Process Optimization Sharing

1. Process Optimization Sharing
Nguyen Hoanh Tien
March 16th, 2017
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2. Agenda
• What is Process Optimization
• Process can’t be Optimized Alone
• What Breaks Processes and Strategies to
Optimize Processes
• Process KPIs and Measurement System
• Notes for Process Changes
• Recap
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3. What is a Process
• Series of steps done one after another
• A mechanism to reduce complexity to allow
for more efficient implementation
• Mechanisms to allow autonomy (less control),
learning and adaptation
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4. What is Process Optimization?
• Continuously changing processes to achieve
high effectiveness and efficiency within the
given constraints
– Effectiveness: achieve the business goals
– Efficiency: low “costs”
• Example: bike park
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5. Our Reality - Good UX means both
Effectiveness and Efficiency
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6. Example – Coffee chain
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7. Process Optimization – Platform for
Improvement
• Continuously improving "user experience” and
business objectives within constraints
• Bottom line:
– Who are "users“, what does good UX mean to
them?
– What are business objectives?
– What are the constraints?
– What are key to improvement?
• Example: Bike park
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8. Agenda
• What is Process Optimization
• Process can’t be Optimized Alone
• What Breaks Processes and Strategies to
Optimize Processes
• Process KPIs and Measurement System
• Notes for Process Changes
• Recap
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9. Process is a Part of Operations
• Operations includes:
– Structure
– Process
– People
– Information
• Link between Strategy and Operations, then
Process:
– Define Critical Operational KPI(s) that help business to
compete
– Link process with the above KPIs
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10. Relationship with other Operations
Components
• Structure should divide complexity along its key
dimensions to allow for:
– Efficiency
– Autonomy
– Learning, and
– Adaptation
• Process, people (skill/knowledge, authority and
motivation) and information are intertwined
• Bottom line: cannot optimize Process alone
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11. Avoid Process Sub-Optimization
• Optimization of one
process may harm the
whole
• Improve end-to-end
mega processes, e.g.:
– Order to Cash
– Request to Resolve
– Etc.
• Link process with
mega process KPIs
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12. Agenda
• What is Process Optimization
• Process can’t be Optimized Alone
• What Breaks Processes and Strategies to
Optimize Processes
• Process KPIs and Measurement System
• Notes for Process Changes
• Recap
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13. What Breaks Processes
• Non-compliance
• Process doesn’t take into account exceptions, too
many exceptions
• Loops
• Poor-quality decision
• Too late to detect a problem to repair/remedy
• Miscommunication among roles and groups
• Bottlenecks
• Wrong manual inputs
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14. How to Recognize
• Non-compliance
• Loops
• Bottlenecks
• Too late to detect a problem to repair/remedy
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15. Process Map – Common Components
• Roles in Swim lanes
• Key objects (the nouns) to avoid going too
much into details or too high level
• Each action step:
– Role
– VERB (action) + NOUN (object)
– Location, volume, information needed, etc.
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16. Important Parts of Process Map –
Decision Points
• Considerations
– What decision is made?
– Who makes the decision?
– Which authorization the decision maker needs?
– What needs to be considered to make the
decision?
– Does decision maker have enough information to
make the right decision?
– Does decision make have the motivation to make
the right decision?
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17. Important Parts of Process Map –
Points of no Return
• Points of no Return: points after which, it’s
very costly or impossible to reverse
• Considerations
– What decision(s) to be made before the
“release”?
– Is there enough time for decision?
– Is there enough time to fix issues before
“release”?
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18. Important Parts of Process Map –
Communication Points
• Considerations
– What is the content of the message?
– Is the message understandable to the receiver?
– Is the content come in time for the next steps?
– Is the frequency of communication suitable?
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19. Identify Potential Bottlenecks
• Potential bottlenecks
happen where:
– Low capacity than other
parts of the process
– Special requirement for
tools, skills, authorization
• Look at high volume of
un-finished work before
the step/decision
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20. Strategies to Deal with Bottleneck
• Maximize utilization of
bottlenecked resources
– Continuous utilization
– Check quality before the step
– Move tasks that are not
required to elsewhere
– Move the whole chain
according to bottleneck
• Increase capacity of
bottlenecked resources
– Increase capacity short-term by
outsourcing or temporary
resources
– Increase long-term capacity to
meet the throughput
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21. Optimize Process Effectiveness
• Effectiveness improvement
often comes from external
(customers, suppliers/
partners, etc.)
• Optimize for customers:
– If the goals are clear:
Measure and Optimize
– If the goals are not clear:
Design Thinking
• Optimize for supply chain:
Supply Chain Management
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22. Design Thinking Process
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23. Agenda
• What is Process Optimization
• Process can’t be Optimized Alone
• What Breaks Processes and Strategies to
Optimize Processes
• Process KPIs and Measurement System
• Notes for Process Changes
• Recap
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24. KPI Tree
• Process KPIs include:
– Result KPIs (measured
impacts on or experience of
the customer/business):
effectiveness measurement
– Efficiency KPIs: how many
people, how much cost, etc.
– Diagnosis KPIs
• Result, Efficiency and Diagnosis KPIs form a KPI tree
• Process KPIs should be linked to related
– Mega process KPIs
– Critical operational KPIs 24

