Process Benchmarking
Benchmarking can be considered as using the knowledge and the
experience of others to improve the enterprise. A Benchmarking study should not
be considered as a collection of metrics alone. It is really a mechanism to map
where your enterprise stand vis-Ã -vis others and how can you aim to achieve the
performance that other have achieved or exceed what is available as the best. Looking below the surface, one can see that
Benchmarking is a search for ideas that are working in processes that are
similar to the process to be improved. However, these processes may be
embedded in a different system; hence the characteristics of that system should
also be included in the benchmarking study. Further, since the objective is to
search for successful ideas, it can potentially reduce to a quick-fix short-term
innovation, that may improve a process – but may harm the overall system in the
long term.
Crafitti (http://www.crafitti.com) has
combined the analytical and logical dimensions of thinking that has served the
businesses for so long with three relatively dormant thinking dimensions called
– Value Thinking, Inventive Thinking and Systems Thinking. This new framework
is called Analytical Logical Value Inventive and Systems Thinking (ALVIS).
Analytical Logical Value
Inventive and Systems Thinking (ALVIS) – Crafitti’s Framework for Innovation
Value thinking focuses on maximizing value of a system which also can be
considered as designing a system which is least wasteful of resources – as
described in Toyota Production System, Value engineering and Lean Thinking. Systems Thinking expands the focus from
immediate problem, system or scenario to a holistic view of the system and its
positioning in the overall scheme of things. This helps us to think about the
system in terms of its relationships, dependencies and complexities with
respect to super-system and sub-system and with respect to past and future.
Finally, Inventive Thinking and the
associated methodologies help us to create or invent solutions or design
alternative futures that usually will not
be simple extrapolation of known knowledge in the industry. Inventive
thinking brings best solutions from across industries using the Theory of Inventive Problem Solving (TRIZ).
Thus Analytical Logical Value Inventive and Systems (ALVIS) thinking is a
framework for innovation across the spectrum of innovation needs of an
enterprise.
Process Benchmarking using ALVIS
We start with a hypothesis that no process is independent. All
processes are part of a dynamic and usually an evolving system or system of
systems. Hence isolating
a process and benchmarking it independently may not give us an optimal view and
hence will lead to lessons and solutions that not only can be inefficient but
may actually harm the system in the long run.
We have following overall steps in the Process Benchmarking process:
Step
1:
Actors Departments Applications
Processes Technology
(ADAPT) analysis of the overall system using Dependency Structure Matrix (DSM).
Relative quantification of
dependencies of the process on various elements – Actors, Departments,
Applications, Processes and Technology is obtained. This also gives us a view
of Process/System Complexity using an analytical method of System Complexity Estimator (SCE).
Step
2: Definition
and understanding of end-customer
Value for each process, sub-process, sub-system or overall
system is created. This feeds into an overall stakeholder’s analysis – as
multiple stakeholders of the process may have a sub-optimal view of the value
to the customer. Creating a common operating
picture through consensus building is the main objective of this step. We use the Analytic
Hierarchy Process (AHP) to understand stakeholder’s key value parameters.
Step
3:
Value Stream Mapping (VSM) of the key process and sub-processes gives an overall view of how
much is the efficiency of the process and information spaghetti (entropy or
disorder). Process
Efficiency (PE) is defined as ratio of value adding time in a process to the
total turnaround time. A PE of 80% or above is considered excellent.
In the knowledge work, for example, software bug-fixing value streams we have
found PE to be around 30% -35%. Just imagine, if we can unlock the efficiency
and make value streams even 60% efficient, the productivity of the system can
double.
Step
4:
To define
and describe an ideal process which is least complex in terms of its dependencies on
other system elements (ADAPT) and is viewed with
the same lens by all stakeholders and which has highest
process efficiency. This is the second level of ideality. The ultimate ideal process is the one which does only the value adding activities, doesn’t harm the system
in anyway, consumes no resources and takes ZERO time. The ideal process
is the ultimate benchmark for ALVIS.
Step
5:
How others
are doing it? Identify key competitors/enterprises who are doing it better/differently.
This is done through open information available about other companies or
published by the companies in public. A survey questionnaire is designed and
executed in other companies and with their customers to gain key business intelligence about similar process and
experience.
Step
6:
Ideate on
solving problems identified during ADAPT, Stakeholders analysis, VSM and
ideality definition. Here we use TRIZ tools of key contradictions and inventive
principles, laws of system evolution and Lean method of elimination of
Non-value adding (NVA) steps in the process.
Step
7:
A final
report on the benchmarking study and ideas for improvement is submitted and a
presentation made to the stakeholders with specific recommendations. Action
plan of redesigning the process along with the changes in the associated
system, system of systems and organization structure is also provided.
