Process Design Principles

The following process design principles described here represent the major concepts involved in most process redesign projects. Not every design principle applies to every process. Never abandon common sense when you apply them. As a guideline, the principles should prove to be quite helpful.

5.5.1 Design around Customer Interactions

Customer interactions represent a point of contact into the organization and represent opportunities to show the success or failure in meeting the needs of the customer. Every customer interaction is an opportunity to enhance the reputation of the organization. The customer experience is the sum of the quality of each customer contact point.

When considering customer interactions during the design stage of process improvement, it is important to consider all the different opportunities where the customer could contact the organization. It is inefficient to optimize an order fulfillment process without considering the customer support process that facilitates resolving problems with that order. Although the order was processed smoothly, if the wrong item was shipped and the customer becomes frustrated trying to return the item, the outcome of the customer experience is not positive and repeat business is less likely. The customer experience is dependent upon the primary business processes that directly interact with the customer and the internal support processes that indirectly influence customer experience quality. Thus, serious attention, perhaps with different issues, also must be directed to these support processes.

5.5.2 Design around Value-Adding Activities

This principle requires a clear understanding of what the customer of the process requires. Transforming information or material to meet customer requirements creates value-adding activities. In addition, any step the customer is willing to pay for, such as a service, is also value-adding. Study the “as-is” process flowchart and determine exactly where the value-adding activities are performed. Then, extract these activities from the “as-is” process and explore a means to enable the value-adding activities efficiently and effectively.

Do not discuss who will do any particular activity or where it will be performed at this point in the process. Combining the activity’s “what” and “who” at this stage will distract the team from developing a creative, unique process solution. Your efforts to create an effective process can initiate debate about who should be responsible for the task. After an effective process flow is created, then a discussion can ensue regarding who is responsible for the work required to enable the process.

To create a new process, job descriptions, work location, and task assignment must be flexible. Team members should be aware that the existing configuration of jobs, work location, and organizational structure can be reassessed. Additionally, do not impose constraints thinking. Freedom of thought, outside of existing patterns, allows people to create a dramatically improved process.

Some redesign methods serve to explore non-value-adding activities to eliminate or reduce them. This approach may create acrimonious relationships with people involved in this work. Informing people that their work adds no value to the process may trigger animosity in defense of their positions. To circumvent this situation, look for value- adding activities to optimize instead. Simply by focusing and optimizing value-adding activities, the non-value-adding activities will dissolve thereby avoiding any potential confrontation that may create resistance to the redesign project.

5.5.3 Minimize Handoffs

As activities and rules are defined during the process definition, handoffs between functional groups become apparent. A “handoff” in business process management occurs when ownership of an activity or information is passed from one individual to another. For example, when a purchase order is transferred to invoicing, a physical handoff is created as the activity is transferred from one group (shipping) to another (billing).

Handoffs between individuals or functional groups present an opportunity for a breakdown in the process. As a transaction transfers from one group to another, data can be lost or misinterpreted. In addition, the more information transferred, and the more times the information is transferred, can further distort the information and lengthen the completion time of the process.

A key success factor is to simplify the handoffs and limit handoffs when possible. Automating handoffs through technology will also assist in reducing errors and speed up the activity between individuals and groups.

5.5.4 Work is Performed Where it Makes the Most Sense

Task assignment occurs after an effective process flow is designed. Application of the first design principle may negate some existing work, create new work, and/or may move work from one department to another.

For example, during one redesign effort, a team was challenged to decide who should be responsible for the initial review. The initial review required the expertise of an engineer with a broad background rather than a specialist. The position did not exist in the original process structure. To implement the new process, the department had to develop a job description for a generalist engineer and then hire someone for the new position. Therefore, current job titles and locations should not be constrained. Create the position(s) necessary to enable the process flow to operate with the greatest efficiency and effectiveness.

5.5.5 Provide a Single Point of Contact

A common symptom of not having a single point of contact is multiple transfers of customers’ calls. Another symptom of not having a single point of contact occurs when staff is not directed who to ask for information.

A single point of contact can be a person such as a project manager, process consultant, or customer service representative. In addition, a single point of contact could be a data repository like an intranet.

5.5.6 Create a Separate Process for Each Cluster

Often a single process attempts to handle every variation. However, process inputs and outputs can often vary by complexity, type, size, and so forth. For some variations, the process might work smoothly, but for others it might be cumbersome and slow.

For example, when shopping at a grocery store a shopper has eight items to purchase and chooses to checkout in the express checkout lane. The store has two checkout processes, one for many items and one for few. The regular checkout line has a bagger, but a bagger is not needed for the express line.

If inputs naturally cluster from significant differences, then a decision diamond should be placed at the front end of the process asking which sub-process is most appropriate for this cluster. Additional resources and costs are introduced, but efficiency of throughput and greater client satisfaction should occur. The input cluster is then routed to the appropriate process.

5.5.7 Ensure a Continuous Flow

In a manufacturing process, steps that directly add value to the customer such as delivering supplies, building the product, and shipping it, represent the main sequence. In lean terminology the main sequence is the value stream. In a service process, the steps that make and deliver the service are the main sequence. The customer pays for the output of the value stream. This is a means by which an organization earns revenue.

