Leveraging Gap Analysis for Continuous Improvement
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The document outlines the concept of gap analysis as a method for continuous improvement by identifying the difference between current and desired states in various organizational aspects. It discusses the importance of gap analysis in performance management, project management, and process management, providing real-life examples and recommending the use of tools such as SWOT analysis and the McKinsey 7S model. Finally, it emphasizes the necessity of developing an action plan to effectively close identified gaps.
Leveraging Gap Analysis for Continuous Improvement
- 1. CITOOLKIT Gap Analysis Leveraging Gap Analysis for Continuous Improvement DESIRED CURRENT
- 2. citoolkit.com Definition A gap is a problem, issue or challenge, and could be an opportunity for improvement. Gap Analysis 2 Gap analysis involves assessing the difference between two things
- 3. citoolkit.com Uses Mainly used to compare two different states of something, the current state and the future state. Gap Analysis 3 Current Condition What is currently happening Target Condition What should be happening GAP
- 4. citoolkit.com Uses For example, it can be used to assess where a company or process is today, where it needs to be in the future, and what needed to be there. Gap Analysis 4 There are many reasons to perform a gap analysis and many ways to perform it.
- 5. citoolkit.com Uses Gap Analysis 5 The difference between the existing state and the desired state is the gap. If you find that your team’s skills are lacking, for example, performing gap analysis involves assessing the current skills and comparing them to the desired level.
- 6. citoolkit.com Examples There are many real-life examples where gap analysis can be applied. Gap Analysis 6 A facility has recently a significant increase in workplace accidents and incidents A hospital is operating under stress as ICU beds are occupied by COVID-19 patients The food and drinks in a restaurant take too long to be served Customers become dissatisfied with a company's customer service
- 7. citoolkit.com Benefits Gap Analysis 7 Helps selecting the solutions and projects of greatest impact 02 Indicates potential business opportunities and risks 03 Brings understanding to the problems and issues faced 01
- 8. citoolkit.com Applications Can be performed at any level of an organization. Gap Analysis 8 Operational level - comparing the state of the performance with the desire state Strategic level - comparing the condition of the business with that of the industry Project and process levels
- 9. citoolkit.com Applications Gap analysis has application across various domains . . . Gap Analysis 9 PROCESS MANAGEMENT PROJECT MANAGEMENT PERFORMANCE MANAGEMENT
- 10. citoolkit.com In Process Management Gap analysis can be used to address the unsatisfactory performance of a process, which allows to determine if the process needs to be simplified, streamlined or redesigned all over again. Gap Analysis 10 10 50 20 60 40 30
- 11. citoolkit.com In Process Management Useful when comparing an existing process to a process that is performed elsewhere. Provides an excellent opportunity to learn from industry leaders. Gap Analysis 11
- 12. citoolkit.com In Project Management Can be used before starting an improvement project to justify the initiation of the project. Gap Analysis 12 Can also be used at the definition stage of a project which allows to better understand the business case of the problem D M A I C
- 13. citoolkit.com In Performance Management Allows to compares the actual performance of a company against the desired performance. Gap Analysis 13 Actual Performance Desired Performance GAP It involves comparing various aspects such as financial metrics, operational efficiency, and customer satisfaction to determine whether the company is meeting its goals and expectations.
- 14. citoolkit.com In Performance Management Helps to identify areas where a business is performing below quality standards or customer expectations. Gap Analysis 14 It is important to involve the customer in the gap analysis process as they are key to close the gap
- 15. citoolkit.com Performance Metrics The assessment of the current situation and the desired future state can be both quantitative and qualitative. Gap Analysis 15 You may use these metrics at any point during the gap analysis process. It is recommended that you use performance metrics which are related to the company’s primary goals
- 16. citoolkit.com Action Plan Once the gap is identified, an action plan can be developed to close the gap. Gap Analysis 16 The action plan should include specific activities, timelines, responsibilities, and resources needed to address the identified gap effectively.
