Conducting Process Audits For Municipal Government

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This presentation details how to conduct a process audit of local and municipal governments. A process audit is a strong, proactive tool for improving process outputs. Many local governments are adopting a zero overhead growth strategy(ZOG) which is dependent on key continuous improvement tools. Process audting is a wonderful continuous improvement tool.

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Conducting Process Audits For Municipal Government

  1. 1. Improving Municipal Government Processes How to Conduct a Customer Focused Process Audit © Quality Minds, Inc. June 2009
  2. 2. What is a Process? • An activity, using resources, managed in order to transfer inputs into outputs. – Often the output from one process forms the input to the next process. Inputs Outputs Process 1. Material 1. A part 2. People 2. A critical dimension 3. Procedures 3. A critical characteristic 4. Customer 4. Communication requirements 5. Data 5. Drawings 6. Information Step Step Step Step A process 1 2 3 4 may have Input Output multiple steps 2
  3. 3. The Case for Process Audits • Fire Fighting – Most organizations consistently check the products or services that are provided to customers. But this is a reactive check. • The product or service is already completed. Costs, man hours, etc. are tied up in the completed product or service. If the product or service is nonconforming, you must start over. • Be Proactive – Good processes yield good products and services. Bad processes yield bad products and services (garbage in equals garbage out!). Instead of focusing on the output of the process (products and/or services) spend time and resources checking the health of processes. – If you continuously check (audit) processes and use the results to take improvement steps, you will continuously improve the products and services created by the process. 3
  4. 4. How to Perform a Process Audit Step One: Define the Process • Before you audit anything, there must be a standard in place to audit against. Simply put, auditing is “say what you do (via a standard) and do what you say” • Three Methods for Creating a Standard (or definition) of a Process – Process Flow Diagram – Deployment Diagram – SIPOC Diagram 4
  5. 5. Creating a Process Flow Diagram 1. Determine the start and stop points to your flow of process steps . The stop point is typically near the customer. 2. Walk through the flow, writing down the process steps as they exist now (Rule of thumb: Pretend your are the product or service). Make sure you use a noun and verb to describe the process step. 3. Once you have roughly mapped out the process, make it more formal by adding symbols. Activity Decision Point Start/Stop (Process Step) 4. Once finished, sign and date the flow diagram with a revision level. 5
  6. 6. Creating a Deployment Flow Chart (Swim Lane) 1. Here a quot;departmentquot; or quot;agencyquot; dimension is added horizontally along the top of the chart. You may use individuals, groups, departments, functions, etc. - whatever kinds of 'units' play major roles in the process. 2. Draw vertical lines to separate the functional boundaries. 3. When the flow moves from one function to another, a horizontal line ideally denotes this. 4. Apart from the ideally horizontal moves between functions, aim when possible to draw the sequence of activities from top to bottom. 5. Use the task and decision-making symbols as before and always connect symbols with arrows indicating the direction of flow. 6
  7. 7. SIPOC Diagram • Suppliers: The entities that provide whatever is worked on in the process (information, forms, material). The supplier may be an outside vendor or another division or a coworker (as an internal supplier). • Input: The information or material provided by the supplier and used by the process.. • Process: The steps used to convert inputs into outputs. (some steps are value added and some are not value added) • Output: The product, service or information being sent to the customer. This is what the customer pays for. He/she wants output: – With good quality – Delivered on time – At a competitive price • Customers: The next step in the process, or the final (external) customers. 7
  8. 8. Creating a SIPOC Diagram 1. Create an area that will allow the team to post additions to the SIPOC S I P O C diagram. This could be: • A transparency (shown with an overhead projector) made of the SIPOC template • Flip charts with headings (S-I-P- O-C) written on each • Headings written on post-it notes posted to a wall. 2. Begin with the process. Map it in four to five general steps. 3. Identify the outputs of this process. 4. Identify the customers that will receive the outputs of this process. 5. Identify the inputs required for the process to function properly. 6. Identify the suppliers of the inputs that are required by the process. 8
  9. 9. Levels of Measurement for SIPOC Diagram Inputs Outputs Step One Step Two Step Three Macro View-All Process Steps Micro View-Each Process Step Step Two S I P O C S I P O C Step Step One One Step Step Two Two Step Step Three Three Etc. 9
  10. 10. How to Perform a Process Audit Step Two: Perform the Audit • Once you define the process, you can begin auditing the process • Perform the Audit in Three Phases: – Understand the Customer • Requirements • Voice of the customer – Understand the Process • How was the process created? – Performance of Process • Assess inputs and outputs 10
  11. 11. Phase One Get copy of SIPOC Get copy of process What is the voice of the If applicable, get copy Pick a process customer?-Quality, of customer’s diagram for process flow diagram or to audit Delivery, Satisfaction, specifications and/or deployment diagram Etc. requirements Phase Two Yes Write down the Is there a Review customer’s Review it and customer’s critical internal requirements with document results requirements specification? creators of process Does it match Go through the requirements the customer’s No and make sure the organization agrees with the specification? requirements. If there are Get SIPOC diagram exceptions, make sure they for process steps to are being addressed. Do they match? be evaluated in walk Are they linked? through Find out how he/she manages the Start third phase of Third department. What performance audit by interviewing supervisor Phase metrics are tracked? Travel as the product or service Using the process flow How to Conduct a Process diagram and SIPOC does. Evaluate key outputs and diagrams, walk through Audit inputs at each step. How well are the process the outputs meeting customer requirements? If requirements are not met, what is done? What is Be sure and present the quality of each input? Are they Summarize Results results to leadership delivered on time? If an input is (85/15 rule) bad, what is being done with the supplier? Issue audit report 11
  12. 12. How to Perform a Process Audit Step Three: Check Results of Audit • It is critical that the results of audits be reviewed by organizational leadership • Leadership Support makes the Difference: • Deming’s 85/15 Rule: 85% of problems in any organization are within the system and are the responsibility of leadership while only 15% lie with the worker • Systems are made of processes. Processes are used by workers to produce products and/or services. If the system is bad, the processes are bad and consequently service and/or product will be bad. 12
  13. 13. Leadership Review Sessions • To continuously improve an organization, Leadership must consistently meet to review performance and highlight opportunities for improvement – Some performance metrics will be reactive in nature (ex. customer satisfaction) – As much as possible, proactive measures of performance must be on the meeting agenda. Process audits are strong, proactive tools and the results of audits must be used as a performance measure. 13
  14. 14. How to Perform a Process Audit Step Four: Act on Results • Once results are reviewed, actions must be taken to improve processes • The determination of actions is also the responsibility of leadership • Audit results will present two types of opportunities: – A complete system breakdown – A process breakdown 14
  15. 15. Department A Department B Department C You conduct process audits in three different departments In process step three of department A, you find a work instruction that is not being followed In process step one of department B, you find a work instruction that is not being followed In process step four of department C, you find a work instruction that is not being followed You have solid evidence that work instructions are not being followed in the organization. You don’t necessarily have bad output as a result of it but you could. Because you see the same issue in three different departments, the system is broken. Take action now to fix this issue: Better training, Better work instructions 15
  16. 16. Department A Department B Department C You conduct process audits in three different departments In process step four of department C, you find a work instruction that is not being followed. No other instances were found of instructions not being followed. This is not a system issue but rather a process issue. 16
  17. 17. Continuously Improve Plan Audits-Make sure there is a e schedule and resources to conduct th audits op r st ve ! Ne cle cy Make sure there is a Conduct audits (on time) process in place for per the schedule Leadership to determine improvement actions Make sure a process is in place for Leadership review of results 17
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