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Process Improvements-Harvard business course

By Joan Scott,2014-08-27 22:24
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Process Improvements-Harvard business course

Have you ever had a moment at work when you’ve shaken your head and said, “There has to be a

    better way to do this”? If so, then you have an aptitude for business process improvement. But what are business processes? They’re the series of steps people carry out to generate a desired outcome

    such as a product or service.

    For example, at an automobile manufacturer, the assembly process involves putting parts together to create vehicle systems, and then integrating systems to create the vehicles sold to customers. Or, a customer service process involves answering phone calls, identifying the caller’s problem, and devising a solution.

    Savvy companies try to constantly improve their processes. Why? Continuous improvement enhances efficiency, lowers costs, and makes customers happy ultimately increasing profitability.

    How might you improve processes in your organization? Treat process improvement as a six-phase

    effort:

    First, select a process to improve

    Second, examine that process for problems

    Third, decide how to change the process

    Fourth, acquire resources to make the changes

    Fifth, carry out the changes

    And sixth, evaluate the new process

    To see how these six phases work in practice, let’s visit the Pagoda, a regional and expanding

    restaurant chain. Sally, the operations manager, isn’t happy. A year ago, the Pagoda set a goal of launching a new entrée every three months. The first quarter, it barely launched the new offering in time. For the next two quarters, it failed entirely to meet the deadlines. Clearly, something’s wrong

    with the entrée-development process. By noticing this, Sally has completed the first phase of process

    improvement: selecting a process to improve.

    Now she’s ready for the second phase: examining that process for problems. Sally talks with

    everyone involved in entrée development to see how the process currently works. Here’s what she discovers: To develop new entrées, the chain’s head chef proposes a recipe at the beginning of every quarter. Then the accounting department analyzes the cost to determine financial feasibility. If the entrée is too expensive, it goes back to the head chef for revision. If it meets cost criteria, all chefs receive training on the recipe. After training is successfully completed, the company procures the ingredients needed for the new dish. Once the ingredients arrive, the company launches the entrée. Sally recognizes that this process is too linear and presents several problems. To begin with, developing only one new entrée at a time is risky. If the company has trouble procuring the ingredients for the dish once it is approved, the launch will be delayed. And the company won’t have a backup offering in place to launch within the three-month deadline. Also, by waiting until after training to procure ingredients, the company lengthens the process unnecessarily risking further delays.

    Sally now comes to the third phase of process improvement: deciding how to change the process.

    Here’s what Sally recommends: At the beginning of every quarter, the head chef proposes three new

    entrées instead of just one. Then the accounting department analyzes the costs to determine financial feasibility. If any of the proposed dishes is too expensive, it goes back for revision. For entrées that meet cost criteria, all chefs immediately begin training. Concurrent with training, the company procures the ingredients needed for the approved dishes. After procurement, the company launches a new offering at the end of the quarter.

    These changes could greatly improve the efficiency of the entrée development process. By developing several new dishes at once, the company will have backup possibilities in case something goes wrong with a proposed entrée. For example, if there is a shortage of needed ingredients, the company can quickly switch to another approved recipe. It will also have new recipes in the pipeline for the coming quarter. Finally, by carrying out training and procurement simultaneously, the company will significantly shorten the process.

    Sally now moves to the fourth phase of process improvement: acquiring resources to make the

    proposed changes. She hires an assistant to the head chef to help develop and revise proposed entrées and to oversee the entrée-development process. That way, Sally can be sure that enough new dishes get proposed and approved every quarter.

    Sally is ready for the fifth phase: carrying out the changes. At the beginning of the next quarter, the

    head chef and assistant begin generating three proposed new dishes. Later, while chefs are being trained on newly approved entrées, the company procures the required ingredients. Over the next three quarters, Sally carries out the sixth phase of process improvement: evaluating the

    new process. She tracks how well the company is meeting its goal of launching a new dish every quarter. And she further hones the entrée development process.

    For example, the following quarter, the company again launches a new dish successfully. But at the end of the next quarter, several chefs have not fully mastered all the approved entrées. And the company once again fails to launch a new dish on time. Sally realizes that now that the chefs are learning several new recipes at once, they need more time for training. She arranges to start training earlier. The following quarter, the Pagoda proudly launches not one, but two new offerings to rave

    reviews from patrons. Sally is relieved to have surpassed the quarterly goal, after failing to meet several earlier goals.

    Like Sally, you can continuously enhance important business processes in your own department. Whenever you notice mistakes happening or goals falling short, you know it’s time to improve a process. Remember the six phases of process improvement: Select a process that needs to be improved. Examine that process for problems, decide how to change it, and acquire any necessary resources. Carry out the changes and then evaluate the new process.

    With every process improvement you make, you help your company function more efficiently and profitably. Everyone wins: you, your customers, and your organization.

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