Business Process Kaizen

Transcription

1 Time Based Management Business Process Kaizen Why focus on Business Process Improvement LeanSigma, The Perfect Engine, LeanStrategy, and the TBM Consulting Group logo are registered trademarks of TBM Consulting Group Inc.

2 Module Objectives At the end of this module, you will be able to Describe what a business process is Explain what is different about a business process from a manufacturing process List the benefits of business process improvement 1-2

3 Agenda What is a business process What is different about a business process Why focus on business process improvement Typical results 1-3

4 Business Process Kaizen What is a Business Process? Recurrent, often non-standard activities Impacts core capabilities Involves coordination or sequencing (cross-functional process in very functional organizations) Typically those involved in processes have less experience with change 1-4

5 Business Process Improvement Typical Business Processes Claims Processing Quotation Process New account set-up Cash Application New Policy Administration Product Development Financial Reporting Inbound Call Support Accounts Receivable 1-5

6 What s Different About A Business Process Same mandate as manufacturing: Reduce costs Increase efficiency Improve quality, delivery and customer satisfaction Harder to visualize than manufacturing processes and waste may not be as obvious People are not as used to making change and being measured Functional organizations or Silo s 1-6

7 Two Types of Business Processes Business Processes tend to fall into two categories based upon their frequency (Takt Time) and length of time to complete: High Transactional Low Transactional Order Entry New product design Calls in a call center Month end close The sequence of improvement tools used may vary, but the focus will always be on Value Added & Waste Elimination 1-7

8 Why Focus on Business Processes For Companies that have reduced their manufacturing lead time business process lead time is now a greater issue Baseline Lead Time 30 Days 10 Days Original Lead Time After Manufacturing Improvement 10 Days 10 Days After Business Process Improvements Significant Improvement 10 Days 2 Major Improvement Manufacturing Business Process 1-8

9 Why Focus on Business Processes For Companies that have only business processes, such as service companies: Baseline Lead Time 40 Days Original Lead Time After Business Process Improvements 10 Days 10 Days Major Improvement Business Process Speed Will Give You a Competitive Edge to Grow Your Business and Margins 1-9

10 Why Focus on Business Processes Name some companies or services that have focused on speed In banking processes Shipping carriers Internet companies Restaurants Other How has that changed their value in the eyes of their customers? Speed Will Give You the Ability to Grow Margin 1-10

11 Sample Gains Function Business/ Process Lead Time Reduction Productivity Improvement Other Gains Design Engineering Sales & Contracts Accounting Order Entry Custom Buildings New Customer Set Up Month End Close Manufacture of Commerical Products 16 days to 5.5 days 38% Claims reduced from $6.61 to $0.51/thousand 90 days to 49 days 65% Revenue increase of 3.1 mill. EBIT increase of 1.7 mill 11 days to 5 days Handoffs reduced from 73 to 18 8 hours to 2 hours 40% Eliminated 6 forms and logs. Distance travelled reduced from 2448 to

12 LeanSigma Transformation Results Increased revenue opportunities (net sales) Productivity (revenue per employer Quality Improvement (rework) Lead Time (backlog) 15% per year 25% per year 50% per year 50% from existing process 1-12

13 Summary The application of Lean Principles in Business Processes will: Reduce lead time Improve quality Increase productivity Enable you to grow the business without additional resources Make people s jobs easier Improve profitability 1-13