What is Process Improvement in Businesses?

Also known as Continuous Improvement Process (CIP), Business Process Improvement (BPI) is a constant process of identifying, analysing and improving existing processes within your business.

BPI is used with the purpose of meeting the organisation’s growing or changing goals by

  • minimising errors,
  • reducing waste,
  • improving productivity and
  • streamlining efficiency.

Why Process Improvement is Important

Boosts Productivity and Streamlines Workflow

Process improvement can help to identify obstacles and repetitive tasks which can be automated.

Furthermore, integrating work processes across all functions will make performance measurement much easier with less risk of human errors.

Reduces Operating Costs and Wastage

By improving work processes, you’ll be better equipped with accurate and reliable data. In return, knowing the exact costs and time involved to complete a body of work will help to reduce any unnecessary costs and wastage.

Process Improvement Method: PDCA

One of the most straightforward process improvement techniques is the PDCA framework. It effectively identifies possible improvements for implementation.

PDCA is a repeatable cycle that comprises 4 main steps.

Step 1: Plan

The first step begins with you identifying the problem and changes you’re planning to make. This can be done by using process mapping and problem-solving tools.

Process mapping tools

  • Determines which part of the process works or doesn’t work well

Examples of such tools include audit development and Standard Operating Procedure (SOP) documentation.

Problem-solving tools

  • Points out the root cause of the problem you’ve identified to come up with a solution

An example of a tool would be the cause-and-effect analysis.
It’s also a good idea to bring in external help and experts to provide insights as their experience can save you additional time and resources.

Step 2: Do

Next, you can start testing the improved process on a small scale. If your organisation is medium to large-sized, you should test the solution on a sub-division first.

Step 3: Check

While analysing the effectiveness of your implementation, it’s important to note that a short-term positive result may not be sustainable.

For example, an increase in output may result in a compromise in other areas (e.g. increase in defect rates).

Therefore, do continue to monitor the effectiveness of the new implementation(s) by comparing results against the previous process before moving on to the next step.

Step 4: Act

You can start enforcing this new implementation company-wide when it has been proven to show favourable results.

PDCA is designed to be a repeatable process. Hence, you can duplicate the same framework to rectify any other issues that your business is facing.

 

Business Process Improvement VS Business Process Transformation

Business Process Improvement is an ongoing process that aims to improve efficiency through continuous refinement of existing processes. It’s used to remove existing problems and obstacles in the workflow to reduce waste.

On the other hand, Business Process Transformation seeks to redesign the entire process from scratch by focusing on the desired result.

Although introducing radical changes in the operation strategy requires careful planning and experience, it gives your business a more significant competitive advantage.

Looking to transform your business process? Consult our team at Astreem today!

Process Improvement Tools

1. Audit Development

An audit system provides a clear overview of all financial records and documentation.

Benefits:

  • Clear reporting

Provides stakeholders with a much clearer understanding of the health of the company

  • Maintains and improves profitability

Steers your company to improve business processes to maximise profitability

2. SOP Documentation

SOP documentation provides employees with step-by-step guidelines for work processes.

It can be in the form of checklists, flowcharts, videos or images among other mediums.

Benefits:

  • More accurate employee performance measurement
  • Reduced training costs
  • Ensures consistency in workflow processes

3. Cause and Effect Analysis

A cause-and-effect analysis provides a structure for assessing each problem by exploring all of its possible causes.

This can be done in 3 simple steps:

  1. Identify a problem you want to solve.
  2. Explore all possible causes of this problem.
  3. Evaluate and come up with possible solutions for each of the causes.

Benefits:

  • Identifies areas of improvement relatively quickly through the visual representation of each effect and their causes

4. 5 Whys Analysis

The 5 Whys analysis is a theoretical variation of the cause-and-effect analysis, used to resolve simple to moderately difficult problems.

It’s a deductive process that involves a discussion with your team and asking a series of 5 whys after a problem is identified.

Here’s an example:

Q: Why did sales drop this quarter? A: The team didn’t close as many leads in recent months.
Q: Why? A: Recent leads are of lower quality.
Q: Why? A: The marketing team has recently switched to a new lead generation partner.
Q: Why? A: The finance department deemed the previous partner unsuitable.
Q: Why? A: The previous partner increased their rates substantially.

After completing the analysis, you’ll be presented with better insights and multiple ways to rectify the problem.

In this scenario, your team can analyse if the increase in rates of the previous partner is justified or if it’s better to engage other partners.

Benefits:

  • Identifies the root cause of the problem efficiently
  • Doesn’t require statistical analysis

Use Efficient Process Management Tools

On top of using process improvement tools, businesses can also complement their strategy by incorporating process management tools to improve their operations.

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Some examples are:

  • Daily checklists and processes can be developed to enhance team collaboration and productivity
  • Processes can be automated to reduce manual work and human error

These process management tools help to streamline workflow and operations.

Furthermore, embedding automation triggers next step functions either via email, alerts or integrations to help managers stay on top of what’s important.

Identify Opportunities to Improve Your Business Process Today

Today, business improvement can range from improving linear processes to complete company-wide business transformation.

The extent to which digitisation is adopted depends largely on

  • the opportunities for improvement,
  • the expectations of profit improvement and
  • the readiness of the team to embrace the adoption of technology.

With some professional assistance, both in terms of business and mindset transformation, you’ll be able to get through the transformation process effectively and efficiently to scale your business with the help of an expert.

In countries like Singapore where digitisation is a priority, the government offers financial assistance for approved projects (up to 70% of consultancy fees) to encourage businesses to go digital.

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All businesses have different requirements and pain points. Consider engaging a business growth consultancy  or a business transformation expert as they can help you identify critical problems and solutions to help improve your business profitability quickly.