Embracing Change There's always room for improving your bottom line! by Susie Lunt The customer-oriented Process Improvement, which relies on data rather than intuition, brings benefits to everyone in the production chain, from employers to employees and customers, and is powerful for improving your bottom line, saving jobs and lifting profits Dreamed up in the 90s by Michael Hammer, the concept of Process Reengineering (PR) had a revolutionary impact on the way companies operated, but came to be associated with large-scale lay-offs and often attracted resistance from employees. Today, however, Sidney Yuen, Chairman of the HK Benchmarking Clearinghouse - a non-profit organisation promoting benchmarking and sharing best practices knowledge among companies in China and Hong Kong - believes that companies prefer to use Process Improvement (PI) in their efforts to remain competitive. Milder re-engineering "This is a more gentle term that assumes that a process doesn't need a total face-lift," says Mr Yuen. He stresses that PI, the offspring of PR, requires businesses to take a fresh look at their processes in relation to their strategy. "This initiative improves business performance by defining the processes that create the most efficient operating environments for customers, management, employees and suppliers." Since it focuses on any activities or groups that take an input, add value to it and then provide an output to an internal or external customer, PI can be applied to a very broad sector - from large multi-national organisations to small- and medium-sized enterprises and non-governmental organisations. Customer first Essentially, PI projects are customer-oriented, Mr Yuen explains. And, being customer- rather than internally-driven, they rely on factual data instead of intuition. "The PI champion is a devil's advocate, identifying pitfalls, and can sometimes make people feel uncomfortable in order to improve a process. So map out your process, anticipate people's needs and view the process as a wake-up call" As opposed to emphasising near-term efficiency and cost improvements, PI takes the longer-term approach. In addition, rather than merely involving one or two organisational levels, PI is horizontal: slicing across organisations and incorporating a variety of departments in the practical operating process. However, for this to work in practice, PI practitioners need to take a bold, "out-of-the-box thinking approach", says Mr Yuen. In other words, first observe what other people are doing and "benchmark how other organisations are managing these key processes". "You should also integrate processes and the roles people play within the organisation to maximise profitability and quality", he adds. "Align business strategies with processes, so that strategies are more quickly implemented and objectives achieved; help employees to embrace these changes; and determine how technology can enable improved processes and higher levels of performance." "It's very important to achieve a total transformation of what you do. Look at the process and make sure you get the sequence right. Put customer requirements first. See what makes sense - and what doesn't." Major benefits "A structured, systematic approach ensures that our processes meet or exceed our customers' expectations better and better over time, in the most efficient manner possible," says Mr Yuen. In his opinion, this leads to major benefits such as lower costs resulting from a reduction in redundancy, low- or no-value work, reworking errors and cycle time, plus increased customer satisfaction and revenue resulting from improved performance, improved employee morale, increased management commitment and employee involvement. Another benefit not to be ignored is "Customer delight", according to Mr Yuen, coming from a service received from suppliers that is least expected. "These things don't just happen! The supplier will have gone through a customer analysis, anticipated needs and developed a process in order to give the customer a 'Wow!'" Breaking eggs to make omlettes "The PI champion is a devil's advocate, identifying pitfalls, and can sometimes make people feel uncomfortable in order to improve a process. So map out your process, anticipate people's needs and view the process as a wake-up call," Mr Yuen advises. However, he also emphasises that PI practitioners should not hesitate to seek advice from outside. "Every industry has benchmarking data. A good innovative process idea can be from any industry outside your own - for example, MacDonalds was benchmarked against Mobil." "Ultimately, when you are pushing for Process Improvement, ask yourself 'Who are your real customers?' and 'Where is the incentive?'" concludes Mr Yuen. "Build it into your management improvement system. Ask yourself, what one or two things must I do this year to make a major impact towards my organisation? Think out of the box!" But Mr Yuen warns: "To sustain this PI culture, companies must set up an infrastructure whereby they can monitor developments and continuously improve, otherwise, the old culture will creep back up on you and you will end up with where you started." Before & After Before -Duplication of work - changing technology, goalposts and customer expectations and outdated policy leads to more people doing the same work -Customer complaints - competitive pressure forces customers into having higher expectations and they are constantly dissatisfied -Escalating cost - unless processes are condensed, increased cost is inevitable -Poor morale - work duplication and management pressure impacts employees' and affects people's morale After -Streamlining work - less hands-on interaction and fewer departments handling the job -Customer delight - undergoing customer analysis and anticipating customer needs develops processes that give customers an unexpected "Wow!" -Cost reduction - PI doesn't improve by 10 or 20%; by dramatically changing the way a process works, it means significant cost reduction -Teamwork - PI takes the horizontal approach, so people have to work together to achieve common goals Taken from Career Times 24 January 2003 Your comments are welcome at [email protected]