25. Criteria for Good KPIs
• KPIs should be simple to understand
• Timeframe should be frequent enough for
corrective actions
• KPIs should be measured from customer’s
point of view – easy to relate
• Examples:
– Uptime % -> downtime minutes per week
– Operating cost -> Zero pending orders &
cost/order
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26. Measurement-driven Improvement
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1. Define standards to measure or collect
old data to establish goals
2. Measure to create a causation model
for performance
3. Identify important factors to improve
4. Improve and measure

27. Case Study - CSAT
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28. Informational vs. Motivational
Measurements
Informational Measurements Motivational Measurements
To improve work quality and
manageability
To reward or punish
Focus on:
• Self-management and self-
improvement
• Trust
• Common understanding of
work
Focus on:
• Comparing with target
• Direct attention
• Feedback to change
Measure more often and
consist of more measurements
Measure less and focus on only
a few important results
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29. Agenda
• What is Process Optimization
• Process can’t be Optimized Alone
• What Breaks Processes and Strategies to
Optimize Processes
• Process KPIs and Measurement System
• Notes for Process Changes
• Recap
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30. Before Process Change - People
Checklist
Does the new process create:
Autonomy
Learning
Motivation to do right thing
Motivation to change
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31. Tips for Change
• Craft change message and story – touch the
emotion, not just logic
• Remove roadblocks, especially unsuitable
motivation system
• Say goodbye to the past
• Change in waves: start small, then big change,
then fine tunes
• Increase the target and/or initiate new
changes
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32. Agenda
• What is Process Optimization
• Process can’t be Optimized Alone
• What Breaks Processes and Strategies to
Optimize Processes
• Process KPIs and Measurement System
• Notes for Process Changes
• Recap
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33. • Continuously improving UX and business objectives
within constraints – Ask WHY
• Before process optimization: Choose WHAT
– Choose what to improve together with process: structure,
information, people
– Chose the process to optimize in the context of end-to-end
mega process
• Process map should highlight areas of focus in
optimization (decision points, points of no return,
communications, bottlenecks)
• Strategies for bottleneck: maximize utilization and
increase capacity of bottleneck
Recap (1/2)
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34. Recap (2/2)
• Improvement of effectiveness often by focusing on
external factors:
– Measure and optimize
– Design Thinking
– Supply Chain Management
• KPI tree with cause-and-effect relationship is critical in
optimization
• Focus on informational measurements and link them to
motivational measurements
• Make sure process changes support people
development and happiness
• Care about emotion and always push for the higher
goals
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35. THANK YOU
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