Focusing on the Process (Part 1 of 2)
All businesses require processes for the creation of products and services. A process is a collection of activities that consumes resources and adds value to the consumer (in the form of products / services) with some form of benefit paid to the producer. Additionally, all processes have variation – in business we call this risk. As H. Edward Deming, pioneer in the field of quality management, points out – If you can better understand variation in a process, then you can plan for it and do things to prevent it.
Unfortunately, there is a viewpoint that people may represent the source of problems for most business processes. A much better approach is to understand how people and their activities fit within the process. Processes tend to superimpose control over people and in today's entrepreneurial world, no-one wants to be controlled. Therefore, by focusing on the process, as opposed to looking at people as the source of the problem, we unleash the human capabilities of the organization. Too often, management is working to change people when it should focus more on changing the process which in turn leads to positive change on people. Additionally, when you focus on the process, you switch over from short-term bottom line thinking to quality, customer driven thinking. This is a much more sustainable approach to real long-term growth and profitability.
By focusing on the process, you will:
- Better focus on the customer
- Improve competitive position through quality and service
- Gain insight into how errors are introduced into the business leading to preventative measures for improvement and elimination of error correction activities (such as Six Sigma)
Managing a process begins with a very detail understanding of how the process works. This may require organizing the company for process improvement – appointing team leaders, investing in training, and running pilot programs on critical processes. One simple way to understand a process is to flow the process using a block diagram. Block diagrams provide simple visual flows of what takes place within the process. Once you understand how a process works, the next step is to make it efficient. This usually requires an emphasis on reducing errors and defects that occur within the process. Additionally, removing barriers within a process is a common way of empowering people and improving the process.
“We are spending all of our time saying: ‘I'm sorry, I'll fix it', to customers who are increasingly sophisticated and understandably impatient. What we should be doing is developing processes that will make it unnecessary to ever apologize for inadequacies.”
- Business Process Improvement: The Breakthrough Strategy for Total Quality, Productivity, and Competitiveness by H. James Harrington
Another common attribute of process management is measurement of the process. Common measurements for a process include resource consumptions per unit, cycle times, wait times, and % value added per unit. Reducing time related measurement's is often a goal behind process improvement. This may require additional automation and upgrading of technologies.
Many managers seem to equate process improvement projects in relation to costs. Unfortunately, many managers never evaluate a process in relation to quality, they always jump to the question: How much is it going to cost? Therefore, managers need to understand the relationship between quality and costs. Quality and costs go hand in hand for process management. By improving quality, costs naturally come down.
“With better quality and lower costs, you can capture the market.” – H. Edward Deming, leading advocate of quality management
Written by: Matt H. Evans, CPA, CMA, CFM | Email: email@example.com | Phone: 1-877-807-8756
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