After you have a process improvement practice in place, now it is time to look for opportunities where processes are ripe for improvement. But where should you look for these process improvement projects?  In this article, I highlight nine areas within your organization where process improvement projects might exist.

9 Places to Look for Process Improvement Opportunities

Your organization might not have all nine of these specific areas, but I hope this comprehensive list gives you at least a couple of places to start with.  The nine places to start looking for process improvement projects are:

• Inventory

• Waiting

• Backlogs

• Bottlenecks

• Social Media

• Consumer Panels

• Employees

• Unrelated Industries

• Competitors

Inventory

If your company houses any kind of physical goods, or supplies any kind of product for consumers, inventory is a low-hanging fruit kind of place to start.  While maintaining inventory does have its advantages, it also has its disadvantages. It is advantageous because inventory can be used to decouple one stage in a process from another.

Let’s use McDonald’s as a simple example.  McDonald’s makes every effort to grill their hamburgers as close as possible to the point in time when an order is placed by a customer. This is often considered a “made-to-order” approach. If a McDonald’s location manages their process correctly, there is little or no inventory of pre-grilled food.

However, during busy times of the day, such as lunch time, they might build a small inventory of finished sandwiches to avoid a backlog of customers waiting for their meals.

With this little inventory of finished items (hamburgers, in this example), customers can then spend little time waiting. This is an approach that decouples demand from supply.

Amazon is another company that manages their inventory very closely. When an order is placed at amazon.com, most of the time the item can be picked from stock and shipped within hours.  Again, inventory decouples demand from supply.

But too much inventory can be a burden. It can slow a process, require large storage facilities, and even expose the organization to the risk of obsolete merchandise. Or in the case of McDonald's, deliver a soggy and tasteless hamburger.

One approach to improving process flow is to be conscious of inventory levels and to raise questions whenever it is found that inventory levels are too high or too low.

Inventory adds little value to the customer, therefore it needs to be managed carefully.  Taking one lap around your warehouse might help you uncover process improvement projects to better balance inventory.

Waiting

Like inventory, waiting also adds little, if any, customer value.

People waiting at a hospital's emergency department, callers waiting to be helped at a call center, or orders waiting to be received from suppliers all represent examples of situations where waiting is involved and that add little customer value.

But why? Waiting is a non-productive time, and to the extent that it can be eliminated, process efficiency and certain process throughput can be a benefit.

Backlogs

Backlogs present another great opportunity for process improvement.

A backlog is a demand waiting to be filled or addressed.

Consider a backlog of customer orders. The consequence is that customers must wait before their orders are filled. At the very least, they will be disappointed by the delay, but it is also possible that they will cancel their orders and go to a competitor.

Bottlenecks

Bottlenecks occur when processing orders or when delivering services. It is a situation where items cannot continue through a process because the following stage in the process does not have enough capacity or because the next stage is encountering problems.

Consider an assembly or manufacturing process with five steps. Now suppose that the number of items flowing through the process starts to build between the second and third steps. Clearly, the third step needs attention. Either capacity needs to be increased, staff trained, or repairs made to the equipment.

The consequence of the bottleneck is slower throughput and lower efficiency.

Bottlenecks can be difficult to clear. Here is an example that most everyone can relate to… Think about your commute to work.  Initially no problems when you get on the freeway. As long as cars maintain their proper distance from one another, and the highway can absorb cars entering and leaving from exits, the process is in control. Traffic moves at the speed limit and at a steady, consistent pace.

But if there should be even a minor accident, the situation can change instantly. A backup of cars can begin to form and grow larger over a short period of time.

The problem with a bottleneck is that even after the cause of the problem has been cleared, traffic does not return immediately to its prior state.

How many times have you been stuck in a bottleneck on the freeway, and then once you reach the scene of the incident, there is no sign of the problem that caused the delay?

So, bottlenecks, in many situations, are difficult to resolve.

Meanwhile, the bottleneck adversely affected throughput and efficiency.

Social Media

Social media can be a helpful source in uncovering process opportunities.

Google Reviews house just about every restaurant in existence, and many of them are routinely reviewed by their customers. They express concerns about how long it takes for their meals to come out of the kitchen, the quality of the food, or how nice (or rude) the wait staff was.

Online retail customers may complain that the length of time it takes to receive their orders is longer than promised, or that the items they received are not as advertised, or that the items don't fit.

Every one of these problems, for restaurants and online retailers alike, requires remedial action that focuses on the improvement of the throughput, process efficiency, and customer value.

Consumer Panels

Consumer panels provide opportunities to learn about problems and opportunities. These panels usually include both current and non-current customers.

Fidelity, the financial services company, uses consumer panels to test brand awareness, advertising effectiveness, and new website pages before they are made public.

Car manufacturer Hyundai uses them to test the acceptance of new features on their automobiles.

Employees

Ask employees about opportunities. They often understand operational processes better than anyone else in the organization and frequently have insightful views on how to improve efficiency.

Certainly, not all employees will participate, many may be concerned that they could lose their jobs as steps are eliminated, but if an effort is made to establish a collaborative environment and earn their trust, they can be a major source of ideas.

Unrelated Industries or Processes

Ideas for improving efficiency can come from a myriad of sources, many of which can be found in unrelated industries.

For example, supermarkets and airlines have studied the challenge of moving people through their processes for many years.

Supermarkets have separate lines for customers with less than 12 items. Therefore, those with few items spend less time in line than they would if they were caught behind a person whose cart was overflowing with groceries. As a result, the average processing time is less and the throughput is higher.

Airlines have studied the best way to load passengers. The less time it takes, the fewer minutes the plane is idle at the gate, and the greater is the resource utilization.

Competitors

By closely observing the way in which competitors deliver efficient results, it is possible to learn how to make changes in one's own processes.

For example, when a competitor announces same-day shipping, it is a message to take a close look at improving one's own order fulfillment systems.

When a competitor can return an insurance claim in hours, another clear message about what you might need to look at to improve your process to stay competitive.

Opportunities Not Threats

Clearly there are many opportunities to uncover opportunities to improve operational processes.

The challenge is to recognize these situations as opportunities not as threats over which nothing can be done or threats that need not be taken seriously.