7 Business Process Improvement Methodologies to Refine Operations
Whether you have defined it or not, every business has processes. No matter if you are running a bakery or smartphone manufacturing company, all businesses go through a set of activities to complete a business function. The scale and complexity may vary, but the essentials are the same — all businesses have processes.
And the purpose of every business is to run its processes most efficiently and to produce the highest quality products or services so that it can make profits.
Business process improvement methodologies provide you with a framework, tools, methodologies, and best practices to help you improve business processes so that you can achieve the desired business objectives.
According to Forrester’s claims, BPM initiatives can result in productivity benefits of 30 to 50 percent and an internal rate of return higher than 15%.
In this post, I am going to cover business process management, the basics of business process improvement, and top process improvement methodologies to help you improve business processes.
What is business process management?
Business process management (BPM) includes managing all business processes for effective and efficient business operations. It includes the use of best BPM practices, skills, methodologies, frameworks, and tools for effective process management.
Basics of business process improvement
A business process is a set of activities or steps to complete a business function. Business process improvement includes making business processes efficient, cohesive, and streamlined.
The workflow of process improvement includes:
- Mapping and analyzing the current business processes
- Implementing changes to the processes based on analysis and process improvement methodology
- Monitoring the updated processes to measure the impact and success
You can use various process improvement methodologies with the help of business process management software (BPMS) to make improvements in existing business processes.
Check out this guide to learn more about the best business process management software.
Top business process improvement methodologies to improve operations
Every business has unique needs pertaining to the industry, the scale of the business, and type of the services it is providing. Thus, there is no one size fits all solution when it comes to business process improvement. But, you can use one or a combination of the following process improvement methodologies to improve business processes:
1. Six Sigma
Six Sigma is the most popular business process improvement methodology used in various industries to reduce defects in products or services. It brings the failure rate to 3.4 defects per one million cycles by reducing defects and errors, minimizing variation, and increasing quality and efficiency.
It uses two main frameworks: DMAIC for existing processes and DMADV for new processes.
DMAIC: DMAIC is an acronym for the five phases of the improvement process: D- Define, M- Measure, A- Analyze, I- Improve, and C- Control. It is a data-driven method used to improve the existing processes. It is primarily used in the manufacturing industry. However, it can be applied to the delivery of services as well.
- Define the opportunity for improvement from the customer’s perspective
- Measure the performance of your existing processes in numbers
- Analyze the process to find defects and quantify the improvement in numbers
- Creating the strategy to improve business processes and establishing a relationship between change and its impact.
- Control ensures improved processes are well implemented and assesses future process performance to correct deviations
DMADV: DMADV is the acronym for D- Define, M- Measure, A- Analyze, D- Design, and V- Validate. It is used when you have to redesign the existing business processes and design new processes from scratch.
2. TQM (Total quality management)
Total quality management is a customer-focused business process improvement methodology that aims to improve the quality of business processes with continuous improvement. It is based on seven key principles:
- Customer focus: It puts customer experience at the center of all activities. If you are making changes, you need to identify how it impacts the customer’s experience.
- Continuous improvement: It focuses on continuous and incremental improvement in business.
- Employee involvement: It encourages all employees to contribute ideas and suggestions for process improvement
- Process approach: It focuses on the overall performance improvement of an organization for increased customer satisfaction rather than individual tasks.
- Data-driven decision-making: It focuses on collecting data to analyze how processes are performing, identify inefficiencies, and decision making.
- Strategic approach: It aligns the process improvement efforts with the organization’s strategic goals and objectives.
- Supplier relationship: It focuses on building strong relationships with suppliers for mutual cooperation.
3. Lean manufacturing
Lean manufacturing is a process improvement methodology that focuses on minimizing waste within manufacturing systems while simultaneously focusing on maximizing productivity.
This methodology identifies the waste or non-value-adding activities in the business process and provides you with the tools and techniques (5S, VSM, and Kaizen) to eliminate the waste.
It is based on the five core principles:
- Identifying value: It focuses on identifying who you’re building your product for and what value you have to offer
- Value stream mapping (VSM): In this step, your existing business workflow is compared with desired future workflow to find out the waste
- Creating a flow: It focuses on creating a project plan to remove the wastes identified in the above step
- Establishing a pull system: It focuses on pulling the work from the previous stage in the workflow. It is also called “just-in-time” manufacturing.
- Continuous improvement: It focuses on the continuous improvement of existing workflows.
Check out: 3 Real-world business project management examples
4. Kaizen
Kaizen is more of a philosophy and mindset than a process improvement methodology. It focuses on continuous improvement through small and incremental changes.
It is born out of the Japanese philosophy of Kaizen which has the basic principle that life should be continuously improved so we can lead more fulfilling lives. It shares the same belief when it comes to work.
This methodology focuses on eliminating these types of waste that can hinder the work:
- Muda (wastefulness): Practices that don’t add value
- Mura (unevenness): Overproduction that creates waste
- Muri (overburden): Too much strain on resources
Kaizen incorporates various practices such as Plan-Do-Check-Act (PDCA) cycle, 5 Whys Analysis, and Gemba walk to find the root cause of the problem and action to solve the problem.
5. TOC (Theory of Constraints)
The Theory of Constraints is an entirely different process improvement methodology that focuses on identifying the most important limiting factor known as a constraint in the business process. It then tries to systematically manage this constraint to improve the business process so that it is no longer the limiting factor.
It is based on the principle that there is one weakest link in the chain of multiple complex business processes that constraint upon the entire system.
It uses the following framework to improve that constraint:
- The Five Focusing Steps: Identify, Exploit, Subordinate, Elevate, and Repeat
- The Thinking Processes: What needs to be changed, what should it be changed to, and what actions will cause the change?
- Throughput Accounting: It takes a slightly different approach than traditional accounting. It focuses on throughput accounting. It asks three questions: will throughput be increased, will investment be reduced, and will operating expenses be reduced?
6. BPM (Business process management)
Business process management in itself is a framework that uses a five-phase process to improve business operations. It involves analyzing, modeling, implementing, monitoring, and optimizing to improve business processes and drive desired business outcomes.
Each phase can take months to implement depending on the scale. Here are the five phases involved in business process management:
- Design: It includes analyzing the existing process to find out what can be improved.
- Model: It includes analyzing, benchmarking, and comparing processes in various simulations to determine the most optimal improvement.
- Implement: it includes executing the improvement
- Monitor: It includes tracking the improvements at specific intervals to develop metrics for comparison.
- Optimize: It includes optimizing the business process for potential enhancement.
7. BPR (Business process reengineering)
Business process reengineering is not a methodology but more of a process that is not focused on incremental improvement but on radical changes. When an existing business process is not optimized after all the efforts, it is used to make radical changes in the organization’s process design for significant improvements in performance, efficiency, and effectiveness.
It includes the following key steps:
- Defining objectives
- Redesign the processes
- Modeling and testing
- Implementation
- Monitoring
- Optimization
Improve your business processes for profitable business operations
Business processes need improvement from time to time. Reasons can be any: change in customer demands, market trends shift, or existing operational efficiencies.
If your business processes are not fully optimized & standardized and lack agility, visibility, and efficiency, it is hard to keep up with the changing demands, identify bottlenecks, work efficiently, and sustain profit margins for a long time.
Proven business project improvement methodologies guide you with the changes to help you improve your business processes.
The measure of a successful business process is that it is streamlined, efficient, optimized, and agile, the team is working efficiently and producing consistent quality products, and the business is making profits and achieving set goals.
Check out: 21 Best Business Management Software You Should be Using Today
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