Strategy Analysis: Process Flow

Understanding process flow within your organization allows for a greater visibility into how things actually get done across different jobs and departments. It makes clear which activities have "always been done" but aren't really adding any real value to your customers. And it exposes things that you should be doing to help move your organization forward in its goals and objectives.

For some organizations, their primary resources are raw materials, and physical assets like plant and equipment. They use their equipment to process raw materials for sale to customers. At each step of the way as a piece of material or part goes down their assembly line, there is some work that is done. Maybe connecting two parts together, maybe polishing, maybe sorting. Smart companies analyze every step of the process and ask themselves, "is this activity adding value for the end customer". Some call this "value mapping", others call it "value stream engineering". Whatever the fancy term, the idea was pioneered by Japanese manufacturing and companies like Toyota. To better understand process flow, and implement process flow improvements in your organization, there are three simple questions you must ask:

What is the real value that we provide our customers?

The best organizations are constantly asking their customers what they like and DON'T like about the products and services they purchase. They are asking their customers what else they are wanting.   And most importantly, they are thinking through their customers business and creatively finding new ways of solving problems for them. Ironically, this means at times they decide not to service a customer if it means doing something that is outside their core competency of what they can do excellently while still making money.

This is the practice of any solid organization, especially associations. In the "7 Measures of Success" published by the ASAE & The Center for Association Leadership, they found the practice of consistantly communicating with their members to be a common practice among remarkable associations. "Remarkable associations view members as a population to serve rather than a market to sell to. In fact, they reject out-of-hand a product or service that fails to directly aid their members, even if it might generate revenue."¹. The stories are amazing in 7 Measures of associations agressively and honestly facing the facts of what the real value is that they are providing their members. For some associations, this caused some realignment of their products and services. Taking away all or parts of a product offering, or adding to another product.   Associations need to continue to look at their product offerings and ask themselves what is the real value they are providing their members.

What activities should we eliminate that aren't adding value?

Once you identify which products and services that are creating real value for your members, you then work backward down the value chain ending at the beginning of each process, analyzing each point where there is some sort of "processing" going on. One tool to accomplish this is to create a Process Flow diagram with swim lines. The process flow describes the end value added product or service and then documents every step within the organization where someone is involved in this process. Each process sits in a swim line, each swim line represents a person (or maybe group) that is responsible for accomplishing that particular work. So, if you were analyzing your event registration process, you would document every place information flows through the organization to the end customer--either through paper or digital means. Click here to view an example of a process flow diagram we did a while back for another organization.

Once you have created your process flow diagram, you should have some pretty clear wasteful activities that you can get rid of.   For Toyota, and lean manufacturing companies, they have identifed seven wasteful activities, and they work hard to eliminate them from any process. The Toyota production system identifies seven kinds of waste: Overproduction, delay, transport, extra processing, extra inventory, wasted motions, and making defective parts.² In an office environment there are very similar wastes.   You might have a customer waiting on the phone to register. You might have a paper registration moving across two desks, and then into a spreadsheet. You might find out that people are creating confirmation letters manually.   Don't assume anything as you do your analysis, really get the facts of how people do their job.

How can software aid in adding value and eliminating waste?

A simple example of waste we see over and over in assocations is that of data duplicate data entry.   Sometimes this is caused by multiple software systems, other times it is caused by a "double checking" process where one person does the work and another redoes the work just to make sure it is correct. This activity leads to two potential wastes. First, is extra processing, because two people are doing the same thing. The second is rework, where you have inaccurate data that needs to be corrected because the data is being "touched" by too many people. These activities provide no value to your member, and is not a something that they would be willing to pay extra for in their membership. You can't add a line item to their dues that says, "Added data entry".

It is important to note that good process flow organization must supercede software implementation. Smart organizations realize that spending money on software and computers to aid a broken process only makes things "break faster". Assocations need to learn this lesson as well. The number one reason for software implementation failure is feature creap, which is the process of software trying to do too much. You end up with software that is too expensive and is too complicated. If you have done good process mapping in your organization, chances are you have already been putting your people through changes that help them do their job better. Training people is much cheaper than changing software to fit what you think you need. And many times what you think you need is not what you actually need. A good honest process flow assessement ensures your activities are really adding value to your members.

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¹ ASAE & The Center for Association Leadership, 7 Measures of Success (Washington: ASAE & The Center for Association Leadership, 2006), 30.
² Shigeo Shingo, A Study of the Toyota Production System (Portland, Oregon: Productivity Press), 191.