To stay competitive in today’s market, it’s crucial for growing businesses to prioritize the efficiency of their operational processes by strategically leveraging their available resources.
Inefficient operations often cost organizations valuable time and money, moreover, they can diminish the quality of a company’s product and service offerings. To keep your customers satisfied and increase profitability, consider implementing business process optimization methodologies and techniques.
Optimizing business processes focuses on better utilizing organizational resources, consequently, making workflows more logical and efficient. The goal of this optimization process is to reduce company spending, eliminate wasted resources, and streamline operations.
Business process optimization strategies are used by successful organizations to optimize their existing processes so that they can improve their bottom lines, eliminate workflow redundancies, identify operational bottlenecks, and reduce waste.
Business process optimization is often facilitated using various project management methodologies such as Six Sigma, Lean, and Total Quality Management (TQM). Though the guidelines of these methodologies differ, they all can assist companies with the implementation of organizational change.
In this article, we will explore the benefits of business process optimization, how to use various project management methodologies to optimize workflow processes, and how to use tools like MindManager® to visualize the process of business optimization.
Benefits of business process optimization
Process optimization reveals gaps and weaknesses in your workflows. By analyzing the efficiency of existing business processes, organizations will be able to transform their company for the better:
Improve employee productivity. Decreased employee productivity rates are often caused by a lack of clarity. If a team does not know what the most optimal way to complete a workflow is, then they will likely detach themselves from company initiatives and produce low quality work. Optimizing company processes enables organizations to increase employee productivity by getting rid of redundant tasks that contribute to employee burnout.
Eliminate company waste .Companies that do not seek to continuously optimize their processes often produce a large amount of waste. In this context, waste can be described as unnecessary or redundant tasks within a process that do not contribute to the quality of the deliverables or the efficiency of the process itself. By practicing business process optimization, organizations will be able to eliminate any wasteful activities that involve unnecessary usage of company resources. Companies can then allocate those resources to other company initiatives that make a bigger impact, such as producing new product or improving service offerings.
Identify project bottlenecks. Business process optimization uses various philosophies and methodologies to identify what is working well in an existing process and what is not. Identifying project bottlenecks such as communication issues or outdated technologies enables organizations to adjust their operational approach for the better. This typically involves eliminating or altering certain tasks within a workflow and restructuring how process resources are allocated to make business operations more efficient and effective.
How to use project management methodologies to optimize organizational processes
If you are wondering how to begin optimizing your organizational processes, start by using one of these popular project management methodologies:
Six Sigma is a project management methodology that helps companies standardize their workflows to amplify operational efficiency. This methodology follows the Define, Measure, Analyze, Improve, and Control (DMAIC) model to optimize business processes.
The DMAIC model uses five distinctive phases that must be completed to optimize an operational process:
Phase 1: Define. The first phase of this cycle requires teams to make a clear statement that describes an existing process which needs to be optimized. The current state of the process and the scope of the improvements to be made should be clearly defined. Teams can use process visualization tools such as workflow diagrams to map out what the most optimal version of the process at hand looks like.
Phase 2: Measure. Since DMAIC is a data-driven approach to process optimization, baseline measurements should be taken to accurately reflect the current metrics of the process you wish to optimize. Important process metrics to record include the duration of a process, the overall cost of a process, the error rate or defect rate, and so on. These baseline measurements will be used later in the cycle, post-optimization, to determine if the changes implemented are truly optimizing the process at hand.
Phase 3: Analyze. At this point in the cycle, teams should conduct a root cause analysis to determine the underlying reason why a specific business workflow is not operating at full efficiency. In order to truly visualize the structure of a company process, teams should outline it using a process map. This way, they can better visualize process bottlenecks and identify activities that can be altered or eliminated to improve the entire workflow.
Phase 4: Improve. Only after an organizational process has been thoroughly analyzed and a logical plan has been established to optimize the process can teams begin to implement their suggested changes. Any risks associated with implementing changes to an existing process should be considered and monitored, so that teams can swiftly address these risk factors when they occur.
Phase 5: Control. The final step in this cycle is to make sure that the changes implemented to optimize a certain process do not degrade over time. At this stage, teams should compare the baseline measurements taken at the beginning of the cycle to the metrics gathered post-optimization. This helps teams determine if the changes made during the DMAIC cycle truly have made the process at hand more efficient.
The Lean methodology is a business philosophy that aims to help organizations optimize their business practices while eliminating waste.
The Lean methodology specifies eight different types of waste activities that companies can eliminate to optimize their operational processes:
Defects. Wasting time by checking and fixing product defects or service failures.
Overproduction. Producing a larger number of materials than necessary to meet customer demands.
Overprocessing. Performing redundant task assignments or completing additional task assignments to fix poorly designed products or services.
Waiting. Interruptions that occur during business processes or waiting times in between the tasks within an existing process.
Inventory. Stockpiling materials that are not needed to process current product or service orders.
Transportation. Unnecessarily transporting products.
Skills. Underutilizing the skills and knowledge of company employees.
Lean thinking starts out with the customer in mind, optimizing processes by identifying and eliminating activities that do not add value from business practices. To do so, the Lean methodology specifies five core principles when facilitating company workflows:
Identify value from your customer base. Prioritizing the value when facilitating business operations is one of the most important aspects of the Lean philosophy. By tracking value creation over the duration of a business workflow, organizations will be able to understand what their customers want and need and how they can provide value to them. Teams can identify value by soliciting answers from customers to determine whether your company is doing a good job of delivering value to its customer base. This can be done by holding customer interviews, sending surveys to customers, or holding brainstorming sessions with your team to determine the value a process delivers to customers.
