April 27, 2017

Ensure 100% Quality at the Beginning of a Process

IT folks know this expression very well: “Garbage in, garbage out.” Same holds true for a process. If you allow errors, mistakes, and missing information at the beginning of the process, the cost of fixing it grows exponentially as the item moves downstream.

How can we apply this principle? One method is to install a gate at the beginning of the process. The gate can take the form of a review where the item is checked for completeness and accuracy. If it is not complete nor accurate, then it can not pass to the next step. The person reviewing can work with the supplier to fix the problem so it can then be accepted. How often do things get accepted in your organization, only to find out later there was something wrong with them? Then how much time, effort, and expense is consumed by trying to fix the problem? If we only spent the time up front, then the downstream issues would disappear. There are some places in a process where it makes lots of sense to invest time, resources and money. One of these places is the front end of a process.

Another option is with dedicated fields in software programs. If a particular data field has incomplete or wrong information, the field is flagged. Shoppers know this first hand by going to Amazon or other web merchants. Your order does not get accepted unless all of the information is complete and accurate.

If the quality problem is extensive, you should gather data on the frequency of occurrences by category. This data can be illustrated by a Pareto Diagram, which shows which item is most frequent in a descending order. See the example below.

Lastly, you will want to track how often the incoming information is correct. The graph below is a run chart of information coming from the sales force. This graph shows the percentage of correct information on a monthy basis.

 

 Fix the front end of the process first. Everyone downstream will be ecstatic. And your quality costs will plummet.

Contact us at Value Creation Partners to learn more.

Design your process around value-adding activities

The most important design principle is “Design you process around value-adding activities, not departments, job titles, or personalities.” To understand this principle, we first need to know what a value-adding activity would be. A value-adding activity can have any of these three characteristics:

  • It transforms information or material into what the customer wants
  • It is a service feature
  • It is a step the customer would pay for.

Here the steps in green are value-added steps.

After you have created an “as is” flow chart of your process, go back and identify those steps which are value-adding. I usually change these steps to green. Why green? Because money is green. Now look at your process and see how many steps are green. Probably not very many. Nirvana would be a process that would be pure green.

If you are working in an environment of turf protection, strong personalities, and issues about who should do what, then I suggest you do not initially make a functional-activity flow chart for your new process. Instead focus on creating the flow, the sequence of the steps, and optimizing around the value-adding steps. This will allow you to create a great process and not be derailed by arguments about turf, etc.

After you have hammered out a great flow, then put on the boxing gloves and figure out who should do each step. This where the second design principle is used. “Work is performed where is makes the most sense.” Does it make more sense for sales or marketing to do this work? Should the admin do this step or the manager? By keeping these discussions after you have the new flow, you will speed up your efforts significantly.

There is another school of thought in the process improvement community. This school wants you to focus on the non-value added steps and eliminate them or reduce then. I tried this technique once and this is what happened. The folks who were doing the non-value added steps argued with me that these steps were necessary. Secondly, it created a hostile and contentious atmosphere. Third, those folks are probably afraid they will loose their job since they are doing non-value work.

The above is completely circumvented by focusing on value-adding activities and trying to optimize those. By doing that, guess what happens? The non-value adding steps fall away, and you have avoided an unpleasant interaction with many people.

Future posts will highlight other design principles which I commonly use with clients. In addition I plan to write about creating value in processes when we redesign them.

Check us out at Value Creation Partners.