- 17. citoolkit.com Tools and Models Various tools and models can be used to turn the theory into practice and identify the gaps. Gap Analysis 17 Bottleneck Analysis SWOT Analysis McKinsey 7S SPC Analysis Fishbone Analysis Nadler-Tushman Congruence Model
- 18. citoolkit.com Tools and Models Gap Analysis 18 Examine the gap between where a company currently is, where it aims to be in the future SWOT Analysis Allows to understand the imbalances within a process Bottleneck Analysis Allows to examine different type of factors in a process which may affect the quality of a product or service Fishbone Analysis Allows to understand how a process has been behaving over a time range SPC Analysis
- 19. citoolkit.com Tools and Models Gap Analysis 19 McKinsey 7S – A framework that provides a way to understand and monitor the gaps and changes of a company. These elements need to be aligned and mutually reinforcing for the company to perform well. Can be used with the different type of changes; restructuring, merger, change of leadership, change in processes, new systems, etc. 7S refer to key interrelated elements of any company . . . Skills Strategy Structure Style Shared values Staff System
- 20. citoolkit.com Tools and Models Gap Analysis 20 Nadler-Tushman Congruence Model – Examines the four aspects of that will transform inputs into outputs. The ‘congruence’ of all parts working together will make up the company flow. Congruence Work Structure Culture People
- 21. citoolkit.com Data and Knowledge Gap analysis involves organizing information in such a way that allows for proper comparison and analysis. Gap Analysis 21 Such organizing of information can be simply accomplished using a table or chart without the need for a specific theoretical model to be effective.
- 22. citoolkit.com Data and Knowledge Data can be collected using any of the following . . . Gap Analysis 22 Records and documentations Subject Matter Experts Interviews and focus groups Surveys and self- assessment Observations Brainstorming Benchmarking
- 23. citoolkit.com Typical Steps for Conducting Gap Analysis There is no standard process to conduct a gap analysis, and it doesn’t need complicated methodology or software. It should be tailored depending on the situation. Gap Analysis 23
- 24. citoolkit.com Typical Steps for Conducting Gap Analysis Gap Analysis 24 Choose a specific problem area you need to focus on • Identify your objective and what you are trying to achieve.
- 25. citoolkit.com Typical Steps for Conducting Gap Analysis Gap Analysis 25 Understand the current situation and know where you are standing • Gather as much data as possible to clarify how you are performing at present.
- 26. citoolkit.com Typical Steps for Conducting Gap Analysis Ask questions such as . . . Gap Analysis 26 Is the information documented somewhere? Who has the knowledge that you need? What data collection tools that can be used? Is there is a need to conduct a benchmarking exercise?
- 27. citoolkit.com Typical Steps for Conducting Gap Analysis Gap Analysis 27 Identify the desired outcome that need to be achieved • Set SMART goals and make them aligned with your business goals.
- 28. citoolkit.com Typical Steps for Conducting Gap Analysis Gap Analysis 28 Identify the gap between the two states and analyze the causes • You need to answer why it exists and what you can do about it.
- 29. citoolkit.com Typical Steps for Conducting Gap Analysis Gap Analysis 29 Agree on the steps you need to take to close the gap • Identify the requirements and actions needed to be taken.
- 30. citoolkit.com Example – The Food Takes Too Long to be Served Gap Analysis 30 1. THE PROBLEM Customers complained that the food takes too long to be served. 2. CURRENT SITUATION The food takes on average 14 minutes to be served. 3. DESIRED OUTCOME The food should be served no more than 11 minutes from ordering. 4. THE GAP More than 3 minutes. • Obtain more opinions from customers about their experience. • Ask employees what would help them provide faster customer service. • Train employees to provide faster service. 5. ACTIONS / REQUIREMENTS
- 31. citoolkit.com Example – High Spoilage Rate at Line #3 Gap Analysis 31 1. THE PROBLEM High spoilage rate at line #3. 2. CURRENT SITUATION Spoilage rate is too high according to industry standards (>8%). 3. DESIRED OUTCOME Spoilage rate should be reduced below industry standards (3%). 4. THE GAP More than 5%. • Improve spoilage measurement system. • Improve spoilage awareness among employees. • Focus on areas with the largest number of defects. 5. ACTIONS / REQUIREMENTS
- 32. citoolkit.com Example – Having a Poor External Audit Score Gap Analysis 32 1. THE PROBLEM The last audit results were negative in all areas. 2. CURRENT SITUATION External audit score is below expected standards (<60%). 3. DESIRED OUTCOME External audit score should be above 90%. 4. THE GAP More than 30%. • Improve documentation and control of documents. • Comply with legal and other requirements. • Maintain all external and internal communication records. 5. ACTIONS / REQUIREMENTS
- 33. citoolkit.com Example – There is a Significant Increase in Incidents Gap Analysis 33 1. THE PROBLEM There is a significant increase in workplace incidents. 2. CURRENT SITUATION Workplace incidents have increased 60% this year. 3. DESIRED OUTCOME Reduce workplace incidents to be zero. 4. THE GAP 60%. • Review and analyze workplace accident and incident reports. • Investigate the root cause of workplace accidents and incidents. • Conduct safety training that includes risk assessment and safe work practices. 5. ACTIONS / REQUIREMENTS
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