Throughout the 20th century, manufacturers – and more problematically, service companies – have been working towards that state of nirvana where all processes are as simple and uniform as possible. Why? Because received wisdom has it that this is the cheapest way to do business.
That’s true – if your demand looks like this:
Consistent demand, simple processes. Hurray!
A request comes in for Widget A, and Widget A goes out.
Does your demand look like that? Because in our experience, demand tends to look a little more like this:
Complex and variable demand
The variation in demand could occur with requests for product feature tweaks, special circumstances around a standard request, or perhaps a need for a product or service that you don’t typically provide (or that doesn’t exist in the market – and therefore a commercial opportunity).
When you try to apply simple, standard processes to demand that varies like that, you get a result that might best be represented like this:
Complex demand fed into standard processes
Messy. But more importantly, expensive. All of that ‘mopping up’ that has to be done as a result of badly-placed simplification is costing you time, money and customer goodwill – you just don’t see it because your measures don’t demonstrate it.
That’s the good news. It’s good, because it means you have scope to start reducing costs in all kinds of places, just by thinking about the work in a different way.
Here’s a quick overview of how to do it:
- Get meaningful data on what’s happening predictably.
Measure the types of demand that are placed on the operation, not just activity. Get a large enough sample in order to have confidence in which are common and which aren’t.
- Be selective in standardisation – automate the truly consistent.
Only standardise where the data shows that the input and output of a given process are consistently predictable. That doesn’t mean there can’t be more than one input or ouput type, or that you can’t have multiple different standardised processes to meet a lot of different but predictable demands.
However, it helps you avoid the trap of applying a ‘one size fits all’ approach to varied and complex demands. Further to that…
- Remember that machines don’t think.
Review your automated processes to see how many ‘exception’ cases fall out of otherwise standardised work. It could be higher than you think – in which case you could actually save the time it takes to handle these twice by having a human handle them the first time.
- Chaos doesn’t need to reign.
Removing a standardised process doesn’t mean that a blank canvas and wild creativity has to take its place.
Once your front line teams have good data on the demands that don’t fit well into standardised processes, with some guidance they can still take an organised approach to develop their own alternatives and share the best ways they’ve found to handle them.
Just remove the obstacles that handcuff them to the old standardized version, whether that’s process documentation, system constraints, needless authorisation steps and so on.
- Refine the design – and keep measuring.
Got an idea for improving your standard process? Set up a controlled experiment to prove scientifically whether it’s more efficient in practice. Only implement major changes across the operation once you’ve got some good data to show that it’s better for your customers and cheaper for you.
As you start to design more and more of your operation to accommodate predictable variation, you will inevitably see complaints, duplication and cost go down – while your team’s empowerment and motivation levels go up.
Need help? We can work with teams to help this process transformation happen, or train business leaders to do it for themselves. Contact us for a quick chat about your operational challenges.
