Why So Few Companies Get Process Management Right
•
7 likes•8,682 views
This document discusses process management and why many companies struggle with it. It provides data showing that most companies document few of their processes, and of those documented processes, most are not current. Additionally, few processes have clearly defined metrics or an identified owner. The document advocates for three criteria of proper process management: 1) defined and documented processes, 2) 2-5 relevant metrics that are visually displayed, consistently measured and improved, and 3) sole ownership and oversight of each process. It discusses how having process owners, rather than functional managers, leads to better process performance and continuous improvement.
Recommended
Recommended
More Related Content
What's hot
What's hot (20)
Viewers also liked
Viewers also liked (17)
Similar to Why So Few Companies Get Process Management Right
Similar to Why So Few Companies Get Process Management Right (20)
More from TKMG, Inc.
More from TKMG, Inc. (17)
Recently uploaded
Recently uploaded (20)
Why So Few Companies Get Process Management Right
- 2. Founder: The Karen Martin Group, Inc. Consultant / Coach: Lead Lean transformations, facilitate improvement & develop workforce. Teacher: University of California, San Diego’s Lean Enterprise program. Author: Karen Martin, President www.ksmartin.com 1 Fall 2013
- 3. % Of Processes That Are Documented 17% 17% 17% 22% 27% 0% 5% 10% 15% 20% 25% 30% 0 - 10 11 - 25 25 - 50 51 - 75 76 - 100 3
- 4. Of those documented, % that are current 25% 15% 8% 42% 10% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 0 - 10 11 - 25 26 - 50 51 - 75 76 - 100 4
- 5. % Of Processes With 2-5 Clearly Defined KPIs 49% 15% 20% 10% 6% 0% 10% 20% 30% 40% 50% 60% 0 - 10 11 - 25 26 - 50 51 - 75 76 - 100 5
- 6. % of processes with KPIs that are measured regularly 0 5 10 15 20 25 30 35 40 45 50 0 - 10 11 - 25 25 - 50 51 - 75 76 - 100 12% 10% 18% 6 44% 16%
- 7. % Of Processes With Clearly Identified Owner 40% 10% 13% 21% 16% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 0 - 10 11 - 25 26 - 50 51 - 75 76 - 100 7
- 8. Process Owners – Level in Organization 37% 53% 6% 2% 2% 0% 10% 20% 30% 40% 50% 60% Supervisor Manager Director Vice President C-Level 8
- 9. 3 Criteria for Proper Process Management 9 1. Defined and documented processes 2. 2‐5 relevant KPIs for each process a. Visually displayed b. Consistently measured c. Consistently improved 3. Sole ownership / oversight
- 10. 3 Criteria for Proper Process Management 10 1. Defined and documented processes 2. 2‐5 relevant KPIs for each process, visually displayed 3. Consistently measured 4. Consistently improved 5. Sole ownership / oversight
- 11. Granularity of Work – From Value Stream to Specific Work Tasks Value Stream Process Process Process Step StepStep Micro Perspective Process Maps Macro Perspective Value stream maps 11
- 12. Source Refrigeration & HVAC, Inc. Current State Value Stream Map Service Delivery Created February 11, 2009 CONFIDENTIAL Customer Receive customer call Call Center PT = 2 mins. %C&A = 60% Review & Post Invoices Posting Admin PT = 3 mins. %C&A = 98% Batch: 1x/day 0.0833 hours 2 minutes 2 hours 5 minutes 1.5 hours 90 minutes 1.25 hours 75 minutes 2 hours 120 minutes 4 hours 5 minutes 10.7 hours 10 minutes 48 hours 25 minutes 4 hours 3 minutes 10.7 hours 10 minutes 2 hours 4 minutes 480 hours Lead Time = 572 hours Process Time = 349 minutes Select & Dispatch Tech Dispatcher & Service Manager PT = 5 mins. %C&A = 60% Make Repair; Call to raise the NTE Tech PT = 120 mins. %C&A = 40% Complete Call in GP Dispatcher PT = 5 mins. %C&A = 80% Review Service Call Data Service Manager PT = 10 mins. %C&A = 50% Batch: 2x/day Review Open Ticket Report Billing Admin PT = 25 mins. %C&A = 75% Upload time card Tech PT = 0 mins. %C&A = 70% Batch: 1x/day Close call in Verisae Account Manager (West) PT = 1 mins. %C&A = 90% Batch: 1x/day Process Time Cards Payroll Admin PT = 10 mins. %C&A = 90% Batch: 1x/day Process A/P A/P Admin PT = 15 mins. %C&A = 85% Batch: 1x/day Tech Assess Problem PT = 90 mins. %C&A = 90% Tech Special Order Part Tech Pickup Part at Parts Store PT = 75 mins. %C&A = 95% Tech Get Part from Truck PT = 0 mins. 120 m. Great Plains Verisae (Customer) Review Invoices; Close in Verisae (Pac) Account Manager PT = 10 mins. %C&A = 85% Batch: 3-5xper wk Enter Invoices into Verisae & Excel; Mail Invoices Billing Admin PT = 4 mins. %C&A = 95% Batch: 1x/week Excel Spreadsheet (Customer) 40% Receive Cash; Post Payment Collections 75 m. 120 m. 240 m. 640 m. 6 days 240 mins. 640 m. 120 m. 60 days90 m.5 m. ?% ?% Supplier %C&A %Complete and Accurate AR Activity Ratio FTE Full Time Equivalent LT Lead Time PT Process Time RFPY Rolled First Pass Yield Acronym Key Lead Time to invoice = 86.2 hrs Process Time =5.9 hrs. NOTE: Business hours ActivityRatio = 6.8% RFPY = 1.1% Lead time to cash = ? days Value Stream Maps
