James Williams | ArcBest
Regardless of your business size, department or responsibilities, developing sound processes to measure, execute and drive productivity is crucial. Whether a company has five or 5,000 employees, a strategy for process implementation can create a successful and efficient operating model. These processes set the stage for continuous improvement and allow a company to evaluate possible efficiency gaps in day-to-day operations.
Common Benefits of Process Implementation
Gaining value in business workflow is the primary reason to consider investing in process design and implementation. Several advantages commonly seen as a result of using formal business processes include:
• Creates Efficiencies
• Links Tactical Execution to Overall Strategy
• Improves Training Results
• Allows for Qualitative Analysis
• Builds a Baseline for Measuring Results
• Promotes Employee Ownership of Tasks
• Removes Non-Value Added Steps from Workflow
• Reduces Redundancies
• Creates Cost Control/Reduction Measures
An example of a recent process improvement we made at ArcBest is within our Truckload Fulfillment team.
For years, this team primarily used external data sources while working to cover awarded shipments. To help the members of this team become more productive, we developed a proprietary platform that is more efficient at predicting the best carrier partners for an awarded shipment, and prioritizing them for contact according to the likelihood of acceptance.
The results were positive. The new process means fewer calls per shipment, faster and better coverage rates, and better carrier utilization. It also allows us to better serve our customers by giving them even more consistency as a logistics provider.
Where Should You Implement a Process?
A good place to start is to ask: “Where do I need to create a process?”
Quite simply, anywhere there is a predetermined and/or desired outcome. The outcome can be reverse-engineered into a business process. This includes sub-processes as steps in a larger process design.
General Process Types
There are basically three types of general business processes:
• Operational – Tasks related to core business execution, such as customer engagement, quoting, service implementation, etc.
• Management – Includes processes related to corporate policy, human resources, financial forecasting/budgeting, and employee oversight.
• Support/Utility – These processes support other processes, such as business intelligence, IT, communications, accounting, recruitment, etc.
Understanding how each of these general types of processes support and work together can help in your overall process design strategy. For instance, you want your Marketing Department processes for soliciting customers to align with the Sales Team processes for selling your product or service.
Common Steps to Designing and Implementing Your Process
The following steps will give a basic framework to start down the road of process design. This common-sense approach can build out a successful process that will positively impact business levels. Each step also will be further examined.
• Process Map – Analyze each step of the task while considering the necessary result.
• Establish Benchmarks – Collaborate with stakeholders and research best practices to include in the process design framework.
• Study the Value Chain – Identify non-value-added activities or steps (redundancies, bottlenecks, etc.).
• Finalize the Process Flow and Steps – Chart/record the process steps.
• Pilot with a Small Group – If it is better to roll out incrementally, use a pilot group.
• Employ Proper Change Management – Properly deploying the process creates buy-in from the users impacted.
Process Mapping – This generally involves creating a workflow diagram. It should be a visual representation of how the current steps (or lack thereof) flow and the relationship this process has with other parallel or ancillary processes. It also should provide a clearer understanding of all of the workflow needed to achieve the result. It sets the stage to evaluate the “current state” of the business and allows for a look to the “future state.”
Establish Benchmarks – To understand potential and optimize productivity, collaboration with subject matter experts and stakeholders in the company is crucial. This creates an understanding of the possible results. In addition, it is important to borrow successful practices from companies that have implemented similar designs.
Study the Value Chain – One benefit of formal process implementation is the ability to identify and remove non-value-added steps within the current practice(s). This will create immediate gains in efficiency. Also, it may identify bottlenecks or other dependencies that allow for a cost-benefit analysis on whether resources should be invested to remove these inefficiencies.
Finalize the Process Flow and Steps – Sometimes the best starting point is drawing it out on a whiteboard, and then refining by removing unnecessary steps or components. It is also beneficial to create flexibilities within the process and allow some latitude to optimize productivity should resources be misaligned or unavailable. For instance, if there is an unavoidable bottleneck, build a contingency plan into the process so that when the bottleneck occurs, the entire process does not come to a halt. Once the process flow is charted, get feedback from the stakeholders and make changes as needed.
Pilot with a Small Group – In some cases, where a change is drastic or new technology platforms are introduced, it is best to roll out incrementally to a small group and monitor results. This can be done with pilot groups or a technique called A/B testing. This way, if something doesn’t go as planned, it is easier to roll the changes back and reassess the steps or diagnose the issue.
Employ Proper Change Management – Over the years, the understanding behind what drives successful organizational change has evolved tremendously. Raising awareness about the need for a change, educating employees on why the change is necessary, and speaking with those affected to get input on how to implement the change are all reasonable steps leading up to a new process implementation or redesign. Many companies use a formal Change Management process to maximize success when launching new business changes.
Measuring Your Process
Generally, a team member will be made the Process Owner and be responsible for measuring efficiencies and outcomes. As stated, the design should be agile to allow flexibility to make changes as necessary. Study the test group results, and measure gains/losses in output relative to the steps in the design.
When implementation and/or maintenance involve a cost, measuring the return on investment can be an important element. When thinking of measuring the process, consider a variety of metrics. Below are several to keep in mind, although there may be others depending on the characteristics of the process design, purpose and investment:
- Process Effectiveness – To what degree does the process meet the internal/external customer requirements?
- Process Efficiency – What resources and inputs do the processes consume or require, and what is the ROI relative to the outputs?
- Process Cycle Time – How long does one cycle of throughput take, and is it meeting the needs of the internal/external customer?
- Process Compliance – This can refer to two measures: a) What is the internal compliance for following the process, and b) To what extent does the process meet the internal/external customer demand or requirements?
Each tracked measure should contribute to quality assurance and/or continuous improvement. To maintain or improve throughput efficiency, this is a critical piece of effective process implementation.
The business world is constantly evolving at an ever-increasing pace. Thoughtful design toward administering business practices will position employees to be successful, and the result will be a culture of productivity. This will help ensure both internal and external customers are well-served, and efficiency is maximized.
Process design and implementation will create a roadmap to success, and allow a company to create a platform for improving throughput, reducing cost and maximizing productivity.
James Williams is Branch Manager, Truckload Sales at ArcBest. ArcBest is a logistics company based in Fort Smith, AR. James may be reached via email at email@example.com or 479-434-9603.
Photo credits: ID: 636516758; RoseStudio/Shutterstock.com, ID: 1034526682; Khakimullin Aleksandr/Shutterstock.com