You may have heard the term “Continuous Improvement” floating around among the buzzwords in your office, or maybe encountered it in business journals or other outside reading. It’s often used to describe how a manufacturer has completely turned around the quality level of its products, so you might think it’s a concept whose application is limited to those companies that “make stuff”. I’m here to tell you, though, that your processes might be ideal targets for Continuous Improvement projects. Not that eBusiness or EDI itself is an inefficient, mistake-riddled, wasteful process, but more because of the nature of how it is executed and the cross-section of people involved in it.
What exactly is “Continuous Improvement” or “CI”? According to Wikipedia, as good a source as any for this purpose, “A continuous improvement process (CIP or CI) is an ongoing effort to improve products, services, or processes. These efforts can seek "incremental" improvement over time or "breakthrough" improvement all at once. Delivery (customer valued) processes are constantly evaluated and improved in the light of their efficiency, effectiveness and flexibility.” Trust me, there are as many definitions of CI as there are of EDI or electronic commerce, and just as with those terms it’s not as important to select one to ‘believe in’ as it is to just understand the basics of the concept.
After attending a few training sessions, participating in several CI projects, sponsoring a couple, leading one, and having my people involved in many, I view CI as both a philosophy and a set of tools used by businesses to improve quality. It may have been born and raised in manufacturing, but it’s most definitely applicable to processes across the business. The tools you’ll often hear about are approaches like 6 Sigma, Lean, and Kaizen. You can find a plethora of information about these concepts on the web (http://www.leanblog.org/ is a nice practitioner-oriented blog, or check out “lean manufacturing” and “six sigma” in Wikipedia for other sources). For an in-depth view of the origin and practice of lean at its most famous proponent, take a look at the book “The Toyota Way” by Jeffrey Liker.
I won’t bore you with details about how CI projects are actually run, the relative advantages of Lean vs. 6 Sigma, or what’s the best strategy to use in development of the value stream. You can literally read about CI for weeks, losing yourself in its different methodologies, processes, and approaches. I would, though, like to point out some potential opportunities you may have in your shop and also make some practical recommendations you could use.
I’ll share just a little bit of all of the available information on the topic of Continuous Improvement. Why just a little? Well, unless you’re at a large company that’s already heavily into CI, you need to start somewhere. Maybe you work at a smaller concern and you’ve never heard of this stuff, or maybe your company uses 6 Sigma or Lean on the production side, but hasn’t leveraged it in your area. If either of those are the case, and if you’d like to ‘get into it’ a bit without totally ditching your job and jeopardizing your current employment status, here’s what I’d recommend:
- Do some outside reading. You don’t need to get into great depth, but at least learn some of the concepts and what CI can do.
- Try to find out where your company is with respect to CI. Do you have a ‘Quality” department? A 6 Sigma ‘Black Belt’ on staff? Does your manufacturing or production team use CI tools? You don’t want to step on toes, and by the same token there may be more help and information available on the topic than you expected.
- Try to identify a ‘pilot project’ (see below for ideas) where you think you can improve cycle time, eliminate errors, reduce variability, or get rid of waste, and then try to sell it to whoever can provide the approval and all-important time needed to get it done. Note that almost all CI projects are cross-functional, which means that representatives from your internal customers, suppliers, process owners, and experts from the financial, IT, and other support areas may need to be involved. In a small company, that may be just another person or two, or in a large business the team can become quite extensive.
- Work through the process, whichever one you select based on your research, a step at a time. The first one will take a lot of time, subsequent ones will proceed more smoothly.
At my previous employer, the EDI process was a fertile source of ideas when we began to look at CI. I’ve spoken in the past about the complexity we faced on the customer side with our multi-channel strategy, distribution network, the qualification process for new customer projects, the types of customers and platforms we dealt with, and so on. We identified many sub-processes, supporting processes, and procedures that we could approach to eliminate waste (ie. non-value added steps), reduce wait time (for example, the paper-based approval process originally used for project requests) and so forth. What I truly felt was a pretty solid, optimized process was improved immeasurably through the use of CI-based tools and processes. Even our supplier-side work, a far more straightforward process, was fine-tuned using CI tools. Based on some areas we looked at, here are a few things to consider when you approach step #3 above:
- Look at what causes you or someone else in the organization to manually fix something that should flow completely electronically. Common problems might occur with ASN matches vs. outbound POs, inbound invoices not matching PO data, data missing from inbound transactions that cause ERP hiccups, and things of that nature. You may not have complete visibility into these things, so it may require some calling around or the use of your internal contacts to discover them.
- Do your customers complain about aspects of your program? Does it take too long to implement a new project? Are there unnecessary handoffs or manual processes adding time to the process? Do they complain about the quality of the data or content of your transactions? One significant experience we had was related to outbound invoices causing errors for our customers when matched against their PO data. Our investigation showed that in the vast majority of situations, the errors were the result of situations where the customer placed orders manually (via phone or walk-in at a branch location) and the information required for the match was either not provided or was incorrectly provided to us, thereby causing the invoices to fail when the customer received them. Significant changes to our processes resulted from the effort we put into analyzing this problem, with a resulting huge improvement in customer satisfaction and a nice impact on our DSO measurement.
- Don’t forget to recognize the true end-to-end nature of the process you support. Your specific piece may be the creation of a map, but other processes upstream and downstream are also involved. This is where the development of the SIPOC (suppliers, inputs, processing, outputs, and customers) document, which you’ll encounter this in your research of CI, is so helpful. In our case, for a customer side EDI project, the request would originate in the field with a seller, be evaluated by an ebusiness manager, prioritized by a cross functional group, and project planned, executed, and tested by my team. Additionally, our legal team would be involved if new marketplace relationships were established and our product information group would prepare any data files required by the customer. Orders would be fed into SAP and a team at our service center would handle order errors and rejections due to data issues. When you examine the end-to-end nature of a project like this, you recognize that all of these participants could have a part in the problem you’re attempting to address.
I mentioned earlier in this that Continuous Improvement is also a philosophy. By that I mean embedding the concepts of CI in your mind, basically training yourself to look at existing processes and problems with the idea that they can be improved, they can become more efficient, and that you’ll benefit accordingly. It also means that new processes will be designed in a different way, using the concepts of CI to develop efficient, error-free, reliable ways of doing things right out of the box. Once you’ve experienced a few projects, you’ll begin to incorporate CI concepts into your way of doing things.
I’m a big believer in the power of Continuous Improvement. If you get the chance, put CI on your list of New Year’s resolutions and try it out- it may be something you’ll look back on at the end of 2011 and really be happy about.