Enabling Operational Excellence
Enabling Operational Excellence
Enabling Operational Excellence
Enabling Operational Excellence

TURNING OPERATIONAL KNOWLEDGE & COMPLIANCE INTO A COMPETITIVE EDGE

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Posts Tagged ‘Lean’

Are All Processes Really Like Manufacturing/Production Processes?

If you examine process thinking, you find it is deeply rooted in 20th century blue-collar manufacturing/production processes, starting with Federick W. Taylor (pig iron), Henry Ford (autos), Toyota Production System (autos), Six Sigma (Motorola and General Electric), Lean, and offshoots. In every case, the focus is on tangible products. But what if your products are intangible? You’d be excused for thinking that the carry-over from the manufacturing/production world is not all that it should be. To those who dissent, I say prove me wrong. In the 21st century, processes of interest are increasingly white-collar and knowledge-intensive. There’s a product, of course, but it generally has more to do with some transition in the state of a significant resource (not infrequently money) than the assembly of something new from physical parts. Rather than efficiency, machines and inventory, their operational focus is consistency, compliance and decisions.  Typical examples include …
  • Finance: Accepting and funding a mortgage.
  • Insurance: Extending coverages and adjudicating resulting claims.
  • Taxation:  Evaluating financial records and assessing taxes.
I call such processes commitment/dispersal processes. (See basis definitions below.) Commitment/dispersal processes are always about:
  • Making commitments and managing dispersals of resources (money, time, people, etc.).
  • Satisfying obligations (often contractual or regulatory), making informed decisions, and responding continuously to changed circumstances.
For such processes you must know what the rules are; otherwise, you cannot identify appropriate inputs. In short, such processes take you directly to best practices for business rules and decision engineering as a basis for process renewal and innovation. What’s in between manufacturing/production processes and commitment/dispersal processes? I suspect there’s a wide spectrum of processes – and that many of them are often not much like manufacturing/production processes either. ~~~~~~~ Basis definitions from Merriam-Webster Unabridged Dictionary … [commitment]  3a(2): an engagement by contract or purchase order to assume a financial obligation (as to accept goods at an agreed price, to pay for subscribed stock, or to make a mortgage loan upon the completion of a building) [disperse]  2a: to spread abroad from a center of supply or control : DISSEMINATE ~~~~~~~ www.BRSolutions.com

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Commentary on “A 10,000-foot View of the Business Process Space”: Guest Post

My December 8 blog post about classifying business process approaches generated an avalanche of responses. See the 2×2 matrix itself (from John Mansfield of Fidelity Investments) and the stream of Comments about it on http://www.brsolutions.com/2014/12/08/a-10000-foot-view-of-the-business-process-space-is-it-correct-is-it-complete/. In the guest post below, Brett Champlin shares his evaluation of the matrix. ~~~~~~~~~~ There are many things wrong with the matrix. 
  • Lean and Six Sigma are both process improvement methodologies and are frequently combined as Lean Six Sigma. So they can all be subsumed into a category of process improvement methods.
  • The matrix leaves out classic process redesign methods which are very commonly used. These methods go beyond improvement methods to respond to things like automation, new products, M&A, etc. where the basic process is modified or extended to accommodate some new situation.
  • Process improvement and redesign methods along with reegineering (aka process transformation and/or innovation and/or reinvention) are all process change methods. Change management should certainly accompany them all.
  • The matrix also leaves out Business Process Management as an all-encompassing discipline that deals with all types of process change as well as strategy, monitoring and measurement, and process portfolio management.
  • It also leaves out Customer Experience Design, which over the last several years has been incorporated into many BPM toolkits as a precursor to any process change effort.
The dimensions mapped in the matrix are really those that are the core focus of the two improvement methods: Six Sigma focuses on defects and variation, while Lean focuses on waste and flow. In those terms, the diagram is more or less accurate, but it hardly covers the Business Process space in its entirety. I have used the matrices in Figures 1 and 2 (below) for that purpose.  Jeston & Nelis presented several 2×2 grids mapping different process change methods relative to time and cost and degree of change. These grids give a different perspective and are more complete, but still don’t cover the entire business process space. See Figures 3 and 4 (also below). Most of these types of analyses are continuations of industrial engineering perspectives. They are fine if that aligns to your needs, but today many businesses are looking beyond ‘faster, better, cheaper’ as the only way to measure their processes. These days many businesses take control of quality, waste and flow as a ‘given’. They are looking at other things such as customer attraction/engagement/retention, business agility (not IT agility), strategic positioning, etc. All of these perspectives are not easily represented in a simple 2×2 grid. Figure 1.                     Figure 2.                       Figure 3.                         Figure 4.

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A 10,000-foot View of the Business Process Space: Is It Correct? Is it Complete?

                      I love this nifty diagram I first saw recently by John Mansfield of Fidelity Investments. A quality vs. waste matrix seems to nicely position the major approaches in the BPM space – Continuous Improvement, Six Sigma, Lean, and Re- engineering. As useful as the diagram seems, it raises a plethora of questions, including the following:
  • Is it Correct? Does it oversimplify? Does it mis-position any of the major players? If so, how?
  • Is it Complete? Does it leave any important players out? If so, which ones? Is a two-axis view sufficient for covering the space? If not, why not?
My current view is that a two-axis view of the space is probably not sufficient for covering the space. It’s difficult to put my finger on what exactly is missing, but I suspect it’s a big deal. I’ve put the question on my list to explore for 2015 and beyond. At least I now have a tentative platform for a deep dive.

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