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Guide to process improvement tools

This is an overview some of the most used process improvement tools and how they can help lean process management within services and administration.

There are many process improvement methods out there. Just think of Total Quality Management, Business Process Re-engineering, CMMI, Six Sigma and Lean. This article is focused on lean tools since lean stands out from the pack when it comes to involving employees and seeing process improvement as everyone’s responsibility. We think this goes well with the culture of a modern, knowledge intensive service business with a lot of well skilled employees. It also emphasises the need for ongoing learning.

Four critical elements in any process improvement initiative

Most lean experts agree that you need to cover the following four main areas in your lean implementation:

    1. How to connect with strategy deployment
      This is about ensuring the initial and ongoing connection between your strategy and your process improvement initiatives.
    2. How to prioritize and select the right project
      Why and how you select which business areas and problems to target first.
    3. How to assign key roles & responsibilities
      Deciding who should have the critical roles in your process improvement initiative.
    4. Key process improvement tools and which to use
      Will you be doing value stream mapping and then proceeding with A3 and 5S? Selecting the right process improvement tools to your organization is critical.

This article on process improvement tools is divided into these four areas. For each area we’ll cover why you need to consider it and give you an overview of the most widely used tools and where you can find more in-depth reading.

How to connect with strategy deployment

Your process improvement efforts must contribute to your organization’s overall strategy. If it is a top priority to increase customer satisfaction, then measure your process improvement initiatives on how they contribute to this. This will explain how.

Lean uses “policy deployment” or the Hoshin Kanri method. Essentially it is about cascading through all levels of your company through “catch the ball process”. Top level management maps the overall value stream. This then connects with your improvement projects to improve specific processes down to activities that deliver results. In other words, the ball is thrown from senior management to middle management and to process owners and project managers who each run their own PDCA (Plan-Do-Check-Act) cycles. Regular follow-up and reporting (also known as “report outs”) ensure that each project stays on track in terms of delivering towards the strategy.

Some use an “X-matrix” to track what is being attempted versus what is being achieved. 


Download an Excel template for creating your own x-matrix.


How to prioritize and select the right project

Once you agree on how your process improvement effort connects with your strategy and what successful improvement outcomes will be then it is about selecting the right projects to start. For this there are three main project selection methods.

Use them together as a team or let each key stakeholder do their own scoring as a basis for discussion.

Pareto Priority Index

This is the cost-benefit perspective. It is about selecting the possible project that will give you the highest return on the invested resources. Calculate each suggested project using this tool to prioritize your projects by value:

Stakeholder scoring

Create a questionnaire where you score each project candidate on a scale from 1-5, where 1 is low and 5 is high.

We derive a score by multiplying all five factors since this will ensure that projects that do well on all accounts are rated higher than projects that only score highly on some parametres. Synergy matters.

You can do a similar exercise for valuing projects based on strategic objectives.

How to assign key roles & responsibilities

Now you know why you’re doing process improvement and what it should contribute to your strategy. You also know which projects that should be done first. This is the time to assign key and responsibilities to specific members of your organization.

Where Six Sigma uses a very formal structure of the CEO as the champion and Black Belts for driving the effort, lean is less formalized about the governance. What matters is that you identify sponsors and champions at all levels. The key is to try to give formal roles to as many key people as possible.

  1. The CEO, CFO or COO is the process improvement champion. He or she oversees the end-to-end connection of your processes so that you full value stream is covered.
  2. High level middle managers own high level processes.
  3. Middle managers or department managers own lower level processes.
  4. Other key staff own remaining processes and activities and ensure day-to-day process execution and process improvement.  

It is better to assign more part time people than fewer full time people. Why? Because this can help ensure the connection with day to day work. Your process improvement champions should use real work as the basis for process improvement. So, assigning someone for 20, 30 or 50% of their time can work well – if the person’s functional responsibilities are closely related.

Key process improvement tools and which to use

Once you have agreed on a process improvement setup then it is time to select the process improvement tools that will bring value to your effort. Here we cover some of the most proven and easy to use lean tools.

Value stream mapping

Lean’s definition of value is that it is something that the customer will pay for. Waste is something that the customer will not pay for. A value stream map is a visual depiction of the main flow from start to finish. It can be a common language for everybody so that your team can “learn to see” and understand what you do on a daily basis.

It is based on some key principles:

  • The customer pulls.
    It is started when the customer makes an order. Working backwards from the customer activities only start when the next activity requires its input.
  • There are internal and external customers.
    Not all flows are directly targeting the external customer. Some have internal customers.
  • Flow is what matters.
    Obstructions lead to waste and to customers waiting so it is about eliminating them and focus on the overall flow through the value stream.
  • Identify the value adding activities to understand what is waste.
    Classifying activities into “Value added”, “Value enabling” or “Non value added” will help identify opportunities to eliminate waste (the non value added activities).
  • You start with mapping the current state.
    Your current state has to be well understood and stable before you can start improving to reach your target future state value stream map.

We will not go into the details of how you do value stream mapping but these principles are critical to keep in mind both when working with your value stream and your underlying processes. Sample value chain for software production:


 

software-value-chain


 

A3 for problem solving

An A3 is, as the name suggests, a single page that summarizes a full problem analysis. It is a useful process improvement tool when working to eliminate the non value adding activities that your value stream map uncovered.


Download an editable A3 template (from the Lean Enterprise Institute).


5S for avoiding waste

5S is a workplace organization method that comes from the Toyota Production System. It is about keeping the workplace tidy and organized. Even though it has originated within manufacturing this process improvement tool is still highly relevant for organizing the knowledge worker’s workplace and the systems and tools he or she uses.

To organize the workplace for each role in your process you need to go through the following 5S phases:

Sort

It is about ensuring that only the essential works tools are there. E.g. eliminate all unused functions from systems.

Set in order

Arrange tools in the work order. E.g. think of your ERP screens as a flow to ensure exactly the input that is needed.

Shine

Keep the workplace clean and tidy. In the service organization this may be about data quality. Also many versions of the same file will confuse people.

Standardize

Standardize the best practices in the work area. Every process has a standard. E.g. who in the customer service team has the most well-organized workstation? Copy and standardize from him or her.

Sustain

Make these workplace organization efforts regular. Ensure that new work stations are set up in the right way. Perform regular audits and training to ensure everyone is onboard with the importance of an effective workstation.


Download a 5S Implementation Guide (this is a factory guide from the Lean Enterprise Institute).


5S in an office – see this 4-hour effort in 4 minutes:

This example if of a physical work space. Imagine doing the same for your systems and PCs!


Sources and further reading:

Womack, J. P., and Jones, D. T. (1996). Beyond Toyota: How to root out waste and pursue perfection. Harvard Business Review.

Biolos, J. (2002). Six sigma meets the service economy—six sigma: It’s not just for manufacturing. Harvard Management Update.

Swank, C. K. (2003). The lean service machine. Harvard Business Review.

Osada, Takashi (1995). The 5S’s: Five keys to a Total Quality Environment. US: Asian Productivity Organization.

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