What is Process Improvement? Approach, Steps, Strategies

What is Process Improvement?

Process improvement refers to the systematic approach of identifying, analyzing, and enhancing business processes to make them more efficient, effective, and productive. It involves the identification of inefficiencies, bottlenecks, and opportunities for improvement within an organization’s processes, followed by the implementation of solutions to address these issues.

Process improvement can involve a wide range of activities, such as the redesign of workflows, the automation of tasks, the elimination of waste, the streamlining of communication channels, and the optimization of resource allocation. It often requires collaboration between different departments and stakeholders within an organization, as well as the use of various analytical tools and methodologies to measure and monitor progress.

Improvement involves a course of action intended to make something better by bringing certain changes. Since the implemented changes have an overall impact on a product or service, the term improvement, however small, will keep the entire process impacted. Hence, the word improvement is aligned with the word ‘process’.

Process, as you have already studied, is a sequence of activities involved in converting inputs into output. Process elements interact continuously with each other to produce the desired output.

Process improvement is an ongoing practice that identifies, analyses, and improves existing business processes within an organization to meet new standards of quality. It involves a systematic approach to focus on different areas of improvement and uses different methods to achieve the best results. Processes can either be added with sub-processes or even eliminated for achieving the ultimate goal of improvement.

The outcome of process improvement can be measured in terms of development in product quality, customer loyalty, customer satisfaction, increased productivity, increased efficiency, and profit, development of the skills of employees, higher and faster Return on Investment (ROI), etc.

Approach to Process Improvement

Two approaches to achieve process improvement. Let us discuss these approaches in detail.

• Continuous Improvement (CI)
  
• Breakthrough Improvement

Continuous Improvement (CI)

Continuous improvement can be defined as an ongoing effort of improving the products, services, and processes of an organization. To do so, an organization needs to continuously manage its processes, identify problems and eliminate them. CI encompasses all the processes and departments of an organization like engineering, information technology, finance, commercial, marketing, purchasing, manufacturing, etc. CI follows the top-to-down approach as the top management initiates and supports the process. It requires the participation of all the employees of an organization.

The following are the main aspects of CI:

• Understanding the tools and techniques required for the CI, such as six sigma and Just-in-Time (JIT)
  
  
• Building and nurturing strong continuous improvement culture in the organization across the organizational hierarchy
  
  
• Building customer focus which is the ability to anticipate customer needs and requirements
  
  
• Showing strong commitment and leadership across all the department
  
  
• Focusing on quality as well as on cost and timing
  
  
• Defining and scheduling the breakthrough improvements in the system
  
  
• Linking of business strategies and results towards CI

CI focuses on structure, process, and evaluation, which in turn, work on efforts to identify and improve the root cause of problems, intervene to reduce or eliminate these causes and take steps to correct the process. Despite being a challenging task, CI provides many benefits to an organization.

Some main benefits of CI are:

• Reduction in waste through prevention of errors
  
  
• Improvement in product quality
  
• Reduction in the rework time
  
  
• Reduction in the cycle time
  
  
• Faster response time, i.e., fulfilling customer orders on time
  
  
• Competitive edge by bringing down costs
  
  
• Higher customer value and satisfaction
  
  
• Higher employee motivation

In CI, size or rate of improvement is not important. What does really matter in CI is that improvement should be ongoing and every month/week/quarter or whatever period is appropriate, some kind of improvement must take place.

Breakthrough Improvement

Unlike continuous improvement, breakthrough improvement focuses on discontinuous changes. Breakthrough improvement results from creative and innovative thinking and is often motivated by stretch goals. Stretch goals compel an organization to think innovatively and creatively to encourage improvements. Take the example of an organization that has set a 10 percent improvement goal. Organizations usually meet such goals by implementing some minor improvements.

Now, if the improvement goal is 1,000 percent, the organization would require thinking out of the box to achieve the goal. The seemingly impossible goals can be achieved by boosting employee morale and generating dramatic improvements. Take the example of Motorola which used Six Sigma to achieve the goal of improving the quality of its products ten times in just two years.