- 13. 0 1 0 15 6 -1 0 Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A Activity PT LT %C&A 1 Fax PO to Sales Rep 0 0 45% 2 Review PO; clarify with customer as needed 20 2 90% Fax PO to warehouse 10 4 90% 5 6 Check inventory levels; notify Sales Rep re: status 5 4 95% Fax PO to Sales Rep 5 0.33 90% 0 20 10 5 5 0 2 4 4 0.33 45% 90% 90% 95% 90% 0 20 10 5 5 Rolled %C&A Critical Path LT Total PT Critical Path PT 5431 2 Mary Townsend Hours Worked per Day Sally Dampier Occurrences per Year Sam Parks Current State Metrics-Based Process Map Dave Morgan25-Jun-08 8 Facilitator Process Details Michael Prichard Order FulfillmentProcess Name Specific Conditions Domestic orders through sales force 37,500 Date Mapped Sean Michaels Sales Rep Ryan AustinDiane O'Shea Mapping Team LT Units Function / Department PT Units Step # ► Customer Finance Warehouse / Shipping Seconds Minutes Hours Days Seconds Minutes Hours Days Metrics-Based Process Maps
- 15. Standard Work Combination Sheet 15www.velation.com
- 16. 3 Criteria for Proper Process Management 16 1. Defined and documented processes 2. 2‐5 relevant KPIs for each process a. Visually displayed b. Consistently measured c. Consistently improved 3. Sole ownership / oversight
- 17. Key Performance Indicators 17 • Lean metrics (based on relevance) – Lead time (LT) – Process Time (PT) – % Complete & Accurate (%C&A) • Other ‐ based on what problem you’re solving, customer expectations, etc: – % billed charges received w/in 30 days of service – Telephone hold times – Infection rates – % difference between estimate and actual cost – # errors (or % work with errors)
- 18. Correspondence Accuracy Gray – Highest industry quality scores Purple – Median industry quality scores Blue – Our quality scores
- 19. 19 Balanced, Visual, Clear Ownership Metric Description Owner FY12 Target Apr Total May Total Status Production Output Output in Units VS Mgr 75,000 81500 110300 Batch Deviations % Batches are Right the First time VS Mgr 80.0% 81.8% 80.5% Quoting Leadtime Days from receipt of RFQ until sent to customer Dave 5.4 6.6 6.9 Promise Date Accuracy % On time for Promise Date Dave 96.0% 85.0% 89.0% Engineering Release Time Days - receipt of PO until documentation released Vicky 4.7 5.6 4.7 Problem Resolution Number of calls to resolve customer issues Dave 2.1 2.4 2.3 Quality Quality Release Backlog # of lots waiting for release by quality engineers VS Mgr 80 99 77 ProductionCustomerService
- 20. Administrative Metrics Engineering Change Releases 36% 31% 51% 48% 37% 30% 45% 58% 76% 77% 61% 0% 20% 40% 60% 80% 100% Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 On-TimeRelease 48 39 32 39 33 36 29 19 16 11 17 0 10 20 30 40 50 60 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 J Avg.DaystoRel.
- 21. 3 Criteria for Proper Process Management 21 1. Defined and documented processes 2. 2‐5 relevant KPIs for each process a. Visually displayed b. Consistently measured c. Consistently improved 3. Sole ownership / oversight
- 25. 25 Process Owner ≈ Process Doctor
- 26. Process Owner Role • Manager or below • NOT a third party (C.I. staff or external consultants) • Responsible for overall process performance – Tracks performance against targets – Leads corrective action when negative trends appear – Leads continuous improvement to progressively raise the bar • Granted authority to cross org chart “boundaries” – And widely recognized to possess this authority 26
- 27. Value Stream & Process Oversight 27 Value Stream Value Stream Manager Process Process Owner Outpatient Imaging Sally V Scheduling & Registration Bill G Exam & Clinical Reporting Jose C Reports to physician Maria J Inpatient surgery Tonianne S Admission Tom M Clinical stay Kathleen T Discharge Mike M Billing Sylvia S Revenue Cycle Management Bruce T N/A N/A Value Stream & Process Ownership ABC Medical Center
- 28. 28 Karen Martin, President 7770 Regents Road #635 San Diego, CA 92122 858.677.6799 ksm@ksmartin.com For Further Questions Blog & newsletter: www.ksmartin.com/subscribe