Process optimization for a successful digital transition

Index:

• Introduction: Do you recognize optimization as a process?

• Lean Management and the elimination of MUDAS

• The importance of efficient processes in the face of digital transformation

• The challenge of the region: managing improvement before transforming

Do you recognize optimization as a process?

Discover how the Japanese culture of Kaizen (continuous improvement) can guide you on the road to operational excellence by reducing and eliminating Mudas (waste) from your operation in the face of a successful digital transformation...

The term "optimal" according to the Royal Spanish Academy is defined as: "adj. Extremely good, that cannot be better", which, if we use it in adjective association with a manufacturing or service process would leave us in front of an unbeatable system, which is conceptually incorrect. In contrast, from the Japanese philosophy of  continuous improvement Kaizen we receive that "The message of the Kaizen strategy is that not a day should pass without some kind of improvement somewhere in the company" (Masaaki Imai) since in this culture it is assumed that every process is always improvable, provided that emphasis is placed on the identification of problems and failures, which result in wasted resources, also called Mudas in Japanese; These are more easily identified by those collaborators who live day to day within the process and therefore are called Process Owners; they will always be a primary source of improvement opportunities.

<< Process improvement using As Is & To Be >>

Lean Management and the elimination of MUDAS

In the line of constant and consistent improvement by eliminating more and more unproductive activities and operations appears the Lean Management methodology, which states that it is possible and necessary to act on the 7 different types of waste existing in a process:

• Overproduction: You have more installed capacity than the demand that has been predicted for the business and in order to "take advantage of it" you overproduce or overinstall customer service servers.
• Movements: Unnecessary displacements within the facilities derived from a deficient distribution of space. The effect of this movement is maximized when a task is repetitive in a working day.
• Waiting: If a process element is simply waiting in a process it is not adding value, it is just waiting, this should be eliminated or minimized.
• Transports: About 80% of the resources in a manufacturing process are used to move objects, materials, transports in a process should be as short as possible.
• Over-processing: Unnecessary controls and approvals in a process, as well as providing an oversized quality level for the target market, can be examples of over-processing an item that could leave a process much earlier.
• Stock or Inventory: "Cash ponds" are inventories of raw material, semi-finished product (Work in process - WIP) and finished product that are not transformed into marketable items to ensure a continuous and healthy financial flow.
• Defects: The enemy of quality by defect is the variability of the processes, therefore, those reprocessable defects will generate triple cost to the company: initial cost, reprocessing cost and opportunity cost. The latter not always seen is the resource and space that could be used to process an item for the first time, but is occupied by reprocessing a defect and "someone else" has to do it.

Importance of efficient processes in the face of digital transformation.

Efficiency as well as productivity of processes are increased in 3 possible ways: making better use of existing resources, reducing resources without affecting operational capacity or increasing capacity with the use of fewer resources. Modern process engineering tools such as Lean Manufacturing or Lean Management propose the implementation of tools that eliminate operations that do not add value, and therefore are unnecessary in the core processes and support processes, achieving a positive impact in the short term and sometimes immediately on the productivity and efficiency of the processes.

So then, on the same line of improving processes together with the Lean methodology, it becomes impossible today to think that an opportunity to make our processes more efficient is through digital transformation; especially when during the 2020 and 2021 pandemic 85% of companies accelerated their digital transformation processes, in some cases to grow and in others to survive. On this topic the CEOs of global companies are very optimistic and give value to the possibilities that digital transformation opens. Globally, 95% of CEOs see technological disruption as an opportunity rather than a threat. All the countries analyzed show rates above 90%. And when it comes to qualifying themselves as active or passive disruptors, half of global CEOs (54%) are active: they say that rather than waiting to be the target of a disruption by competitors, their organization is actively disrupting the sector. The case of the United States stands out, where 86% of CEOs say they are active disruptors, with 36%. Spain is in the middle band, along with countries such as the Netherlands (38%), Australia and Italy (32%), India and China (30%); no Latin American country appears on this list, which undoubtedly can and should be seen as an opportunity for our regional executives.

<< Functions vs. processes Why do businesses fail? >>

The regional challenge: Managing improvement before transforming

It is at this point of thinking about digital transformation that we must be careful when planning and executing it in our businesses, since it is recommended that the processes to be digitized first go through the path of optimization understood as a process of continuous improvement- that ensures continuous customer satisfaction, company growth and business profitability. 

At Imagineer Customer Experience we want to accompany you to go through this process together, contact us and our group of experts will enhance your Lean process experience to generate a differentiating competitive element that will positively impact the satisfaction of your customers.