Would you like to position your company more successfully on the market and increase your profits in the long term? Do you want to maximize your operational efficiency? Process analysis and process optimization should form the basis of your plans.

Many companies analyze their current business processes in order to obtain a basis for process improvements and to identify the most important problem areas. This article will give you valuable tips along the way.

Advantages of process analysis and process optimization

Traditional business has recognized that “faster”, “better”, “cheaper” are not the only variables that consumers consider when making purchasing decisions. For many consumers, the quality of a product or service is just as important, if not more important, than the cost of the product or service.

To be successful in the long term, a company must constantly innovate and remain agile in order to react quickly to changes and implement these changes effectively. While efficiency aims to reduce operating and capital costs, agility aims to reduce the time required to develop products and services and respond to customer and market demands.

To achieve this, it is important to know your own processes well, analyze them correctly and then optimize them. This results in a variety of advantages:

• Optimization of process performance and efficiency
• Improving profitability by increasing production and reducing costs
• Higher throughput
• Reduction of stock levels
• Shortening the time to product release
• Improved transparency and manageability of process performance

The steps to success

The key to optimizing process performance and execution capability lies in the company's commitment to defining, continuously evaluating and updating its process documentation. The following steps will help:

• Define: In the first phase, you record customer needs and identify the processes and products to be improved.
• Measure: Determine the baseline and target performance of the process, define input and output variables of process steps and validate the measurement systems.
• Analyze: Analyze data to identify critical factors required for process execution.
• Optimize: Identify improvement potential (process, procedural, systemic, etc.) to optimize results and eliminate or reduce errors and deviations.
• Control: Monitor the entire process and be honest - use data to analyze how much the optimization has really achieved in the end. 

Don't forget that you can't optimize all processes at the same time. It is important to prioritize here. The business relevance of the process determines the order in which you should tackle the whole thing.

It is also possible that a process offers several optimization potentials that cannot be solved all at once. Here you need to proceed step by step. 

Avoid stumbling blocks

However, process analysis and process optimization do not always run smoothly. There are common pitfalls that you should avoid at all costs:

• Unclear start and completion of the process optimization project
• Use of the wrong key performance indicators
• Lack of ownership and support across the organization
• Failure to embed process changes
• Lack of execution

In order to avoid these pitfalls as far as possible, there are a few requirements that need to be met:

• Customer first: Put yourself in your customers' shoes and analyze their interaction with your company. Work from the outside in with an eye on process improvements and keep the company's goals in mind.
• Conscientiousness: Define the right KPIs that are needed to measure, analyze and simulate optimizations. These process KPIs should be based on KPIs defined at a strategic company level. Also run simulations of your processes to identify potential bottlenecks in advance.
• Collaboration: Involve process owners and all process participants (employees) in all phases of the optimization project. Build feedback explicitly into your processes, e.g. through feedback forms and questionnaires.
• Communication: Transparency in communication helps to keep the optimization project afloat and avoid inefficiencies and inconsistencies. Management dashboards with all relevant KPIs as well as (internal) notification and discussion systems to promote collaboration between the people involved in the process optimization project are very important.
• Continuous execution: Process optimization never ends in a company, as new process bottlenecks arise as soon as the previous ones are solved. Be prepared to continuously improve processes in your company and introduce this approach into company policy.

Conclusion

Many companies already rely on analyzing and optimizing their processes. This is often achieved with the help of software that has been specially developed for the respective company and adapted to the individual process. So-called individual software can help enormously with process analysis and process optimization.

At new direction GmbH, we implement these and similar solutions quickly and reliably. If you have any questions or specific concerns, please feel free to contact us directly.