Article of the week 6 – 2023

Process optimisation as a success factor for the company

Process optimisation can be an important success factor for a company. It can help to:

– Increase efficiency: Optimised processes can speed up procedures, save time and resources and increase productivity.

– Reduce costs: Shortening processes and minimising errors can improve a company’s overall cost balance.

– Increase quality: Process optimisation can help reduce errors and defects and improve the quality of products and services.

– Satisfy customers: Optimised processes can enable faster and more efficient handling of customer requests and needs, which can lead to higher customer satisfaction.

– Create competitive advantage: Optimised processes can differentiate a company from its competitors by making it faster, more efficient and more cost-effective.

Overall, process optimisation contributes to better business performance and competitiveness by streamlining operations and reducing costs.

Challenge of optimal processes in companies

But how can the optimisation of processes be brought about and made sustainable? Often, we come across companies where precisely this optimal process management is not in place. The reason for this are obstacles that occur in operational reality:

– Lack of overview: It can be difficult to understand and grasp the entire process landscape of the company in order to identify potential optimisation opportunities.

– Resistance to change: Employees and departments may resist changes in existing processes, which can make it difficult to implement optimisations.

– Lack of resources: Implementing process optimisation may require time, money and other resources that may not be available.

– Complexity of processes: Some processes may be complex and interdisciplinary, requiring careful analysis and optimisation.

– Lack of standardisation: Without standardised processes, it is difficult to make consistent measurements and comparisons of process performance.

– Inactivity of data: Outdated or incomplete data can lead to processes being optimised incorrectly.

To overcome these potential obstacles, it is important to take a systematic and data-based approach to process optimisation, working closely with all affected departments and staff.

All processes are also subject to continuous „ageing“, i.e. they deviate from the optimum over a period and deteriorate (again). This „sustainable“ process optimisation is another challenge for companies, because it often means a high use of (human and operational) resources, which are known to be always scarce.

Reflection – how important are processes for us?

Therefore, every company should become aware of the following important aspects regarding its own processes: 

– How can processes and their changes be dealt with successfully in a meaningful and sustainable way? 

– What effort is necessary and justifiable? 

– Which measures and methods for checking and optimising the resources of time, costs and quality must be anchored in the organisation?

In order to optimise processes, some proven methods are used. Within the framework of a framework, these are reliable „instructions“ to bring about the success of optimisation:

– Six Sigma

– Lean Management

– Total Quality Management (TQM)

– Process-oriented cost accounting (ABC)

– Theory of Constraints (TOC)

– Root cause analysis (RCA).

Each method has its strengths, weaknesses and special features. However, all methods have one thing in common: it takes a focused and consistent look at processes to identify potential for optimisation and it takes proven tools and skilled staff to (repeatedly) leverage potential for improvement.

Six Sigma, for example, is a data-based management system that aims to improve processes so that they operate with a maximum error rate of 3.4 errors per million opportunities. It uses methods from quality management and statistics to analyse and optimise processes. The goal is to achieve higher efficiency, quality and customer satisfaction in every process.

Lean management is a process optimisation method that focuses on minimising waste in a company. It aims to simplify processes, increase efficiency and reduce costs by identifying and eliminating redundant steps. Lean management uses a customer-centric approach and constantly works to improve processes to maximise value for customers.

Total Quality Management (TQM) is an approach to continuously improve quality in a company. It aims to make all employees aware of the need to improve quality and to involve them in quality development. TQM uses methods from quality management and places great emphasis on customer satisfaction and the continuous monitoring and optimisation of processes. The aim is to improve quality at all levels of the company and to maintain it in the long term.

Activity Based Costing (ABC) is an effective method of cost analysis that allocates the costs of a product or service to the activities required to produce or provide it. It aims to gain a better understanding of the actual costs of a product or service and thereby make cost optimisation decisions. ABC uses a systematic approach in which all activities are recorded, and costs are allocated to the respective activities in order to obtain an accurate cost picture.

Theory of Constraints (TOC) is an interesting management system that focuses on identifying and overcoming constraints in a process. It aims to increase the efficiency and performance of processes by identifying and removing bottlenecks. TOC works continuously to optimise processes to maximise bottleneck utilisation and improve overall performance.

Root Cause Analysis (RCA) is a method of identifying the root cause of a problem or malfunction. It is used to investigate problems thoroughly and determine the true root cause rather than treating superficial symptoms. Data is collected, evaluations are carried out and possible causes are identified to then determine the true cause. This method can be used to improve processes and products by avoiding errors and increasing efficiency.

Of course, the list of methods mentioned above is not complete. There are many other ethical possibilities of methodical process analysis, which I will only mention here and not go into further detail:

  • Business Process Reengineering (BPR)
  • Kaizen
  • Continuous Improvement
  • Value Stream Mapping
  • Design Thinking
  • Etc.

There is not „THE“ right method for process optimisation. 

There is no „best“ method of process optimisation, as each method is designed for specific processes and needs. The choice of the best method depends on many factors, such as the type of process, the goals of the company and the resources available. It is important to understand and evaluate the different methods to determine the best method for individual needs. An integrated approach that combines different methods can sometimes achieve the best results. Similarly, the optimal framework for using the methods should be combined with this.

Iterative procedure has proven itself

If a company must re-initiate the optimisation of its own processes, the following (iterative) procedure in 6 rough steps has proven to be successful:

1. analysis: which processes (process types) exist, which are particularly relevant in terms of company profit/customer satisfaction?

2. focus: identification of the first most important processes to be optimised;

3. benefit calculation: estimation of how the optimisations affect KPIs and results;

4. equipment: definition and provision of resources to be able to carry out the optimisation (experts, staff, time, material resources);

5. time planning: in which time frame the process optimisation will be carried out.

6. tool: Which software tools are needed, are suitable and can be „procured“;

Furthermore, it makes sense, at least for the first optimisation steps, to possibly obtain external support from experts, since existing employees usually have important operational tasks within the company and the work of process optimisation is not always given the necessary attention. The expert can improve the focus of the responsible employees on the processes.

Michael Fürst –  Senior Consultant


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