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Inside the May issue:

Question of the month: In the course of process improvement, what is the benefit of focusing to reduce process variation before attempting to increase the process mean? Find the answer at the end of this newsletter.

BY Chris Anderson
May 31, 2005

This month we discussed process improvement. The primary goal of process improvement is to increase marginal benefit (eg. profit contribution) per transaction (eg. sale) without increasing fixed costs. So, in effect, you are working hard to improve your asset utilization or productivity.

Transforming Objectives into Results

Business objectives should unite the business to realize a common purpose. Setting objectives may be easy, but are the objectives based on facts or derived from analysis? Too often companies focus on mean objectives like sales or costs. However, unless the cause(s) and effect(s) of process variation are understood, increasing the mean objectives may yield undesirable results. While reducing variation generally reduces waste and scrap, increasing mean may amplify the variation and create more instability.

Read more about objectives and results…

Driving Results with Business Metrics

Business executives’ process improvement initiatives or “value language” needs to be translated into business metrics—the language managers use to make decisions. Business metrics should be further translated into action plans—the language that empowers employees to achieve the organizational objectives.

Read more about business metrics and business situations…

Determining Process Improvement Duration

In the beginning of a process improvement project you will typically find the biggest waste up-front. But, as time progresses, you will find fewer big opportunities for improvement and end up focusing on smaller and smaller projects with lower savings. This dynamic is a quality standard also referred to as the Plan-Do-Check-Act learning loop or ‘PDCA cycle’, which is at the heart of any improvement process such as one for ISO compliance.

Read more about the duration for process improvement…

Getting Buy-in to Ensure Results

In order to set objectives for real process improvement we may need to change the rules, incentives, and measurements used within the organization. And to ensure the changes are effective, we need everyone’s buy-in to the change program. Only if you empower employees to get involved in the process of improvement can you truly realize the goals and objectives you set.

Read more about ensuring results by getting buy-in…

Process improvement can result in real benefits for your organization. Increased productivity, reduced waste and fact-based decision making can all be results of your process improvement initiatives.

You can learn how to improve your organization by attending the next How to create well-defined processes class offered by Bizmanualz. 

Reader Feedback

Once again, thank you for your feedback and words of encouragement. One of you wrote that our series on process improvement is “a great planning tool to help get things done.”

We thank all of you for your comments and feedback. This forum is for your benefit and your suggestions and article ideas can go a long way for us to write about what you want to know. Please keep your feedbacks coming. Contact us with any comments, questions or relevant stories.

On That Note

Answer to this month's question:

Reducing process variation produces greater stability, improved predictability and better control. This way there are fewer unknowns and you can focus on the knowns with less risk of impacting the process. Increasing mean without reducing variation could lead to increases in both negative and positive factors. As a result the process might go through greater instability.

We will continue to bring you useful information and helpful tips pertaining to policies, procedures and processes. Let us know if you'd like any specific topic addressed.

Best regards,
Chris
Bizmanualz, Inc