Lean thinking recommends that nothing should impede or slow down the value stream.

5.5.8 Reduce Batch Size

Batching causes wait time for items at the end of the batch. Batching causes inventory to build as it moves through your process. As you cut batch sizes, you start creating a smoother flow through the process. Ultimately, a batch size of one or processing transactions in real-time is ideal.

5.5.9 Bring Downstream Information Needs Upstream

Explore, at each step of the process, what may cause frustration by team members. When a team member expresses frustration, i.e., it is frustrating when there is missing, incomplete and incorrect information, then the design principle should be considered.

There are two ways of implementing a design principle. If the process is routine and not complex, the upstream person should be trained or given a template or check sheet to capture what the downstream person needs. However, this solution will not work when the process is complex and/or changes frequently. For complex processes, the downstream person must be brought upstream during a redesign to receive information directly from the source.

5.5.10 Capture Information Once at the Source and Share It

If a process requires entering the same data more than once, then the design principle is appropriate. Root out data redundancy, re-keying, and reconciliation. Enterprise resource planning (ERP) software is designed to accomplish this principle. However, knowledge of the processes must be clear before installing an ERP system.

5.5.11 Involve as few as possible

The children’s game, “Telephone,” illustrates the importance of this design principle. In the game, ten kids line up, and the first whispers in the ear of the next child. Each child passes the message along from ear to ear. The last child announces what the message was, and everyone laughs because the relayed version differs substantially from the original.

In a relay race, the baton pass is most important. Often, a slower team will beat a faster team because the faster team had a problem with the baton pass. (During the 2004 Olympics, both the U.S. men’s and women’s relay teams suffered from poor baton passes and didn’t win the gold medals.)

Think of the handoff of work or information as the baton pass or message in “Telephone.” Every handoff offers the potential for error. Eliminating “baton passes,” eliminates that potential. This is accomplished by expanding the job scope upstream and downstream so that a person “runs” with the work longer. This requires cross- training and often a change in compensation to reward knowledge or pay for new skills. There are some advantages to cross-training.

First, work often doesn’t arrive at an organization in a steady, even flow. Instead there are spikes and bottlenecks in the workload. With more cross-trained workers, bottlenecks can be broken as more workers are qualified to manage them.

Second, if a person does more of the work, he or she will take increased pride in the outcome. This person can see his or her major contribution to the whole. This pride increases the desire to produce a quality product or service.

5.5.12 Redesign, then Automate

One of the worst things an organization can do is take the “as-is” flowchart and lay information technology on top of it. This is bad for two reasons. First, information technology can be expensive. There might be much less expensive but equally effective solutions, such as redesigning processes or training. Second, despite the investment, the problem might not be solved and automating it could magnify the issue. It is crucial to first employ process design principles, benchmarking, best practices, and

lean thinking before automating an “as-is” process. Otherwise, a faster but much more expensive and still ineffective process may result. A clear understanding of the organization’s processes is necessary. IT may not be the solution.

The process improvement team will begin to envision a new process after benchmarking best practices and using design principles. At this point, engage in conversation with IT on current and future IT capabilities, thereby conjoining innovative process ideas with enabling IT tools.

5.5.13 Ensure Quality at the Beginning

Quality problems encountered in the first several steps of a process will create exponentially negative effects downstream. The time spent to fix inefficiencies by the downstream people can be excessive. There are certain stages in a process where an investment in time and money are warranted and the beginning is one of them. Time and money spent upfront to ensure quality, also emphasized by Lean thinking, pays for itself in preventing reviews and rework later.

5.5.14 Standardize Processes

Sometimes a significant variation in output is caused by five people doing the same process five different ways. This creates three concerns. First, with this kind of variation, it’s difficult to improve the process. Second, when a problem occurs, it is difficult to determine if it is a process or training problem. Third, how can there be process control when there’s no standardization? It’s much easier to find the root cause of a problem when people standardize their work. Even less structured processes might be de-composed into more and less structured components. The former may be amenable to standardization.

5.5.15 Use Co-located or Networked Teams for Complex Issues

Complex problems require people to pour over information and data in real time. If complex problems occur regularly, consider co-locating team members. If co-location doesn’t make sense, then network the team so information can smoothly flow.

5.5.16 Consider Outsourcing Business Processes

Several organizations may decide that the best course of action is to outsource one or more processes to companies that specialize in the performance of that process. Outsourcing certain processes can free up the organization to focus on other more strategic processes that add greater value to the organization. If outsourcing is considered, it should be compared to the costs of designing the process in-house as well as compared to the risks associated with outsourcing, e.g., IP protection, quality and controls delegated to the outsourcer, and disposition of current employees.

Such risks could include the financial solvency of the outsourcer, integration of their process with your own, as well as the culture change that would result of the outsourcing. It is also important to consider how to terminate the outsourcing arrangement should you need to do so in the future. Although these risks seem great, many organizations find that outsourcing some business processes is a viable strategic

model and helps the business become more agile and focus on those key activities that add the greatest value to their organization.