An efficient process is like a well-oiled machine. Each part works as it should, and everything flows seamlessly together.
While this is the goal, it isn’t always the reality. Businesses often stay stuck in a cycle of inefficiency because they fail to update and innovate their processes. They stick with these processes because they’re familiar, ignoring the warning signs that their processes don’t deliver the results they once did.
Knowing how to improve process efficiency is key to long-term business success. It’s especially important if you’re thinking about starting digital transformation or an ERP implementation. Today, we’re sharing how you can get started with process improvement.
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What Makes a Process Efficient?
Before we dive into how to increase process efficiency at your organization, let’s start with the basics. What makes a process efficient in the first place?
In short, efficiency measures the amount of effort required to produce an output. If it takes your team members an enormous amount of time to produce one unit and you need to sell many units to be profitable, then your efficiency is lacking. On the other hand, if you can successfully produce many items without sacrificing quality, then your efficiency is high.
While it sounds simple enough in theory, it can be difficult to accurately measure your efficiency rate. Often, companies don’t realize it’s slipping until they’ve been working counterproductively for a while.
Thankfully, there are ways to get back on track.
4 Tips for Improving Process Efficiency
1. Use a Payoff Matrix
The average organization could have hundreds or even thousands of individual processes that occur during a given workday. It usually isn’t financially or operationally feasible to overhaul them all at the same time.
We recommend identifying the core processes you want to update and scheduling those improvements based on need. You can do so by creating a payoff matrix.
Start by defining the key process improvements you want to make. Then, rank each one by value on a scale of 1 to 10. Next, discuss how difficult it would be to improve each one, using the same scale.
Using this data, create a matrix and divide it into four quadrants. In one quadrant, you’ll find the processes that are the most valuable and the easiest to improve. Start here and prioritize these improvements.
For now, avoid tackling the processes that fall into the “low-value and difficult to change” quadrant. It’s best to reassess at a later date to see if you need to make those adjustments.
2. Conduct Business Process Reengineering
Business process reengineering is about understanding pain points, root causes, and goals for your various processes and redesigning the processes that are most important.
If you’re about to begin any type of enterprise software implementation, you may decide to conduct process reengineering to see what you need to change before you automate anything. As you go through each high-level process, you can identify where the weak areas are. This will help you define your future state and decide which features you need in your ERP system.
3. Adopt a Culture of Continuous Improvement
While business process reengineering can be helpful if you’re about to embark on an ERP implementation, it can also be costly and time-consuming. To ensure that you don’t have to do it on a regular basis, consider shifting your company culture to one of continuous improvement.
This means that instead of looking for ways to improve process efficiency once every ten years, your employees are always on the lookout for opportunities for improvement.
For this strategy to be successful, employees must understand not only how their processes work, but why they’re in place and what ultimate purpose they serve.
This may require training if you haven’t covered these topics already. This can be a tricky concept to navigate, so try using a visual breakdown like the SIPOC diagram, which stands for:
- Supply
- Input
- Process
- Output
- Customer (i.e., downstream employee)
Employees should know that any time they want to make a change, they must make sure the “customer” supports and approves it. This establishes process governance.
If team members can work collaboratively to make a minor change to improve their department, they may not need senior management’s approval. However, if it’s a big change that affects multiple stakeholders, approval and oversight should be required.
4. Share Changes With the Team
Once a team has built out a more efficient process and gained the necessary approvals, it’s time to document it. Create a process flowchart that clearly shows what the new steps include, and share it with the rest of your team.
As employees view the chart, it will be easier for them to understand what the change entails and how their role fits into the new process. Leave plenty of time for them to ask questions and be prepared to explain why the change was necessary and what individual benefits the new efficiencies will bring.
Learn How to Improve Process Efficiency From the Experts
If components aren’t working together as they should, it can affect every aspect of your business, from customer satisfaction to team morale.
You don’t have to stay stuck in a cycle of inefficient workflows. When you know how to improve process efficiency, you can take the necessary steps to keep your operations running smoothly. Along the way, our business process reengineering consultants are here to help you tackle every part of process improvement. Contact us below for a free consultation.
