Streamlined Process Improvement

Streamlined Process Improvement

by H. James Harrington

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Product Details

ISBN-13: 9780071768634
Publisher: McGraw-Hill Professional Publishing
Publication date: 07/19/2011
Pages: 432
Sales rank: 894,317
Product dimensions: 6.40(w) x 9.10(h) x 1.60(d)

About the Author

H. James Harrington, Ph.D., is CEO of the Harrington Institute, an international consulting firm providing a full range of services, including management, technology, education, e-learning, and knowledge solutions. He serves on the board of directors of a number of national and international companies and is a former president of the American Society for Quality (ASQ) and the International Academy for Quality (IAQ). He has authored more than 35 books, including Business Process Improvement, and developed 11 software packages. He writes columns for Quality Review, Cost Management, TQM Magazine, and News for a Change. He was named an ambassador of goodwill by former President Clinton.

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STREAMLINED PROCESS IMPROVEMENT

The Breakthrough Strategy to Reduce Costs, Improve Quality, Increase Customer Satisfaction, and Boost Profits


By H. JAMES HARRINGTON

The McGraw-Hill Companies, Inc.

Copyright © 2012The McGraw-Hill Companies, Inc.
All rights reserved.
ISBN: 978-0-07-177096-5


Excerpt

CHAPTER 1

Introduction to Streamlined Process Improvement (SPI)


Business Process Improvement (methodology) investigated and established by Dr. H. James Harrington and his group [represents] some of the new strategies which bring revolutionary improvement not only in [the] quality of products and services, but also [in] the business processes which yield the excellent quality of the output.

—Professor Yoshio Kondo, the leading Japanese quality authority


Introduction

We have more opportunities to improve our processes than we have problems to solve.

—H. James Harrington


This book is designed to help you streamline your processes, making them more efficient and effective. This will allow you to sell your products and services at a lower price and still make more profit than your competitors. In car design, streamlining reduces an auto's air resistance, making it operate more effectively and making it more attractive to customers. On the other hand, a lean car has only the essentials.

When you streamline your processes, they operate at lower cost and cycle time and at increased efficiency and effectiveness. (See Figure 1.1.) In addition, the resulting changes are implemented with much less resistance and greater acceptance by the management team and the employees than processes redesigned using reengineering, DMADV, or Design for Six Sigma methodologies.

Today we hear a lot about Lean Six Sigma—it is the removal of all waste from the organization. Currently, most organizations could be represented by the overweight person in Figure 1.2.

Our processes are full of bureaucracy and waste. As we run into a problem, we just add more and more bureaucracy so that the problem will not reoccur. This just wastes time and money. A Lean Six Sigma organization could be represented by the person in Figure 1.3.

As you can see, the person in the figure is very lean; all fat has been removed. People who are that thin have often gone to extremes to lose the fat and keep it off, but in doing so, they have thrown their body's meaningful checks and balances out of kilter. They have often lost their natural protection from disease (problems) and are susceptible to any and all of the diseases that come along. Toyota got into its quality and recall problems because it got too lean. The streamlined organization can be represented by the figure in Figure 1.4.

With streamlining you may start out as the person depicted in Figure 1.2, but after beginning an exercise program, you lose (remove) the waste and transform fat into muscle. You feel better, are healthier, and are more creative. You streamlined not only the processes, but also the way you think and go about doing business.


Streamlining Fundamentals

The following are the key fundamentals that must be considered when you undertake to streamline a process:

1. The process to be streamlined should be chosen based on how valuable it is to the organization, how badly the process is broken, and what the impact upon the organization would be if the process were improved.

2. It is a mistake to try to improve too many processes at the same time. Do only three or four at a time.

3. A good database that measures performance of the current process should be in place before you make changes to the process. This is necessary so that you will be able to accurately measure the impact that the future-state solution has on the organization.

4. The way to begin is to ask the question, Is the process essential to the organization?

5. Simplification is better than computerization.

6. The real value of a process is how well it interacts with the other processes.

7. The best-designed process is worthless if it is not accepted by the people who will be using it.

8. Excellent communication and trust are key elements in making the streamlined process methodology a success.

9. The executive team needs to understand and fully support the SPI methodology and the output from the Process Improvement Team (PIT).

10. The external customer is the one who defines what the output from the process needs to be.

11. The combination of the process and the internal customer requirements must provide the organization with the best overall value. Internal customers' desires may not be honored unless they add value to the organization.

12. The white-collar processes have potential for quantum improvement.

13. The processes that service the external customers should be optimized, and the others should be designed to support them.

14. The total process key measurements need to be improved, not the measurements that are related to subprocesses within the major process.

15. The key process improvement indicators are increased external customer satisfaction, reduced output costs, reduced cycle time, and increased employee morale.

16. The people who will be key players in using the process should be included in the SPI projects.

17. The risks have to be understood before any changes are made to the process.

18. Streamlining requires resources; it can't be accomplished without a budget and people assigned to it. The employees assigned to the PIT should have their workload in other areas reduced by 20 to 40 percent.

