Martin Hofmann
Carla Märkl
Increasing globalization and the rapid technological progress of recent years are influencing our economic environment and leading to ever faster change. Customers have access to new purchasing and information channels thanks to new technologies. For companies, this opens up new digital opportunities to create and distribute their products and services more quickly and efficiently.
This fast-paced progress leads to the fact that processes no longer remain constant over a longer period of time and have to be continuously questioned. Companies that can consistently improve their business processes and respond to changing customer needs have a decisive competitive advantage over their competitors. This is one of the reasons why various methods of process optimization are becoming more and more widespread. This blogpost provides an overview of these process optimization methods.
premises and framework conditions.
In order to operate successful improvement management with a focus on the continuous optimization of processes, the appropriate requirements and framework conditions first need to be created, and a sustainable improvement culture has to be established. These are:
The most important requirement for the success of improvement management is a sustainable anchoring and active living of a cooperative corporate culture. This includes all values, norms, and attitudes that shape the decisions, actions, and daily behavior of the members of the entire company. It is also crucial that these values, norms, and attitudes are actively lived out and called for by the management.
To optimize existing work processes and make them more efficient, stable, and standardized process documentation is necessary beforehand. This provides the starting point for implementing improvements. A key success factor here is determining process quality by means of key performance indicators. For example, visual dashboards from Peakboard can be used for this purpose, which highlight irregularities in a simple and understandable way.
Continuous improvement of work processes without the involvement of employees is doomed to failure from the outset. The employees who take care of the day-to-day activities know the existing problems best and are aware of the difficulties in everyday work. It is crucial to create suitable platforms that promote exchange between all those involved and create the framework for change.
methods of process optimization.
The first systematic steps toward making production processes more efficient were taken as early as the late 19th century. The engineer Frederick Winslow Taylor developed a system that focused strongly on the standardization of work processes and the general conditions required to achieve this. The introduction of assembly-line production in 1913 made Henry Ford the first to implement the approach on a large scale, pursuing the goal of producing an affordable car for everyone. Since then, various methods have been developed, all of which focus on optimizing workflows. Here is a compilation of the most important methods:
Kaizen: Taiichi Ohno worked as an engineer and production manager at Toyota in Japan after the Second World War. He further developed Henry Ford’s concept and integrated it systematically into Toyota’s corporate philosophy. “Kai” in Japanese means change/transformation and “Zen” means for the better, thus “Kaizen” means change for the better.
The Six Sigma method was developed in the USA by Bill Smith, an engineer, and scientist at Motorola, during the 1990s. This method relies on a distinctive mathematical approach and the statistical measurement of data to evaluate the performance of production processes and their outputs. The processing and implementation of improvement projects, which are targeted according to the Six Sigma method, take place within the framework of improvement projects. This involves the employees involved in the process under the guidance of trained Six Sigma experts.
The business reengineering approach was also developed in the USA in the 1990s. Unlike continuous improvement methods, this is not about optimizing existing work processes. The focus is on the radical restructuring of the essential business processes, including the established corporate organization. When it comes to business reengineering, the question is how the work ahead can be organized most efficiently in view of today’s market requirements and the latest technological possibilities. Information technology plays a central role in this.
Rather than being an improvement method in the actual sense, the agile approach is a holistic management philosophy. The focus is on the wishes of the customers, which are to be implemented quickly and to a high standard of quality thanks to a lean, dynamic organization and short internal decision-making lines. Its origins come from software development and is based on the Agile Manifesto with twelve fundamental principles. The implementation of projects according to the agile approach takes place, for example, using the Scrum method. Here, the Scrum team takes the center stage and works through the individual work packages of the project in so-called sprints.
tools for process optimization.
Various tools are used to support the implementation of the improvement projects. All of these tools are based on a strong visual component with the goal of making “data, numbers, facts” visible and are ideally suited for use in workshops with groups. Here are two representative examples:
The spaghetti diagram is used to capture and visualize the resulting trips and transports in a simple way. The completed display shows how often the observed employees head for a certain place and what walking distances they cover within the observation period. Additionally, the spaghetti diagram can be used as a representation of material flows in production. It allows the paths of the material to be recorded and improvements to the layout to increase throughput times to be made visible.
Process mapping is a tool for visually displaying an existing workflow as well as for determining existing areas of activity. The individual work steps are assigned to the roles involved (persons or departments). Responsibilities and errors can be shown transparently in this representation. Process mapping is also known in slightly different forms by other names such as process flow diagram, value flow analysis, or swim lane mapping.
establishing the optimizations using visualization.
A decisive factor for the long-term effectiveness of the improvements is to ensure that the adjustments are anchored in the processes and that they are monitored on an ongoing basis. This can be ensured as follows:
- Checking the lasting effect of the optimizations made together with the employees involved around 4 weeks after completing the improvement project.
- Establish KPIs (Key Performance Indicators) to measure process quality.
- Tracking of the defined KPIs to quickly detect irregularities in the production process. Here, Peakboard's dashboards help to make the data visually visible directly in production and to make the employees involved aware.
practical tips.
Successful implementation of an improvement project starts with precise preparation and an accurate description of the existing problem. Here are a few tips to support you in your daily work:
- Clearly outline the improvement before the workshop. Otherwise, there is a risk of endless discussions and getting lost in the shuffle. Rather tackle several small topics separately, instead of one big topic at a time.
- Even if certain optimizations already seem clear at the beginning of the workshop, it is important not to skip any steps in the processing. Doing so prevents that rash measures are taken and essential fields of action are overlooked.
- After the optimizations have been introduced, it is important to check their effectiveness and make adjustments if necessary.
make processes visible and optimize them with dashboards.
With Peakboard, process-relevant key figures are displayed in the right light on individual dashboards in a visually appealing and comprehensible manner. This gives all employees exactly the information they need to make informed decisions and act on any disruptions in the ongoing process.
Peakboard’s interactivity also allows users to engage directly with the visualization via a touchscreen. In addition to a self-determined way of working, this also has the advantage for workers that the work progress can be transferred directly to the system without a media break. This saves time and reduces the risk of errors. The templates provide you with the necessary inspiration for your first dashboard.
Author: Martin Hofman
Text and illustrations are based on the book A Holistic Approach to Process Optimization by Martin Hofmann, published by Springer Verlag in 2020. If you would like to explore the topic further, you will find detailed information with many tools and concrete practical examples in the book.
Martin Hofmann is an expert in accounting and controlling and completed an MBA with a specialization in controlling and consulting, as well as training as a Six Sigma Green Belt. He has several years of experience in process management and as a leader of improvement projects.
