I could call this post “Removing the Risk from Lean Process Improvement” because it starts with the assumption that you want to improve your processes using Lean principles, but you want guidance on how to apply those principles most effectively.
Soooo much discussion of Lean last week at the Forrester Forum and the Gartner BPM Summit. Who can argue against Lean? It is after all a focus on providing more value with less waste. Lean is a focus on eliminating waste, the original sevens wastes identified by Toyota, as well as elimination of anything that does not provide value to the customer. We all want to get rid of waste and inefficiency.
How do you identify the waste in your business process? This is harder than you might think. Sure, you probably have many anecdotes about cases that went terribly wrong, but how much did that really cost? How common is it? After all, one extreme case does not signify a trend. What you need is a quantitative measure of how much your current process inefficiencies are costing you.
This is exactly what Electro Scientific Industries, Inc. (ESI) wanted to do. They knew they had process inefficiencies for two reasons: they were having inventory problems and they were having a hard time responding quickly to customers. But what was causing this? ESI embarked on a Process Mining exercise using Fujitsu’s Automated Process Discovery. What they found astounded them. What they expected to be a 5 to 7 step process, with maybe a dozen variant paths, turned out to be far more complex in reality. They analyzed 12,000 cases that had occurred in the past 3 years, and they found 1300 distinct process paths. They found actual evidence for hundreds of cases of severe repetition, including one case where the order was changed 120 times! They were able to identify errant paths, and tell precisely how many cases had gone that way. They found specific process steps with unusually long average transition time, and could measure exactly how many cases were effected by this. All of this information was pulled out of their existing SAP system without the need to install any new software in their environment.
This is exactly what you need for a Lean Process Improvement project. Greg Mueller who headed up the project at ESI, was able to show precise measures of the cost of process inefficiency to upper management. This resulted in ample support for initiatives to fix them. Peter Schooff did a podcast with Greg on exactly how they went about this. As Greg says: “Process Discovery found 17 different ways to eliminated waste from their business process, any one of which would have more than made up for the effort of doing the discovery.” Also, see the blog post from Sandy Kemsley covering this use case.
Being able to get precise measures of waste that can be eliminated is critical, even more amazing is how quickly this evidence can be gathered. Some of the most important evidence was exposed on the second day of investigation. The data gathering was completed in the first two days. Analysis continued with what is best described as a “learning” phase: gaining a better and better understanding of what was really going on in the organization. The team would slice the hypercube different ways, isolating teams from each other to discover process patterns in different offices or for different situations. That data collection is still available today for immediate access so that when someone comes up with an innovative idea to eliminate waste, they can go back to the historical data and estimate the amount of savings that will generate. The analysis never ends, but within two weeks they were able to identify 17 specific projects to eliminate waste from the business process, along with evidence based estimates of the savings to be made.
For those of you planning Lean Process Improvement projects, visualize sitting there, one week from today, with specific evidence based assessments of where your biggest process inefficiencies were, and how much they were costing you? How much would that be worth? Would that help you get funding and support for your project? Sure it would. You owe it to yourself to at least investigate what a process mining session might be able to do.
Fujitsu has been offering this service for about a year. The biggest barrier is that is it just so hard to believe that the results are possible. It seems too good to be true. I admit, if I had not seen the results myself, I would be skeptical. But I have seen the results (1, 2) which are nothing short of amazing. Anyone considering process improvement will be wise to learn about them as well. Informing yourself up-front with quantitative measures of the waste in your current processes, will eliminate much of the risk in a Lean Business Process Improvement program.