19. The variation in the cycle time and output quality should be minimized.


Technology Warning

All too often, organizations jump to automate their processes without evaluating how effective the processes can function without being automated. This is usually a major error, as technology should serve the processes, not the other way around. Frequently, technology will speed up your processes so that you are able to make more errors faster than ever before. In other words, if the process is bad, automating it just causes an automated mess. Since technology is an enabler, rather than a process driver, it should only be applied after the process is streamlined. Far too often we automate a process or use technology to expedite the process when we should be simplifying the process. Carla Paonessa, a partner at Arthur Andersen Consulting, stated: "Just automating something that should not have been done manually won't get you to be more productive. What will work is eliminating bottlenecks, reducing mistakes, focusing on customer service, and then and only then, introducing new technologies" (Henkoff, 1991).


Employment Security

Employment security is one of the most critical and complex political and economic issues facing top management as a result of implementing SPI. An SPI project very often will reduce the workforce requirements by 30 to 60 percent. We have seen it reduce the number of people required to operate the process by as much as 80 percent. Not addressing this condition up front often results in the failure of an SPI project. Employees often look at a process improvement project as a way to reduce the number of employees. How can you expect your employees to give freely of their ideas to increase your productivity and minimize waste if it means that their job or a friend's job will be eliminated? If you start a continuous improvement process and then have layoffs, what you are going to end up with is employees who are continuously trying to sabotage your improvement process.

Corporate America has been on a downsizing kick since the late 1980s; its answer to business pressure is to slim down and lay off with the hope of raising stock prices, but that does no
(Continues...)


Excerpted from STREAMLINED PROCESS IMPROVEMENT by H. JAMES HARRINGTON. Copyright © 2012 by The McGraw-Hill Companies, Inc.. Excerpted by permission of The McGraw-Hill Companies, Inc..
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Table of Contents

Acknowledgments xi

1 Introduction to Streamlined Process Improvement (SPI) 1

Introduction 1

Streamlining Fundamentals 4

Technology Warning 6

Employment Security 6

2 What Is Streamlined Process Improvement? 11

Introduction 11

What Are Business Processes? 14

Why Use SPI? 16

How Management Has Been Misled 18

Breakthrough versus Continuous Improvement 18

What SPI Is Not 21

Why Improve Your Business Processes? 21

How to Improve Your Business Processes 22

Phase I Planning for Improvement 23

Phase II Analyzing the Process 25

Phase III Streamlining the Process 25

Phase IV Implementing the New Process 32

Phase V Continuous Improvement 32

Summary 34

3 Phase I: Planning for Improvement 37

Introduction 37

Planning Phase 38

Activity 1 Define Critical Business Processes 38

Activity 2 Select Process Owners 49

Activity 3 Define Preliminary Boundaries 52

Activity 4 Form and Train the PIT 53

Activity 5 Box in the Process 60

Activity 6 Establish Measurements and Goals 62

Activity 7 Develop Project and Change Management Plans 74

Activity 8 Conduct Phase I Tollgate 87

Summary 88

4 Phase II: Analyzing the Process 91

Introduction 91

Analyze Phase 92

Activity 1 Flowchart the Process 92

Activity 2 Conduct a Benchmark Study 118

Activity 3 Conduct a Process Walk-Through 121

Activity 4 Perform a Process Cost, Cycle Time, and Output Analysis 131

Activity 5 Prepare the Simulation Model 166

Activity 6 Implement Quick Fixes 187

Activity 7 Develop a Current Culture Model 188

Activity 8 Conduct Phase II Tollgate 189

Summary 190

5 Phase III: Streamlining the Process 191

Introduction 191

Streamlining Phase 194

Activity 1 Apply Streamlining Approaches 194

Activity 2 Conduct a Benchmarking Study 292

Activity 3 Prepare an Improvement, Cost, and Risk Analysis 293

Activity 4 Select a Preferred Process 295

Activity 5 Prepare a Preliminary Implementation Plan 296

Activity 6 Conduct Phase III Tollgate 298

Summary 298

6 Phase IV: Implementing the New Process and Phase V: Continuous Improvement 301

Introduction 301

Phase IV: Implementing the New Process 301

Activity 1 Prepare the Final Implementation Plan 302

Activity 2 Install the New Process 306

Activity 3 Install In-Process Measurement Systems 306

Activity 4 Install Feedback Data Systems 309

Activity 5 Transfer the Project 309

Activity 6 Conduct Phase IV Tollgate 312

Phase V: Continuous Improvement 313

Activity 1 Maintain the Gains 315

Activity 2 Implement Area Activity Analysis 316

Activity 3 Qualify the Process 317

Does SPI Work? 322

Summary 324

Appendix A Typical Business Processes Where SPI Can Be Applied 327

Appendix B Process Walk-Through Questionnaire 331

Appendix C Some Process Simulation Tool Suppliers 343

Appendix D Definitions 345

Appendix E Other Simulation Symbols 353

Appendix F Typical Government Processes 355

Appendix G Nonmanufacturing Typical Processes Measurements 358

Appendix H HU Diagrams 373

References 391

Bibliography 395

Index 397

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