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Process Improvement

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Process Improvement

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    1. Process Improvement Business Process Excellence Strategy

    2. Introduction Craig Lehman Associate Director, Commercial Services University of Newcastle Karla Stewart Senior Commercial Relationship Manager Commercial Services, University of Newcastle

    3. Procurement Reform Over the past 2 years the university’s procurement has undergone significant reform. This was to position procurement into a sustainable value add decision support operation for the organisation. The result has been a more balanced approach to procurement with capability across both tactical and strategic requests from the organisation. Over the past 2 years the university’s procurement has undergone significant reform. This was to position procurement into a sustainable value add decision support operation for the organisation. The result has been a more balanced approach to procurement with capability across both tactical and strategic requests from the organisation.

    4. If Procurement was reformed, why do we need a Process Improvement Strategy?

    5. Process Enablers There are 3 levels of enablers for process, policy, strategy and guidance, and technology. These enablers direct the related process transactions that converts inputs to results or outputs. When variation or change occurs in any of the levels of enablers, this will create process variation or defect.There are 3 levels of enablers for process, policy, strategy and guidance, and technology. These enablers direct the related process transactions that converts inputs to results or outputs. When variation or change occurs in any of the levels of enablers, this will create process variation or defect.

    6. Business Process Excellence Strategy Commercial Services Procurement function has evolved significantly since 2008 and continues to evolve and although the evolution has been one of a strategic nature, the focus has shifted away from tactical and supporting processes. This has created a gap in process and system support of the procurement function which in turn creates inefficient and ineffective business and system process i.e process variance Commercial Services Procurement function has evolved significantly since 2008 and continues to evolve and although the evolution has been one of a strategic nature, the focus has shifted away from tactical and supporting processes. This has created a gap in process and system support of the procurement function which in turn creates inefficient and ineffective business and system process i.e process variance

    7. Contribution and Influence Process & Controls External and Internal Relationships Supplier Relationship Management Effective Use of Available Technology Staff Capability and Development Structured Approach to Effective Sourcing (DMAIC) Sustainable Procurement A key to Commercial Services procurement reform was to establish a procurement excellence profile. This represents the essential building blocks necessary to underpin what we believe to be a high performing procurement operation. However, the remaining 2 enablers have generated the gap in supporting processes of the procurement function. To assist in development of these remaining 2 enablers, CS have implemented a Business Process Excellence StrategyA key to Commercial Services procurement reform was to establish a procurement excellence profile. This represents the essential building blocks necessary to underpin what we believe to be a high performing procurement operation. However, the remaining 2 enablers have generated the gap in supporting processes of the procurement function.

    8. Business Process Excellence Strategy Process Improvement Strategy System Modernisation Strategy The Business Process Excellence Strategy consists of two supporting strategies, Process Improvement Strategy and a System Modernisation Strategy. This is to ensure that the continued development of the procurement function is sustainable.The Business Process Excellence Strategy consists of two supporting strategies, Process Improvement Strategy and a System Modernisation Strategy. This is to ensure that the continued development of the procurement function is sustainable.

    9. What are our Objectives? Organise and develop our operations to suit our internal customers and stakeholders Provide increased value and benefits by improving services and offerings available to staff and students. Be recognised as a business excellence centre for continuous improvement How? By aligning the 3 levels of process enablers to meet changing requirements.

    10. The recognised pulse points for the strategies are Customer, Information, Methodology and these ensure that our process improvement efforts are valuable to the internal and external stakeholders and customers. These pulse points feed directly into our improvement frameworkThe recognised pulse points for the strategies are Customer, Information, Methodology and these ensure that our process improvement efforts are valuable to the internal and external stakeholders and customers. These pulse points feed directly into our improvement framework

    11. This ensures that key enablers and pulse points of process as well as outcomes and results are considered and identified.This ensures that key enablers and pulse points of process as well as outcomes and results are considered and identified.

    12. Business Process Business process can be defined as a chain of logical connected, repetitive activities that utilises the organisation's resources to refine an object for the purpose of achieving specified and measurable results for internal or external customers. We define Business Process as a logical series of related transactions that converts input to results or output. Process contains a level of value, incidental and waste transactions.We define Business Process as a logical series of related transactions that converts input to results or output. Process contains a level of value, incidental and waste transactions.

    13. 10/80/10 Rule 10% Incidentals 80% Value 10% Waste We view process by a 10/80/10 rule. New and aligned processes generally contain 10% Incidentals, 80% value, and 10% waste.We view process by a 10/80/10 rule. New and aligned processes generally contain 10% Incidentals, 80% value, and 10% waste.

