Process Improvement & Management Process Mapping 4 4/17/2017 Process Improvement & Management Week 2 1

Process for a NYC police officer to fix a flat tire 1. Officer fills out a Tire Replacement Request (TRR) form. 2. Tire Integrity Unit reviews the TRR. 3. Officer picks up tire at an approved vehicle maintenance facility. 4. City approved vendor replaces tire. 5. Used tire is returned to the police garage. 6. Precinct commander signs off on TRR. 7. Tire Integrity Unit compares original and signed TRR forms and files them.

Questions to ask about that process? Why is the operation done this way? Who is the customer(s)? What does the customer need? Where is each operation conducted? Proximity? When is each operation performed? How did it evolve to this? Appropriate measures for monitoring this process? 3

Process Improvement & Management Methodology Process Definition & Assessment: Understand and define a process, Process Analysis: Get a detailed understanding of the process and generate an improvement plan, Process Implementation: Implement improvements and gain feedback

1. Process Definition & Assessment Identify: ownership & purpose/objectives, scope and boundaries, external customers, their requirements, and outputs they receive (current performance), internal customers, their requirements, and outputs they receive (current performance) suppliers and inputs available. What are the key metrics for the process and what step(s) need the most improvement?

2. Process Analysis (via Mapping) Detail steps of the process. For each step: Who are the customers? What are the inputs? What is the transformation? What are the outputs? Identify the trouble spots Is a particular step creating the overall low performance measurement for the process? Is a step “adding value” ? If not eliminate or improve, benchmark against “best practices”. Find supporting evidence, brainstorm and developing improvement plan.

3. Process Implementation 1) Implement improvement on a pilot basis if appropriate 2) Feedback how is it working 3) Revise if necessary 4) Apply system-wide 5) Return to step 2.

Process Mapping 8

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Process Mapping Purpose 4/17/2017 Process Mapping Purpose Improve existing or design new process First step for analyzing and improving processes Simple to construct Simple to understand Visual descriptive tool backed up by a process chart with more detailed data 11

Types of maps All maps start with the basic process flow map Blueprint typically used to: Determine points prone to errors and develop mistake –proofing mechanisms Differentiate between processes which interact with the customer and those which happen “behind the scenes”. Value Stream Map typically used to: Examine resource & value of each step from a customer’s perspective Assess valuable resource use at each step Elements of different maps can be combined depending on the goal 12

Other areas to analyze with maps Process Mapping 4 4/17/2017 Other areas to analyze with maps Find repetitive operations Identify potential bottlenecks Describe directions and distances of flows (people, material and information) Look at resource use and minimums Create better value & reduce waste 13 13

Blockbuster Process Flow Map “Check out process”

Starbucks Blueprint Map Line of Visibility Take Drink Order Collect Payment Deliver Drink Make Drink Order Supplies Prepare Mixes Materials (Coffee, flavors, milk, cups, etc.) Fail Point Not seen by customer Seen by customer

Car Repair Blueprint Service visible to customer Process Mapping 4 Car Repair Blueprint 4/17/2017 * = Points critical to the success of the service † = Points at which failure is most often experienced Service visible to customer Service not visible to customer Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* Customer departs with car Collect payment Notify customer Check parts availability† Perform work† Parts available Order parts Inspect/ test and repair Perform corrected work Corrective work necessary Repair not authorized Repair complete Parts not available Repair authorized 16

Getting Started with a map Basic steps are: Identify the entity that will serve as your focal point: Customer? Order, item, proposal, policy, or similar concept that passes through a series of process steps. Identify clear boundaries, starting and ending points, and lines of demarcation between customer, order, and other relevant information flows. Keep it simple Does this detail add any insight? Do we need to map every exception condition? 17

Typical Mapping Symbols or Operation (task or work activity) Inspection Decision point (typically requires a “yes” or “no”) Document or order created Delay Storage Transportation: Move Materials, customers or employees 18

Value-stream Map symbols Identifies improvement opportunity Shipment External Source (suppliers & Customers) Process Process Resource Descriptor Inputs Outputs 19

Start Big: Look at the major process steps (example here is a Value Stream Map) 20

Comparing Usage to Needs Visually (bottom of map) 2. Identify a key resource that you would like to track (labor, value-add time, energy, water, etc.) Comparing Usage to Needs Visually (bottom of map) 21

