Processes: An Important Aspect of Business Growth
January 22, 2019
Businesses of any size need constant improvements in operating processes to ensure efficiency and growth. A process can be one activity or a series of activities designed and intended to accomplish certain business goals. These activities might have several different types of inputs such as time, money, people, equipment, etc. The inputs combined with the process for the activity itself will produce some type of desired output, such as a product or service, a customer invoice, an employee paycheck, etc.
The main goal of process improvements is to improve profitability, productivity, or enhancing the customer experience. Processes may need to be improved for the following reasons:
(1) So a process is standardized (doing it the same way all the time) improving efficiencies and outcomes.
(2) Provide consistency for customers (getting the same quality each time a purchase is made).
(3) Remove bottlenecks (slows a company’s ability to deliver products and services on time).
(4) Reduce errors (increases efficiency, profitability, and customer satisfaction).
(5) Reduce complexity (eliminates redundant or unnecessarily complex aspects).
(6) Meet needs of new systems (generally requires a modification to current business processes).
Steps to Improvement
The “process” of process improvement cannot be haphazard. The steps that should normally be followed are:
(1) Examine areas for change (areas not performing as well as expected).
(2) Prioritize (which areas are potentially damaging to the business at the immediate time and what effect the change can possibly have on customers, employees, and profitability).
(3) Decide what needs to change (zero in on areas that consistently have poor operating results or error issues).
(4) Document and initiate process changes (make changes understandable by all employees involved and monitor to make sure the changes produce the desired results).
One critical component of process improvement is measurement; otherwise, there is no way to determine if the improvement is successful or not. Deciding on what a business measures depends on what processes should be improved. Examples of possible measurements might be:
(1) Measure the number of returns
(2) Reduce time from production to market
(3) Lower cost of operations
(4) Reduce inventory
(5) Reduce waste
(6) Improve productivity
(7) Improve profits
(8) Reduce accidents
(9) Reduce billing errors
(10) Increase rate of securing new customers
(11) Reduce customer complaints
The list of measurements can be quite endless depending on the needed changes. It is important to understand that the goal for monitoring success is essential to know whether a particular process improvement was effective or not.
Process improvements can be a small or large undertaking depending on the number and scope of activities. The various improvements can take little time or be quite time consuming. The transformational effect, however, can have very positive results on the overall business if the right processes are targeted for improvement and implemented correctly.
With only so much time and energy allotted to each day, it is important to prioritize on what will be most beneficial for a business. Staying focused is the key. Process improvements should be prioritized that will yield the best results for a business in the shortest possible time with the least business interruption and cost. Process improvements are an important aspect of business growth.