Business process re-engineering and systems design - implementation

A practical guide to business process mapping, systems design & implementation with staff training Using Six Sigma’s DMADV methodology Optimise -GB

Knowledge base Six Sigma: seeks to improve the quality of goods and services by identifying and removing defects (errors) caused by variation of working. Six sigma simply means 3.4 defects per million opportunities (DPMO) DMADV is a six sigma methodology to ensure that new business processes and systems are aligned with one another and the requirements of the end customer. Optimise -GB

Knowledge base DMAIC is a six sigma methodology to improve the quality of products and services by reducing defects through business process re-engineering Optimise -GB

Knowledge base You can use DMADV for: New systems software New systems hardware New business processes New products to market New services to market You use DMAIC methodologies for Improving existing processes Optimise -GB

M A D V Process, policy, systems & training D Optimise -GB

M A I C Process, policy, systems & training D Optimise -GB

DMAIC to improve and control existing business processes DMADV to create new business processes / systems M A D V Process, policy, systems & training D Define Measure Analyse Improve Control Design Verify Optimise -GB

Let us run through a practical guide to implementing a new purchase order system that links into accounts payable and banking M A D V Process, policy, systems & training D Optimise -GB

Produce an A2/3 project charter to describe what the project is about and what it is to deliver M A D V Process, policy, systems & training D Optimise -GB

Design (Workshop event) Agree what the objectives Identify the people to be involved Agree how the deliverables will be measured and signed off Agree Critical To Quality Factors Build a high level process map M A D V Process, policy, systems & training D Optimise -GB

Process Improvement Stakeholder Identification! What external stakeholders are there? D M A I C Optimise -GB

Process Improvement Stakeholder Identification! For our example: Operations Finance Procurement IT Policies and control D M A I C Optimise -GB

A project charter should consist of: Vision, why are we doing this? Objectives for the project KPI’s of current business (if available) Critical To Quality requirements Issue logs to resolve Business case to weigh up benefits and costs Version / change control to monitor changes to the programme’s direction Please note that you can obtain a free template from www.optimise-gb.com M A D V Process, policy, systems & training D Optimise -GB

Vision: To minimise the number of handovers between people and department for purchase orders, invoices and payments CTQ: Errors to be minimised between purchase order and suppliers being paid For our example: M A D V Process, policy, systems & training D Optimise -GB

Objectives : To automate payments from purchase order receipts, reduce FTE’s by 75%, reduce paper work that goes missing by 100% Current issues: Paper work going missing Invoices not authorised Suppliers paid too early or too late Amounts paid is different from invoice value For our example: M A D V Process, policy, systems & training D Optimise -GB

Analyse (Workshop event) Draw out the process Identify the flows of information Understand the trigger points and policies / Service Level Agreements (SLA’s) Review and add to the issues log M A D V Process, policy, systems & training D Optimise -GB

Generating solutions: Good practice Shout out as many ideas as possible Do not discuss ideas at this stage Questions should only be asked for clarification purposes Everyone should suggest an idea No judgements or criticisms should be made Do not talk over others M A D V Process, policy, systems & training D Optimise -GB

Identify the solutions Solution 1 Use post it notes and put the solutions on a blank wall Solution 2 Solution 3 Solution 4 Solution 5 Solution 6 Solution 7 Solution 8 Solution 9 Solution 10 Solution 11 Solution 12 Solution 13 Solution 14 Solution 15 Solution 16 Solution 17 Solution 18 M A D V Process, policy, systems & training D Optimise -GB

...Group the solutions to identify duplications Group the post it notes in an affinity diagram to identify common themes Theme 3 Solution 12 Solution 18 Theme 2 Theme 1 Solution 1 Solution 2 Solution 3 Solution 4 Solution 5 Solution 7 Solution 8 Solution 9 Solution 10 Solution 11 Solution 13 Solution 14 Solution 15 Solution 16 Solution 17 M A D V Process, policy, systems & training D Optimise -GB

Evaluate solution Easy to Implement Big Impact Hard to implement Small Impact Solution 1 Solution 3 Solution 6 Solution 7 Solution 8 Solution 9 Solution 2 Implement Now Possible Kill Implement Later M A D V Process, policy, systems & training D Optimise -GB

Formularise the top 3 solutions Solution 1 Who? What? When? Where? How? Why? M A D V Process, policy, systems & training D Optimise -GB

Process map the activities Who, which department The what Operations Supplier Finance 1 - Raise purchase order (PO) 2 - Sends good / Invoice 4 – Enter invoice on system 5 – Match PO to invoice 3 – Receipts goods on system 6 – Schedule BACS payments M A D V Process, policy, systems & training D Automated system Optimise -GB

Policies and Service Level Agreements Management approval limits to approve invoices (Senior managers to sign of invoice above £25K) Invoices to be paid within payments terms, specified in supplier contracts Suppliers should only see their own PO’s when loading invoices For our example: M A D V Process, policy, systems & training D Optimise -GB

Design (Workshop event) Review the process maps Identify efficiencies through systems Develop flows of information Identify data tables Agree trigger of events within process M A D V Process, policy, systems & training D Optimise -GB

