Evolving Into A Leaner Business

Evolving Into A Leaner Business

Identifying and eliminating process waste requires determining whether something is adding value or not. One has to ask questions such as, ‘Is the customer willing to pay for the activity?’ and ‘Does the activity add value to the good or service?’ One should also ask whether the activity is being done first time round or otherwise. If the activity is a rework or a fix, it can be immediately deduced that such subsequent activities are sheer waste. Preventing reasons for rework, redoing and/or verifying outcomes is one of the simplest means of eliminating waste.

Ing. Joseph Micallef, Partner and Chief Operations Officer at BEAT Limited, a Maltese niche-based consulting firm specialising in the provision of project management, strategic advice and business transformation solutions, defines waste as “anything which does not add value to one’s product or service offering. This applies to all types of business activity, since businesses operate through processes.”

Ing. Micallef says that an essential part of implementing Lean Management principles lies in identifying the process waste: the non-value adding activities. “Whilst these are more evident in the more tangible operations-oriented business setup – think about rejected stock carried within the quarantine stores, for example – it becomes trickier to identify such waste in less tangible, service-oriented business settings. But just imagine a pool of administrators who are busy tapping at their keyboards, repeatedly keying in data bits into a myriad of e-forms, possibly duplicating and making data entry errors in the process too! Waste can occur in any type of business process, whether it is a tangible operations-oriented one or (possibly even more!) service-oriented and within an administrative environment,” he maintains.

The foundation for a solution lies in developing as correct a process definition as possible, with clear roles and responsibilities being identified for specific activities and tasks. From this, the skills and talents demanded by each role are identified, and subsequently fit the rightful resource capability within that role. “It goes without saying that building the right culture, which recognises the strengths and potential contribution of your people, promoting team work, providing sufficient training and coaching, and empowering leadership will contribute towards the engagement of all employees,” Ing. Micallef states. “When it comes to human capital, Lean Management principles promote optimised people who are flexible, multi-skilled and cross-functional, who can deliver value across the process value stream.”

Of course, some degree of specialisation is inevitable, so some specialist roles have to be maximised by directing them towards their relevant strengths. “The most successful organisations are those which manage to encourage their people to take ownership of their areas, processes, products and services, thus promoting a sense of pride, involvement and engagement. Your people are your biggest asset: respect them, nurture them and involve them in your business, and you will reap the rewards,” he advises.

Poor communication can be said to be at the source of many inefficiencies and waste, Ing. Micallef insists, and most issues, such as defects, excess processing and overproduction, can generally all be traced to poor communication and a clear understanding of goals, roles, targets, standards, procedures and systems. “While completely eradicating any form of waste can be a difficult task, defects, for example, can certainly be limited by the communication and application of standardised work plans, more stringent quality assurance at all levels, a full understanding of work requirements and customer needs, and simple job aids such as poka-yoke, which is Japanese for ‘mistake-proofing’.”

This is where BEAT comes in. The company’s mission is to ensure that organisations who call on the company for support benefit from a well-designed methodology which will improve efficiency and deliver greater productivity within their processes. “Our end-objective is to achieve a leaner organisation that is adaptable to changes and ready to evolve in anticipation of its internal and/or external environment and influences,” Ing. Micallef says.

“To do all this, we work hand in hand with executives and staff at all levels within the organisation. Information gleaned from the client’s strategic direction, operational activity and organisation setup, together with participative stakeholder consultation workshops, will help us identify mission-critical business processes, key operational and management metrics, and priorities for improvement. This would be followed by the appointment of Business Process Owners and Change Champions within the organisation, who are empowered to lead the process internally. We then proceed with an analysis of existing processes, identifying critical weaknesses and outlining the relevant redesign principles,” he explains.

Together with management, BEAT defines process improvement goals, identifies the investment required for the proposed implementation plan, and sets out to formulate and deliver that plan. “We remain on hand to carry out the implementation phase and to see the project through till its completion. We also place considerable attention on the transfer of knowledge and expertise to ensure ownership and the long-term validity of our work, providing innovative and pragmatic recommendations to allow in-house personnel to implement and follow up on our work effectively into the future,” Ing. Micallef says, emphasising that business process management revolves around three important factors: methodology, people and technology. “Without the right methodology and the core people to execute, improvement can be somewhat limited. Technology is there to be ‘exploited’ after we have mastered the first two factors. If technology is applied to a situation in which people are being utilised ineffectively, or if the process design and methodology is less than optimal, technology will, at best, help save some time, to at worst, help an organisation generate waste faster!”

While evolution is a challenge for businesses of all sizes, implementing it carefully is especially important for small but growing businesses, for which properly handled business process management can help maintain growth in flexible, sustainable and measurable ways. “It’s inevitable that a small business growing at pace will need new systems and processes to keep moving forward, but while scaling up sounds ‘sexy’ in theory, in practice it can be a minefield,” Ing. Micallef warns. “Bear in mind, wildlife that evolved over time is the ultimate survivor. If a business owner is not geared to evolve in anticipation of upcoming change, business success may be jeopardised.”

To this effect, measures recommended by Ing. Micallef include improving cash flow, recruiting and maintaining competent staff, and promoting flexibility, multiple skill capabilities and cross-functionality with a careful dose of specialisation where needed. “Automating repetitive tasks that are generally expected to remain unchanged for a considerable number of processes whilst introducing more flexible automation for the more volatile tasks are just some of the considerations that can benefit from being systemised in a fast-growing business. Approached correctly, business process management (BPM) can help your company adjust to the changes that rapid growth brings. Whether you, as an SME owner, bring in a consultant or tackle it in-house, BPM can help reduce costs, improve overall company performance and organisational flexibility, and give your company an edge over competitors.”

Whichever way one goes about it, reviewing one’s business processes on a regular basis ensures that these evolve in step with business growth. “Having simple systems and procedures makes it easier to ensure that things are done consistently, and that employees operate in an expected way. With any process that you implement, keep in mind that the beauty of a start-up is its agility; that you can change and evolve your business model overnight. Implement efficient processes to make growth manageable, but hang on to that agility for as long as you possibly can.”

“At the end of the day, ignoring any waste generation activities in the process encourages negative development. Only systematic discovery and elimination of waste improves such processes, ensures positive development, and ultimately maximises output and profitability. And that is, after all, what every manager should be aiming for,” he concludes.

 

 

 

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