This is to serve as an overview of the HOW – how do you Analyze a process, Document the current state, and solicit input to make it better. Our starting point is the introduction of a few terms and concepts essential to bring processes under control.
Where to Start?
The first decision is which process to work on first. After handling many complex process improvement projects, we recommend the following criteria for selecting your first process design project.
One of the most difficult transitions in business and a major point of failure is moving from the hub (owner) and spoke (employees) model of control and coordination. Most owners, no matter how harried, avoid it because it feels like the business will start spinning out of control. This valid emotion does not have to become fact. What is being demanded of the business owner and managers is a higher level of sophistication – moving from Direct Supervision to Process as a control method.
Some Unsolicited Advice
The first process we recommend you tackle is part of the Financial Process - Purchasing / Ordering of Materials. Once the sale is made, how quickly and accurately are the materials ordered to ensure best price and availability when needed. Leaving the inventory process for later – this is about monitoring when it is delivered (the clock starts ticking on Accounts Payable) and how much (you are storing must be viewed as cash on the shelves).
The second process we recommend to bring under control is Accounts Receivable. Purchasing / Ordering of Materials Process controls the velocity of cash going out, Accounts Receivable Process impacts the velocity of cash coming in. You can see the reason for starting here – get cash flow positive by having the velocity of cash coming in exceeding the velocity of cash going out.
We will start Value Mapping / Documenting the Process to identify the AS IS process for Purchasing / Ordering of Materials.
Find a conference room and invite everybody involved. Take a seat at the end of the table and have the members sit in their process order starting to your left. Once you have explained the reason for the meeting, hand each individual an index card – bigger is better in this case – and have them record the following information:
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