Introduction To Operational ExcellencePresentation Transcript
Operational Excellence Business Process Management & Continuous Improvement Ahmed Mansour, MD ImproVision Consulting
Background. The Continuous Improvement Model. Managing Business Processes: Methodology. Identifying Opportunities. Improvement Approach. Tools and Solutions. Role of People in Continuous Improvement Contents
Economic Crisis limited Revenues growth opportunities, must focus on Cost Efficiency to sustain profits. Background Revenue Cost Profit 2008 2009 2008 2009 Crisis Growth Opportunity Traditional Growth Model
Need to survive growing, fierce Global competition.
Reducing risks and improving product / Service quality key to sustain success with Customers, Authorities and Investors.
Businesses Process Management provides tools to meet these challenges, through the identification of Continuous Operational Improvement Opportunities.
Key Concepts of Continuous Improvement Doing the Right Things Customer Focus Doing Things Right Work Process Improvement Continuous Measurement Fact-based Supportive Work Environment Involving Everyone in making it happen
What is Six Sigma? Six Sigma is a business process improvement approach that seeks to find and eliminate the causes of mistakes or defects that occur in business processes. Six Sigma integrates the tools of systems engineering, process thinking, statistical methods and business analysis in a rigorous approach to focus on problems that are of critical importance to customers. Outcomes of Six Sigma include enhanced process performance, improved customer satisfaction, and increased financial results. Six Sigma has been proven at respected companies across a variety of processes, functions, products, and industries. Six Sigma integrates both human and process approaches to business improvement, provides a clear focus on delivering bottom-line results, and applies a systematic, sequential use of quality improvement and statistical tools in an overall approach that finds and eliminates the root cause of problems.
What is Six Sigma? Business Statistics Process Systems Quality Change Mgt Six Sigma Approach Improved Financial Results Enhanced Processes Satisfied Customers Zero Defects Reduced Bottlenecks
Key Success factors Processes VISION People Systems …Link People, to Systems, using Processes to achieve Visions!
Business Objectives Ensure Alignment / Control Standardize Organization Processes, Policies and Procedures and ensure common understanding among all employees. Provide a consistent performance, measurement and evaluation system. Simplify Administrative work Establish comprehensive and sound Roles and Responsibilities. Minimize effort / time in retrieving needed reference material. Improve Visibility and Decision Making Improve Management ability to proactively control operation. Provide consistent and continuously improving Performance. Discover Areas for Improvement Assess fit of current Model for Organization Strategies and Industry Best Practices and identify areas for improvement.
Improvement Methodology Improve Define Measure Analyze Control D C I A M Customers for your products or services identified Customer requirements defined Work process defined Baseline performance measured Improvement opportunity identified or confirmed (in $ terms) Root causes of gaps verified Solution implemented Benefits captured Procedures and practices in place to ensure sustained process performance Deliverable Characterization Optimization Sustainment Key focus: 1. Measurable and demonstrable bottom-line results 2. Higher customer satisfaction 3. Data driven decision making
The CI Funnel Approach D M A I C Improve Define Measure Analyze Control
Gate 1 Gate 2 Gate 3 Gate 5 Gate Process – Analogy with house build Define Improve Measure / Analyze Control DMAIC Planning Design Develop Close out Definition Gate 4 How big is the problem ? Develop the specification. First view of potential solutions A detailed plan is developed. Costs and benefits. Roles and responsibilities Are we ready to go ? All detailed instructions/ procedures should be ready Is there a need ? Why ? Understand the requirements Did we deliver what was required ? I want a house. Initial ideas - 4 bedrooms, 3 reception rooms, 3 bathrooms Contractors engaged, detailed design of all rooms and facilities - costs and timings developed House is built, ready to move in. Is it sufficiently ready for me to move in ? Is the house exactly what I planned? Did it meet all my requirements ? Happy or sad ? First ideas of potential options for my house – preliminary costs Stage 2 Stage 3 Stage 5 Stage 4 Stage 1 PLC
Applying the Model General Management Operational Six Sigma Transactional Six Sigma Supply Chain Operations & Logistics Marketing & Sales Business Support Marketing / Brand Sourcing Production Finance & Accounting Purchasing Quality Control Sales HR Cost Control Warehousing Customer Service General Administration Contract Management Distribution
Production Process Example Production Cycle
Identifying Opportunities Focusing on key opportunities … “The 80/20 Rule” Example: Cost of Production= Raw Materials+ Additives + Electricity + Electrical items + Mechanical items + Fuels + Lubricants.
Improvement Approach Significant Production Cost Reduction can be achieved by controlling Raw Material Consumption People Material Ignorance Quality Handling Warehousing Excess Material Speed Pressure Cleanliness Processing Equipment Methods
Performance Improvement Decision: Increase Call Centre staff by one person Performance Improvement: Call Centre Bottleneck Resolved Customer Service Process Example PROCESS INTELLIGENCE - PREDICTIVE BUSINESS PROCESS ANALYSIS SOLUTIONS Process Modelling and Simulation Process Design Engine Collaboration Engine Simulation Engine 015 120 120 075 Customer requests flow through applications. The End to End business process consists of events from many applications. The process can be optimized using Modelling and Simulation of the real process data. PRODUCTION PROCESSES Applications, Technology & Resources Events are generated by the applications. BPM System extracts these events and transforms them into Process Intelligence data. Modelling to Execution BPMN Lite Modelling Operational Dashboard BPM Workflow Legacy Application Call Centre ERM ERP BPM Systems enable continuous process improvement and support Lean Six Sigma initiatives. Simulation of Production Process Measure Process Analysis Engine Reporting BPMN Model PROCESS INTELLIGENCE - REAL TIME & HISTORIC
Engaging People in BPM initiatives Processes are executed by People, they will make or break any BPM initiative. Roles and Responsibilities may be changed significantly by Process Re-engineering. Involvement, Buy-in & Empowerment of People is a key success factor. Proper Change Management plans must be part of any successful Project. Phase 1 Phase 2 Phase 3 Re-trusting Per formance Excited Shock Hopeful/ Skeptical Denial Anger Relief Fear Impatience Anxiety Acceptance Confusion Undirected Energy Time
… In a Nutshell Cost Control is the answer to Profitability under severe Revenue growth limitations. Savings can be made by applying a “DMAIC” approach across all Process areas, to continuously identify opportunities for improvement. Significant Cost reduction can be achieved by focusing on the “right” performance issues (80/20). BPM System Solutions offer “Enablers” to achieve strategic goals. Organization Change Management determines the success of any BPM initiative. Operational Excellence is key to sustain competitive position for the Business in today’s economic conditions.
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