The impact of breakthrough improvement is relatively sudden and shows a step change in practice. Not only this, but such improvements also demand a high investment of capital. As these improvements may involve frequent changes in the product/service or process technology, they can disrupt the ongoing working of the current operations.

Due to huge investments in terms of capital and time, breakthrough improvement projects are typically run by a steering group, which involves a set of top-level managers who have enough expertise to run such projects. Breakthrough improvement projects result in maximum economic return in the short to medium terms.

Breakthrough improvement focuses highly on creative solutions, which further supports the idea of involving novel and liberal thinking. This differentiates it from continuous improvement, which is less ambitious and non-radical. Continuous improvement principles focus on non-stop improvements, irrespective of the improvement size, rate, or type.

Thus, such improvements can be implemented by anyone and everyone in the organization to improve the working processes and practices. However, this is not the case for breakthrough improvement. The breakthrough improvement practices require expertise and competence for sprinting. Table 5.2 shows major features of continuous and breakthrough improvement:

Steps in Process Improvement

As you know, process improvement is a systematic approach and involves several steps, which are:

• Identifying the core outputs is mandatory for customer satisfaction; for example, the core outputs of a restaurant can be the taste and the quality of the food and beverages served
  
  
• Investigating how input variables (the A’s) affect core outputs, i.e., goods and services; for example, this step would involve checking the quality of raw materials used in preparing food in the restaurant
  
  
• Reducing variation by identifying causes and monitoring and controlling key process inputs; for example, in a restaurant, quality improvement can be achieved by consistently monitoring the causes of the quality issues and ensuring the right quality of inputs, such as fruits, vegetables, spices, etc.

Strategies for Process Improvement

An improvement strategy sets out the overall objective of quality to ensure that all improvement in a system is well planned, managed, measured, and monitored for the achievement of outcomes for customers. Areas of improvement in an organization are:

• Reduction in manufacturing costs
  
• Reduction in cycle time
  
• Reduction in downtime
  
• Reduction in changeover time
  
• Improvement in the flow of communication
  
• Improvement in productivity
  
• Increase in capacity

Objectives of an improvement strategy are:

• Making improvement an integral part of a system and inculcating it into the company culture
  
  
• Ensuring customer satisfaction
  
  
• Monitoring the impact of quality improvement activities from the perspective of the organization and its customers

There are mainly four improvement strategies: repair, refinement, renovation, and reinvention. Let us discuss these strategies in detail.

• Repair
  
• Refinement
  
• Renovation
  
• Reinvention

Repair

Repair involves fixing any sort of device or equipment etc. which is out of order or broken. Therefore, it emphasizes keeping the device in working order either by scheduled or preventive maintenance. Repair involves combined efforts of technical, administrative, managerial, and supervision staff. For example, you do a service of the car in a stipulated distance covered or a time.

Refinement

Refinement involves continuous improvement of the process which is not broken or out of order. In other words, it involves incremental improvements in products, processes, and services. Refinement is applicable at an individual level as well as a team level.

An important benefit of refinement is that it faces little or no resistance from employees. However, at times refinement only results in small improvement which is not recognized by management. For example, there may be an easier way to do a task that will improve the process.

Renovation

Renovation strategy brings a breakthrough in quality improvement. In renovation, improvement happens through improved focus and systematic exploitation of opportunities. In other words, the renovation strategy inculcates major changes in the existing systems and processes in an organization. Therefore, as you can see this approach is significantly different from the earlier approaches as they focus more on refining or repairing the existing processes.

Renovation heavily relies on scientific methods and technologies. Therefore, renovation is more expensive to apply. For example, if a manufacturer renovates the production process by installing more technologically sophisticated types of machinery, control systems, etc. rather than repairing or refining the existing system, it would naturally be more expensive.

Reinvention

Reinvention is a commonly used term in engineering disciplines. It means duplication of a basic method that has previously been created or optimized. It is a highly demanding and expensive improvement strategy. It emphasizes the development of new methods and processes to improve quality and increase customer satisfaction. For example, mobile manufacturers continuously come up with new designs and versions of mobile phones to capture the market and provide more satisfaction to customers.