Example: Water used versus needed 22

3. Focus on an opportunity area for improvement or Innovation for new concept developers 23

4. Create a process map focusing specifically on that opportunity area 24

5. Visualize an improved “Future State” for the opportunity areas (brainstorm about how to do things differently) 25

Business Non-value-add (BNVA) Non-value-add (NVA) Value add Lens: Distinguish between Value-Add and Non Value-Add Process Step Value Add (VA) Business Non-value-add (BNVA) Non-value-add (NVA) 26

Value Add Steps Work that contributes to what your customers want out of your product or service Analysis of asset value Annuity calculations Comparison of rates and benefits Does it meet these criteria? Adds a desired function, form, or feature to the product or service Enables a competitive advantage (reduced price, faster delivery, better quality) Includes activities that a customer would be willing to pay. 27

Business Non-Value Add Activities that your customer doesn’t want to pay for (it does not increase value in their eyes) but are required for some reason Accounting, legal, regulatory Is task required by law or regulation? Does task reduce financial/liability risk? Does task support financial requirements? Does process break down if task is removed? 28

Non-value Add Work that does not add value in the eyes of the customer and they would not want to pay for it (nor is it required for BNVA) Rework, multiple signatures & copies, counting, handling, inspecting, set-up, downtime, transporting, moving, delaying, storage. 29

Non-Value Adding Activities (continued) These activities increase the process time significantly. NVA consume 95% of process time in many businesses. Differentiate between: Non-Value-Adding But Necessary activities (set-up and some inspections) Waste Consumes resources Does not increase value (inspections, moves, storage, and delays)

Retail Banking Processes Time required to open a checking account with a $500 cashier’s check and no prior banking relationship Activity time: total time for activity (minutes) Customer time: customer’s time in activity (minutes) Activity time Customer time Best Bank 27 24 Average 54 42 Worst Bank 70 59 Worst 20 Banks >=60 >=48 – 124 U.S. bank study (Frei and Harker)

Process Chart (supplements & helps support Map) Measure A B Activity (O, I, S, D, TP, TI) Value Code (V/B/N) Description of activity O= operations; I= inspections; S= storage; D=delay; TP= transportation of people TI= transportation of inventory or materials 32

Linking Processes to Value with Metrics (i.e. measures A and B) Possible Measures or Metrics: Link desired customer value to process Time (measure distance traveled and task time) Cost Quality Flexibility Sustainability metrics Set standards Guide design of new or redesign of existing process 33

Types of Measures (typical) Description Quality Key product or service characteristic of interest to you and your customer: mistakes, failures, complaints, returned items, repairs, time, etc. Material Materials that go into the product or service at different steps: components, paper, solvent, resin, paints, books, lots, water, etc. Cost Time, expenses, labor at each step Delivery Things that impact delivery of the product or services to your customer: instructions, shortages, defaults in payment, delays or wait time. Energy Resources KWH or BTUs, miles per gallon, et. 34

Other Measures Measure Description Safety Accidents, mistakes, breakdowns Courtesy Politeness, respect, consideration, friendliness Accessibility Ease of access and ease of contact Understanding Finding out the needs, expectations, and satisfaction level of the customers Responsiveness Willingness to help and provide prompt service Innovation Number of Radical ,Incremental, etc. new products introduced Local content Materials or labor content in process step produced in regions of importance. 35

Example including Time & Quality Measures 36

Typical causes of Poor Process Performance Problems with Products/Design Difficulties observed with the process Problems with Metrics Problems with Process Problems with Customers/Mix

Mapping Exercise can lead to Potential Changes: Process Mapping 4 4/17/2017 Mapping Exercise can lead to Potential Changes: Raw materials Product (output) design Job design Processing steps used Management control information Equipment or tools Suppliers i.e. Anything but customers may be changed unless they do not add value!! 38 38

Questions to ask to improve process What does the customer need?, operations are necessary? Can some operations be eliminated, combined, or simplified? Can the product be redesigned to address an issue?... Who is performing the job? Can the operation be redesigned to use labor better? Can operations be combined to enrich jobs? …. Where is each operation conducted? Can layout or proximity be changed to improve communication? When is each operation performed? Is there excessive delay or storage? Are some operations creating bottlenecks? ….. How and Why is the operation done? Can better methods, procedures, or equipment be used? Can we reduce resources ? 39

In Class Mapping Exercise (Team): Do an overall map of the process for either Producing shoes or apparel (Nike article) Getting an oil change from a “quick” provider Participating in an inefficient service that you know all too well. Start with major function steps and decide on 2 appropriate metrics. Pick one of the major steps, explode it Evaluate value-adding and non-value adding activities (V,B,N). Justify your decision. How would you modify non-value added activities that do not align your mission Show the opportunity areas for changes & potential innovations that get will improve performance. 40