6 Steps to Improve Profits through Business Process Redesign

10 January, 2013

Today the business landscape is constantly changing. With internet applications such as social media and company web sites, potential buyers are leveraging their shared knowledge and demanding faster service and lower product prices. Consumers can be fickle so the business owner faces the challenge of reacting quickly to these pressures while dealing with relatively fixed product and labor costs. One method to respond to market forces is to install a culture of constant improvement. Business process redesign has become the business owners’ go to method to reduce the cost of handling products or services.
There are well defined steps that the business owner can take to redesign a business process that can install a mindset of constant improvement in their employees.
Step #1 – Define the Objective
In many cases the objectives are customer driven. These objectives can be varied from the time it takes to ship an order such as “orders placed before 10 a.m. will ship the same day”.  It can involve a timed response, such as “delivered in 30 minutes or you don’t pay. Services can be guaranteed for 90 days or 6 months whatever the business objective demands. In all cases any process change must be supported by the business owner or management team to ensure that the new objective of the business process is aligned with the overall business vision or strategy.
Step #2 – Study the Process
Once the project has been approved a project team consisting of individuals involved in the business process under review, now starts their work in an organized manner. They must first describe in detail the current process. This is critical to ensure all steps of the process are reviewed for accurate reporting and maximum improvement.  Next the team must collect detailed data at each step of the process to validate the time taken. Then the team identifies the areas where they believe improvement can be made and possible obstacles to achieving that improvement.
Step #3 – Recommend Improvements
Based on their finding the project team now focuses attention on how to improve the process. This could involve a few recommendations to remove barriers to success. At this stage the costs to make the recommendations is provided by the project team. This could involve the addition of technology into the process, such as tablet computers or tools or machines.  A return on investment business case should be included where capital expenditures are required.
Step #4 – Decide
The business owner and management now review the proposals from the project team.
Each proposal must show how it addresses the improvement of the business process and the costs required to implement the change and any on-going cost savings.
In addition the implementation time and schedule including training must be shown to set a clear objective for completion of the process redesign.
Step #5 – Implement
Once the new business process redesign has been chosen, then the team must implement the changes in an agreed time frame. In addition, a process champion should be selected from the project team to be the single point of contact for questions and monitoring the new business process.
Step #6 – Follow up
There should be follow up reporting on the new design, including feedback from internal and external stakeholders. By assigning a process champion the business owner begins to install the mindset of constant improvement amongst his team. Eventually improvement becomes a way of thinking day to day and the company can create internal change to reduce costs and improve processes without external forces acting upon the organization
Call us at Numbers Plus today. We can show you the steps to implementing Business process redesign and put more money in your pocket.
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