Review the process map for possible issues and wastes Waste category Office examples 1. Overproducing Printing / working on paperwork before it is needed 2. Inventory Filed in boxes, office supplies, batch processing 3. Waiting System downtime, managers approval, information from others 4. Extra processing Re-entering data, extra copies, excessive reports, budget process, scanning 5. Correction Data entry, design, invoice errors 6. Excess motion Walking to and from printers, other offices, filing 7. Transportation Excessive email attachments, multiple hand offs, approvals, postal services, internal post 8. Under utilised people Limited employee authority, excessive management control M A D V Process, policy, systems & training D Optimise -GB

Remove transportation of paperwork, which leads to lost invoices by inputting data from the invoice and PO onto the system Prevent invoices being sent for approval by applying a notification on the desktop CTQ’s and issues For our example: M A D V Process, policy, systems & training D Optimise -GB

CTQ’s and issues Stop the use of email notifications blocking up the system by giving access to the system to the end users Request the supplier to scan the invoice onto the system by giving them access to their PO’s Payments made by the system upon PO approval to prevent transposition errors or omissions For our example: M A D V Process, policy, systems & training D Optimise -GB

Design data tables Considerations What information is required, types? What information should be optional or mandatory? How is information protected / validated? How will table of information be linked? What will users see and how will they access data / information? What are the reporting requirements? M A D V Process, policy, systems & training D Optimise -GB

* Unique reference All tables will need to be linked on a one to many relationship Design data tables (Identify all information requirements) Operations Person ID* Person’s Name (Auto by login) Cost Centre (Auto by login) Contact info Supplier details Supplier code* Supplier Name Contact Details Bank details Discounts % Payment terms Goods info Product code* Product Name Product Description Product price Order info Order ID / PO* Products details No. Units Product price Value of order Date of order Date goods received Date Paid M A D V Process, policy, systems & training D Optimise -GB

Design data tables (Identify all information requirements) M A D V Process, policy, systems & training D Data Field Mandatory / Optional / Auto populated Validation / Parameters Calculations Order No. Auto populated Incremental number Product details Mandatory Drop down of product details No. Units Mandatory >0 Product price Auto populated Based on product code Value of order Auto populated Unit price X No. Units Order info Order ID / PO* Products details No. Units Product price Value of order Date of order Date goods received Date Paid Optimise -GB

Design the Graphic User Interface (GUI) From table view To user interface view (Specifying drop down list boxes, fields to auto populate, validation checks, access rights etc) Operations Person ID* Person’s Name (Auto by login) Cost Centre (Auto by login) Approval limit Contact info M A D V Process, policy, systems & training D Optimise -GB

Use mistake / error proofing to prevent future problems Use colour and clear help guides for users Use system interfaces to prevent manual working Use drop down lists instead of free text fields Use colourful pictures to show the expected end result M A D V Process, policy, systems & training D Optimise -GB

System workflow Person in operations places an order Message on managers desktop to approve order System automatically emails order request to supplier Person in operations receives good and receipts item on system (Journal posted into Finance) Supplier loads invoice details through a web app scanning the invoice System is triggered to match units receipted against order and if correct transacts a payment to the supplier and posts invoice to general ledger (Finance) Please note that any data / information that falls outside policy / CTQ’s should automatically be sent to managers M A D V Process, policy, systems & training D Optimise -GB

Verify Create a proto type of the system Create Standard Operating Procedures (SOP’s) of how to use system Pilot test the system with people that will ultimately use the system Sign off solution as satisfactory M A D V Process, policy, systems & training D Optimise -GB

Test proto types Choose users that are not experts with systems Provide them with dummy activities to test the system Ensure that each functionality is tested Identify issues / bugs and fix at the end of each day and re-test the system from scratch M A D V Process, policy, systems & training D Optimise -GB

Create user guides: Show each process step with a screen shot of the event Use simple language Ensure policies are highlighted Inform the user of the dos and donts Test the manuals through UAT M A D V Process, policy, systems & training D Optimise -GB

Training manuals: Each process maps should be accompanied by the following documents Process map of who does what Procedure of how to carry out activity clearly numbered with screen shots What is expected, policies behind work, rules and regulations that apply Examples of what the finished output should look like: example being forms Check list for the activities to confirm completion and sign as authorisation Process map How to guide Policy info Specimen Checklist M A D V Process, policy, systems & training D Optimise -GB

Staff training: Ensure that every user involved in the business process has been given training. Use tests to ensure understanding and ensure employees sign to acknowledge that training has been given Do not allow access to systems or allow person to work in process if they have not been trained M A D V Process, policy, systems & training D Optimise -GB

Control / Capability Charts Use software to plot the time taken for each activity and automatically inform managers if activities fall outside of the control limits M A D V Process, policy, systems & training D Optimise -GB

For other solutions Contact Simon Misiewicz through Web: www.optimise-gb.com Email: [email_address] or Optimise- GB

Business process re-engineering and systems design - implementation

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Business process re-engineering and systems design - implementation