You can streamline your business and reduce process complexity by using process maps to identify the critical and the unnecessary areas in the maps. By identifying steps that add no value, or that lead to errors, you can remove or improve these to streamline your business and improve profitability.
To streamline your business you must first reduce process complexity.
Process complexity is exponential. Every extra step involved multiplies its complexity by the square of the number of steps. Two steps involve a complexity factor of 4 and 5 steps of 25, 10 of 100 and so on.
Let’s say you have a message to receive, and you ask another person to get the message and pass it on to you. That increases the complexity of the message-receiving process. The other person might delay, causing inconvenience or worse, or they might even get the message wrong. They might translate the message into their own way of saying things. They could change its meaning. So not only has the complexity increased, but so has the possibility of error.
The same is true of any process. By limiting the number of steps in a process, you decrease its complexity and reduce the possibility of error. Here are some suggestions how to streamline your business and reduce process complexity.
1. Create a Process Model and Study it.
Can you see a way of simplifying the process: are any of the steps in the process map unnecessary? Have an open mind, and do not be defensive if you own the process. If there have been mistakes made, don’t blame people, blame the built in process complexity. Can you remove or improve those steps leading to errors?
2. Define the Problem
Define the problem, not just the steps arising from it. By tracing a current problem back on a process map you can often see the steps responsible. By removing or amending these steps you can remove the problem. Human error is often caused by the number of process steps themselves. Remove the step and you may remove the source of the error. Be objective as you can when doing this or it will not be effective.
3. Redraw the Process Map Eliminating Process Complexity
Identify the crucial steps in the process map. Identify and label each step as follows:
- The CVA (Customer Value Add),
- BVA (Business Value Add); and
- NVA (Non Value Add) sections of the process.
The CVA sections are essential since they add value that the customer will pay for (e.g. product creation). The BVA sections are important because they are there in order for your business to operate. These might be financial transactions, paying taxes, meeting regulations. The NVA sections are unnecessary and complexities that you should remove altogether.
4. 80/20 Your Processes
Identify those areas where responsibility for either 80% of your problems or 80% of your opportunities comes from 20% of the causes. This is a common relationship, and you can redefine your processes to take more advantage of these areas or cut them out. Make this a continuous improvement project and not just a one-off action.
5. Use People and Equipment More Efficiently
Use technology where it will carry out tasks more efficiently and productively than people. Redeploy people to where they are best used by the company. An investment in equipment can have a short payback period. Though some firms use technology that creates bottlenecks where human being would be more productive.
6. Simplify and Reduce Process Complexity
By eliminating all NVA activities you will reduce process complexity and streamline your business. Reduce or eliminate bottlenecks and redundant steps. Those steps in the process that do not add value and are not essential to the running of the company, and you will reduce complexity.
7. Control Your Processes and Performance
Introduce means of controlling each process and measuring its performance using KPIs (Key Performance Indicators) and Statistical Process Control (SPC). Unless you control and check your revised processes you may lose all you have gained as people slip back into the old routines. If things go wrong you will be able to identify where and fix it!
Do this with every process used to run your business and then start all over again when market changes require it. By eliminating unnecessary process complexity, you will not only streamline your business but set up another process: one to control and measure your new streamlined business and to ensure that it stays that way.
Apply the above tips to any part of your business from approving vendors to despatch and customer service. But, also look outward from the organisation to how you deal with changing markets and trends.
Reducing process complexity can have a profound effect on turnaround-times, quality improvement and profitability. They are not difficult to apply, so get started now before your competitors do.