    14. 10/80/10 Rule 10% Value 80% Incidentals 10% Waste Aged and misligned processes generally contain 10% value, 80% incidentals, and 10% waste. In order to reduce and eliminate waste and variance in process, we had to improve or redesign by way of a process improvement methodology.Aged and misligned processes generally contain 10% value, 80% incidentals, and 10% waste. In order to reduce and eliminate waste and variance in process, we had to improve or redesign by way of a process improvement methodology.

    15. Process Improvement Methodology To implement our strategies and improvements we needed a robust methodology. There are numerous process improvement methodologies available of which we have listed just some of the well known ones. We chose Six Sigma.To implement our strategies and improvements we needed a robust methodology. There are numerous process improvement methodologies available of which we have listed just some of the well known ones. We chose Six Sigma.

    16. Process Improvement Framework DMAIC- Define, Measure, Analyse, Implement, Control DMADV- Define, Measure, Analyse, Design, Verify 3i- Innovate, Improve, Implement Our methododology includes Six Sigma variations and these are, DMAIC, DMADV, 3i or as we call it MET (Most Effective Technology). Our methododology includes Six Sigma variations and these are, DMAIC, DMADV, 3i or as we call it MET (Most Effective Technology).

    17. Process Improvement Framework Continued DMAIC is a basic component of the Six Sigma methodology- it is a way to improve existing work processes by eliminating waste and aligning with desired process outcomes.DMAIC is a basic component of the Six Sigma methodology- it is a way to improve existing work processes by eliminating waste and aligning with desired process outcomes.

    18. 18 DMADV is for designing new process and services. It’s relationship to DMAIC ends after the first 3 stages, Define Measure and Analyse.DMADV is for designing new process and services. It’s relationship to DMAIC ends after the first 3 stages, Define Measure and Analyse.

    19. Process Improvement Framework Continued The 3i concept is better known to Commercial Services as Implement MET or “Most Effective Technology.” MET is comprised of three levels: • Corporate leverageable technology, referred to as MET-1 • Business leverageable technology, referred to as MET-2 • And, location specific technology, referred to as MET-3 For the purposes of this model, technology encompasses both the process and the underlying technology to support the process. If modification is required, a determination is made if improvements to an existing MET will meet the requirements. If the answer is ”yes,” (1) then improvements are made and implemented. If the answer is “no,” (2) then it is shifted over as an “innovate project.” The 3i concept is better known to Commercial Services as Implement MET or “Most Effective Technology.” MET is comprised of three levels: • Corporate leverageable technology, referred to as MET-1 • Business leverageable technology, referred to as MET-2 • And, location specific technology, referred to as MET-3 For the purposes of this model, technology encompasses both the process and the underlying technology to support the process.If modification is required, a determination is made if improvements to an existing MET will meet the requirements. If the answer is ”yes,” (1) then improvements are made and implemented. If the answer is “no,” (2) then it is shifted over as an “innovate project.”

    20. DMAIC Process Storyboard A Six Sigma storyboard is developed to provide a real-life example of the application of the methodology to improve the process. This document is a living document and communication tool throughout the improvement process.A Six Sigma storyboard is developed to provide a real-life example of the application of the methodology to improve the process. This document is a living document and communication tool throughout the improvement process.

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    22. Improvement Example Fleet Management

    23. Fleet Management Problem Statement or the Case for Change Growing CAPEX Fleet Budget Growing Fleet size and operational costs Under utilised third party fleet management system. No decision support data for management of fleet and sourcing. Tactical sourcing of Fleet requirements The 1st step that we take is we complete a charge document. This will identify Problem/Opportunity. Creates a Problem Statement. This then will allow for the correct improvement framework to be used for improvement or design. The 1st step that we take is we complete a charge document. This will identify Problem/Opportunity. Creates a Problem Statement. This then will allow for the correct improvement framework to be used for improvement or design.

    24. Fleet Management The 3i model was chosen as the preferred methodology for improvement. Is was chosen as a MET 2 improvement. ‘As is’ was defined and measured for both process and system capability by using process flow charts with desired transaction and decision support process identified. This included process tasks, process outcomes and process control points. The desired system output was identified, The current technology was sufficient, improvements made, UAT conducted and then implemented. The 3i model was chosen as the preferred methodology for improvement. Is was chosen as a MET 2 improvement. ‘As is’ was defined and measured for both process and system capability by using process flow charts with desired transaction and decision support process identified. This included process tasks, process outcomes and process control points. The desired system output was identified, The current technology was sufficient, improvements made, UAT conducted and then implemented.

    25. Outcomes

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