An efficient process is like a beautiful well-oiled machine. Each part firing as it should, everything seamlessly flowing together without issue.
While we target this as the goal, it’s unfortunately not always reality. We often see businesses stuck in a cycle of inefficiency because they fail to update and innovate their processes. They hang on to these processes because they are generally simple and familiar, ignoring the warnings signs that these processes are not delivering results as they once did.
A key to long-term business success is knowing how to improve process efficiency. It’s crucial if you’re thinking about starting on the path of digital transformation or taking on something such as ERP implementation. How can you get started with process improvement? Let’s get into this…
WHAT MAKES A PROCESS EFFICIENT
Before tackling how to increase process efficiency, let’s start with a simple question…
What makes a process efficient in the first place?
Simply put, efficiency measures the amount of effort required to produce an output. If it’s taking your staff a tremendous amount of time to produce one unit and you need to sell many units to be profitable, then your efficiency is flawed. On the flip side, if you can successfully produce many items without sacrificing on quality, then your efficiency is high.
While the theory sounds simple, it can be difficult to accurately measure your efficiency rate. We see a lot of companies in situations where they don’t realize their efficiency rate is slipping until they’ve been working counterproductively for a long period of time.
Fortunately, there are simple ways to get your organization back on track.
4 SIMPLE TIPS FOR IMPROVING PROCESS EFFICIENCY
1. CREATE A PAYOFF MATRIX
When we work with organizations we generally see that the average organization has hundreds and in some cases even thousands of individual processes that materialize throughout a given workday. In a majority of cases it does not make financial or operational sense to overhaul them all at once.
We recommend identifying the core processes organizations want to update and scheduling those improvements based on need. Organizations can do so by creating a payoff matrix.
Start by defining the key process improvements to make. Then, rank each one by value on a scale of 1 to 10. Next, discuss how difficult it would be to improve each one, using the same scale.
Using this data, create a matrix and divide it into four quadrants. In one quadrant, you’ll find the processes that are the most valuable and the easiest to improve. Start here and prioritize these improvements.
For now, avoid tackling the processes that fall into the “low-value and difficult to change” quadrant. It’s best to reassess at a later date to see if you need to make those adjustments.
2. CONDUCT BUSINESS PROCESS REENGINEERING
Business process reengineering is about understanding your pain points, root causes, and goals for your various processes and then redesigning the processes that are most important to you.
If your organization is about to embark on any sort of enterprise software implementation, you may want to conduct process reengineering to see what you need to change before you automate anything. You can identify where the weak areas are, as you go through each individual high-level process. This will assist you in defining your future state and allow you to decide which features you need in your ERP system.
3. ADOPTION OF A CONTINUOUS IMPROVEMENT CULTURE
While business process reengineering can be helpful if you’re about to embark on an ERP implementation, it can also be costly and time-consuming. To ensure that you don’t have to do it on a regular basis, consider shifting your company culture to one of continuous improvement.
This means that instead of looking for ways to improve process efficiency once every ten years, your employees are always on the lookout for opportunities for improvement.
For this strategy to be successful, employees must understand not only how their processes work, but why they’re in place and what ultimate purpose they serve.
Employees should know that any time they want to make a change, they must make sure the “customer” supports and approves it. Establish process governance.
If team members can work collaboratively to make a minor change to improve their department, they may not need senior management’s approval. However, if it’s a big change that affects multiple stakeholders, approval and oversight should be required.
4. SHARE CHANGES WITH YOUR TEAM
Once a team has built out a more efficient process and gained all of the necessary approvals, it needs to be documented. Utilize a process flowchart that clearly defines what the new steps include, and be sure to share the changes with the rest of your team.
As the team views the chart, it will be easier for them to understand the changes, what they entail, and how their role fits into the new process. Be sure to allow them to ask questions and be prepared to explain why the change was necessary and the benefits the new efficiencies will bring to the entire organization.
LEARN HOW TO IMPROVE PROCESS EFFICIENCY FROM A TEAM OF EXPERTS
If processes aren’t working as they should, it can negatively affect every aspect of your business. This negativity can impact customer satisfaction, employee moral, and in some cases increasing employee turnover.
There is no need to remain stuck in a cycle of inefficiency. When you learn how to improve process efficiency, your organization can take steps towards keeping your operations running smoothly. Throughout the entire journey, our business process reengineering consultants are here to assist you in tackling every inch of process improvement. Contact us today for a free no-obligation consultation. At MCDA CCG we are well-versed in a wide range of industries bringing real world experience to your process efficiency improvements. Call today (657) 258-0577. Visit our Instagram for other great business tips and topics.