processes and at each step, identify if each one adds value (a money making activity) or not (non value added). If it is non value added, then try to eliminate it, reduce the time it takes to do it, or combine it with other tasks. By doing this, you can improve the quality and efficiency of the entire process, because you’ll spend less time on wasteful activities.
Here are the main steps which you can complete in a couple of hours, to make an impact on your processes:
- Walk the process and map how the process actually works (using post-it notes)
- Identify the inefficient steps – These are the ones that are not adding value
- Define the metrics – How long the process takes, and how long the total non-value added time is
- Define the process efficiency by dividing the total NVA time against the total process time
- Brainstorm ideas to improve the efficiency and remove the NVA
- Create a future state map
- Work through the action plan
In this case, it makes sense walking you through a business process example, so you can see the 7 steps in action, and use it to make improvements quickly.
The mistake a lot of people make is to document their process in a flowchart. The problem with this approach is that it captures just how the steps come together. Here’s a flowchart:
Through this approach, you miss the vital questions to make great process improvements, and that is:
“How is the process performing?”
“Where are the areas of inefficiency?”
“Where are the bottlenecks or the parts that slow things up?”
A simple flow chart of a process gives nothing more than a picture of work-flow.
What we need is a better picture, so we can see your business processes with a different lens. Here’s how we do it.
Non Value Added Activities Versus Value Added Activities
All processes inherently have both value-added (VA) and non-value added (NVA) steps. They define how efficient your business processes are.
Value Added Tasks
These are the steps that change the nature or shape of the product or service, in line with what the customer is expecting.
Or to put it another way, if you walked your process with your customer, how many activities would they be truly willing to pay for?
If you think about it, there are very few steps that are really value added.
If we manufacture pens, then the moulding and assembling of each pen are adding value. All other tasks like getting the material, setting the machine up, inspecting, and moving around are not.
If it’s in a warehouse, the only value added tasks here are picking off the shelf and packing. All other activities are not adding value.
In a project management process, the value added tasks are to provide a quote, sign off specification, agree drawings, deliver on site at the required time. Everything else is not value added.
Non Value Added Activities
By definition, if it’s not a value-added task, then it’s waste!
These steps are the ones that absorb time and resource and are what’s making you think your processes just don’t feel productive enough.
Don’t get me wrong, you may have to do some of these important NVA tasks, but nonetheless, they’re still NVA and waste. So try to seem them as VA or waste.
it’s not uncommon for your processes across the whole of the business to have around 5% value added tasks.
All the others are non-value added.
That’s a lot of opportunity to improve your business processes.
Here’s the 7 step activity in more detail, to map your business process and make them more productive.
Step 1: Map Your Process.
Before we fly into trying to find where the NVA is, we need a structured and repeatable way to do this.
The best way to map your process is to use post-its. It’s simple and fast. And it allows a team to get together and map processes “As-is”.
The key here is to walk the process and map the steps as they happen, NOT AS YOU THINK THEY HAPPEN, or WHAT THEY SHOULD BE!
Each post-it reflects a task. Whilst you map, capture the process time and distance travelled for each task:
Continue mapping until you have all post-its revealing the entire process.
Now’s time to put them on a chart on the wall and discuss with the team:
Step 2: Identify the NVA tasks
Now the team know the difference between NVA and VA, we need to identify all the NVA items.
At this stage we want to highlight just how much waste there is in the process, so touch each task and ask if it’s a VA or NVA. Where there’s NVA, put a red dot or cross against each post-it. In our examples, they’re the red post-its.
Step 3: Calculate the metrics
It’s now time to add up all the metrics you capture. The reason being is that we need to identify how the process is working, rather than just how it flows.
- First add up all individual process times and write the total process time at the end of the map. This will show the process’ typical total process time.
- Then add up all the NVA activities. Add this to the map, underneath the total process time. This will show how much wasteful activities there are in the process
- Now calculate the value add time, by adding these up, posting the calculation with the other metrics. We’ll need this figure to give us a process efficiency.
Step 4: Define your Process Efficiency
The process efficiency metric is great to use when improving your business processes. It measures the actual value-added time against the total process time.
And the lower the score, the worse your efficiency is.
It’s measured by the following simple formula:
Value Added Time / Total Process Time x 100.
And once you have this number, add it to the map underneath the other metrics.
Step 5: For each NVA step, brainstorm Ideas to improve
We now need to try to remove as much of the NVA tasks as we can. Try to do one of the following 3 things:
- Look to eliminate that task completely…
If you can’t do this, then….
- Reduce the time it takes to do this…
If this can’t be done, then….
- Look to combine this activity with other tasks, so they’re processed at the same time
Naturally, the above steps require that you touch every step and brainstorm ideas to either eliminate, reduce or combine. So get the team shouting out ideas, as you record them.
Once you’ve gone through this step and you’ve created ideas for all the NVA steps, it’s time to create a new Process Map.
Step 6: Create a Future State Process Map
Take the ideas you’ve created in step 5 and discuss how the new process will look.
Remap this new process, based on the improvement ideas generated. Use post-it notes, as before, and post the new predicted metrics that you’d expect from this new way of working.
Remember to base these new steps and metrics on the improvements the team defined. Your map, when complete should look something like the following, but with post-its on the wall, of course..
We want to increase the productivity of our process. Any improvement is a positive, so you don’t have to double productivity at the first attempt. If you’re removing the distance travelled and total process time, then it’s a successful project.
Your process efficiency is a great indicator to show you the overall improvements.
Step 7: Execute the Actions
You now have a new process designed. What’s needed is the action to take it from its slow and inefficient current state, and transform it into its productivity-busting future state.
Take the actions and add them to an excel sheet or better still, a project board and get the team to work together to close the actions off regularly.
Remember to review the action plan regularly, until you’ve completed them and transformed your process to the future state.
And keep going. Do the same thing within 6-12 months, so you can improve your process efficiency even more.
The following questions are what people typically ask when discussing this technique.
Is this Process the Only Way of Improving Your Business Processes? No, it’s not the only way. You’ll find more methods throughout this website. What it allows you to do is implement high impact change quickly and effectively, whilst getting the team to improve the process.
It’s important to improve your processes, based on metrics. This method gives you that. Don’t get hung up in trying to obtain exact times and data. Get a good feel, and leave it at that.
Can I use the Method for every process? Yes, you can follow this simple plan to improve all of your business processes. It’s simple and effective.
What’s the Difference Between a Flow Chart and a Process Map? A flowchart just maps the sequence of steps in a process. It’s often used to document a standard way of working, for people to follow. It’s also used in identifying processes before implementing an IT system, to ensure the system fits the way things are done.
A process map has more information. You use metrics to show how the process is performing, not just what happens. It’s a tool to help make productivity improvements and to see clearly where you need to fix things.
How Do I Ensure That People Follow This New Process? Firstly, you must make it the standard. Create a digital version of the new process. Print it out and ensure it’s at the place of work – where the process gets completed.
Before this, run through this new way with everyone concerned, so they are crystal clear with what they need to do and how.
Also, ensure that you review the process regularly. Don’t just change it and walk away. Be prepared for processes to slip and people reverting back to the old way of working.
It won’t be intentional, just habitual. People are creatures of habit and tend to revert back to what feels comfortable. This new process may feel a little odd to start with.
You must ensure you walk the process frequently, and ensure that what should be followed, actually is being followed.
After a while, people will adopt this new process as the norm.