Map out the value stream of company processes. Once your team has a strong understanding of what your customers value, they can begin the value stream mapping process. Value stream mapping is the process of creating a visual representation of a company workflow to identify non-value adding activities that can be eliminated to strengthen an operational workflow’s value stream. When creating a value stream map for an existing process, every step should be mapped out in detail to expose waste activities for elimination.
Develop a continuous workflow.This stage requires teams to examine the process as a whole as well as through the lens of individual steps, eliminating any activities that do not contribute value. In addition, all stakeholders involved in the process need to work together to determine how company resources can be better utilized in the process. By the end of this step, your team should have a clear understanding of which aspects of a company process are to be changed.
Create a pull system. The concept of a pull system is quite simple. Pull systems enable teams to manage their resource flow by limiting work in progress, helping team members to focus on the work at hand. Once a task is completed, team members then pull the next task from the backlog in order of priority. By creating a pull system for organizational processes, businesses will be able to deliver work items at a much faster rate, increase employee productivity, and reduce the number of resources needed to facilitate the process at hand. In other words, creating a pull system enables teams to logically optimize the flow of company processes and resources.
Practice continuous improvement. The Lean philosophy states that processes can always be improved because no process is perfect. Therefore, it’s important to continuously seek out opportunities to optimize organizational workflows over the lifespan of your company. This will ensure that your business is constantly working to offer additional value to both its customer base and its employees.
Total quality management
Total quality management (TQM) is a framework that requires the entirety of an organization to focus on continuous improvement over a long period of time. It focuses on optimizing company workflows to enhance the quality of the goods and services an organization provides to its customers.
In TQM, there are eight distinctive principles that help teams better satisfy their customers, produce fewer product defects or service failures, and cut operational costs:
Focus on customers. TQM acknowledges that the quality of the products and services a company produces is determined by the customer. Therefore, the only way to understand which processes are producing quality products is to solicit customer feedback in the form of return rates, customer reviews, or customer surveys. By making sure business processes are customer-focused, companies will be able to eliminate unnecessary task assignments, only allocating resources to tasks that provide value.
Prioritize communication. In order to optimize business processes, employees must be able to communicate effectively. Each team member within a company should be aware of the strategies, methodologies, and tools used to effectively achieve company goals. Establish official channels of communications between internal departments so that all employees better understand how they can contribute to overarching company goals. This will not only boost team morale, but it will also enable teams to more accurately measure the effectiveness of company processes and collaborate on ways to optimize organizational workflows.
Practice continuous improvement. Continuous improvement is a key aspect of the TQM framework. Teams should constantly look for new, innovative ways to better utilize resources, provide value to customers, and cut operational costs. Doing so empowers organizations to enhance their performance, increase their adaptability, and stay competitive in an ever-changing marketplace.
Encourage employee engagement. In order to optimize processes, organizations must ensure that their employees are committed to producing quality work. Employees should understand which task assignments they are responsible for as well as the overall vision of workflows. This will empower employees to actively contribute to a process, finding ways to streamline task completion and creatively solve problems as they arise.
Utilize fact-based decision making. By gathering and analyzing company data, teams will be able to make better business decisions. Fact-based decision making requires teams to audit their databases, use valid data analyzation and visualization methods, and make decisions using both their experience and their company data. Utilizing fact-based decision making enables companies to optimize their processes in a strategic way, using process metrics as a guideline for whether a given process is functioning most optimally.
Use a systematic approach. To increase the efficiency of business workflows, organizations should manage multiple processes within their company as a complete system. This system has one purpose: to achieve company objectives in the most efficient way possible. By using a systematic approach to company operations, businesses will be able to implement process changes that improve employee performance and operational efficiency.
Create an integrated system. Most businesses are made up of a variety of internal departments that have their own functionalities in the workplace. TQM emphasizes that organizations use an integrated approach to workplace operations in order to break organizational silos. An integrated system interconnects different internal departments so that every team member within a company has a good understanding of company policies, standards, and processes. Organizations should utilize flowcharts and other visual aids to help employees understand exactly how they contribute to company processes. This will streamline organizational workflows and increase employee productivity by empowering company staff to take accountability for their task assignments.
Make sure your organization is process centered. In TQM, adhering to set processes is very important. Teams should outline a visual plan of action for each company process. This helps teams understand what activities in a process must be completed and how to complete those activities most efficiently. By adhering to company processes, teams will be able to evaluate the impact company processes have on customers and how to optimize them to produce better quality products or services.
How MindManager can be used to optimize business processes
It’s reported that 90% of information transmitted to the brain is visual. By leveraging business process visualization tools such as mind maps, organizations will be able to better understand how their processes are facilitated and identify opportunities for process optimization.
MindManager is a mind mapping software that helps business leaders optimize their organizational processes by providing them with a wide variety of templates that can be used to help teams better visualize business processes.
With MindManager, teams can seamlessly collaborate on value stream maps, process maps, PDCA cycles, workflow diagrams, and other helpful project management diagrams to eliminate waste within company processes and find ways to better allocate resources.
MindManager’s co-editing features enables teams to edit their mind maps simultaneously, streamlining the time it takes to create a comprehensive business process optimization plan. MindManager also enables teams to customize and save their templates for future use, saving valuable time that can be used to implement changes which will improve the overall efficiency of their organization.
Learn how to use MindManager’s visual diagramming tools for business process optimization.