What is Process Improvement and How Does it Help Companies?

One of the operational objectives of all companies is the improvement of their production and business processes. This makes it possible to make the company’s technical procedures more efficient to reduce costs, optimize the functioning of some areas or departments and minimize the errors that may arise from such inefficiencies.

What is a process improvement

Process improvement is a business procedure through which inefficiencies in an organization’s processes are sought to correct them or improve their performance. Its objective is to review them and carry out the corresponding adjustments to minimize or eliminate errors permanently.

Logically, thinking that it is possible to optimize all of a company’s processes is unrealistic . They involve a wide variety of factors that are not always related to each other, so companies must look for those that are generating the most inefficiencies and focus on optimizing them to the best of their ability.

In recent years, process improvement has become one of the priorities of companies . The consolidation of new technologies, the need to reduce costs and new ways of working have been the main catalysts that have driven the need to improve the efficiency of business processes.

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Why improve processes?

There are many reasons to seek process improvement in your company:

• Reduce, to the extent possible, all the technical and productive inefficiencies present in the company, as well as the possible errors that may arise from them.
• Reduce cycle time.
• Reduce the resources necessary to carry out the activity , which results in improved productivity and reduced costs.
  Improve the quality of the product or service, at least that perceived by customers.

How to make a proposal for process improvement? (Phases)

Carrying out a process improvement plan involves acting in several different phases, all of them interconnected with each other.

Identify the area or areas of improvement within the organization

The first step to improve processes is to identify the area or areas that are generating inefficiencies . To do this, it is advisable to carry out an internal audit of processes that allows identifying the current problems and potential risks that the company faces.

In many companies there is a figure in charge of assessing and correcting these inefficiencies, especially at an economic and cost level: that of the controller . To carry out this work, the controller uses a series of analytical tools that are normally integrated into the most modern ERPs .

Detect the main causes of the problem

It is not possible to solve a problem (or optimize a process) without first knowing the cause or causes that originated it. Therefore, the current process must be analyzed to understand it from beginning to end and thus set realistic improvement objectives.

Formulate the objectives

Once the causes of inefficiencies are known, objectives for continuous process improvement must be formulated . Obviously, these objectives must meet a series of requirements:

• Be realistic and achievable , in the sense that they are possible to achieve.
• Be limited in time and in its degree of compliance.
• Be susceptible to modification in the event of unforeseen contingencies, without losing the focus of the initial plan.
• Adjust to the operational and economic reality of the company.
• Be understandable for all agents involved.
• Be mandatory, and that the company does enough to achieve it.

Select process improvement actions

Once the inefficiencies have been detected and the objectives have been formulated, it is necessary to select those actions that improve the company’s processes. There are various proposal techniques , such as brainstorming or the nominal group technique, among many others.

In general, the objective of this stage is to have a list of the main actions that must be carried out to meet the objectives established in the previous stage.

Make a plan

In this stage, the team in charge of facilitating process improvement has to plan all the improvement actions agreed upon in the previous stage, considering above all their levels of interdependence and priority .

Planning process improvement will depend on a series of aspects such as the following:

• The difficulty of its implementation. It is advisable to prioritize tasks from lowest to highest degree of difficulty, with the aim of freeing up the simplest tasks to focus on the most complex ones.
• The implementation period. There are tasks with a completely defined scope that should not require excessive effort and others that, on the other hand, require longer implementation time due to their complexity. Their prioritization will depend on the time each of them takes.
• Impact on the organization. The priority also depends on the degree of criticality of the process. One major change will have more impact than many small ongoing changes, even when they affect critical processes. The normal thing is to start with the improvement of the processes that have the least impact on the continuity of the activity and subsequently focus on the most critical aspects.

Continuous monitoring

Implementing a process improvement is only the first part of the entire plan. After running, it is important to continuously monitor the activity to prevent processes from becoming inefficient again.

In this monitoring plan, all changes in the processes will be arranged in an orderly manner along with their priorities to establish their correct development.

Conclusion

In general, all companies, after more or less long periods of activity, suffer inefficiencies in their processes, either due to obsolescence or because they were not well designed from the beginning. Therefore, it is important that you devise a correct plan to improve the main business processes, to the extent of your company’s possibilities.

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