Identify losses in project Process

There are always losses in the processes. Losses are absent only in ideal processes. But there's one problem with ideal processes — they don't exist. Therefore, it is extremely important to have the skills that will allow you to detect and eliminate losses in the processes. The concept of "loss", in terms of business processes, has gained its popularity thanks to the lean manufacturing methodology.

We've already talked in some detail about seven types of sweats,so it's time to talk about how they can be detected.

How to detect losses in processes

In principle, approaches to detecting losses in processes are simple. There is no need to purchase complex equipment, implement expensive information systems or conduct long-term training of employees.

Several key approaches can be distinguished:

1. Creating Value Stream Maps
2. Business Process Modeling
3. Route mapping
4. Process timing
5. Quantitative analysis of inputs and outputs
6. Creating Value Stream Maps
7. A value stream map is a schematic representation of the chain of operations/processes that produce a product. Each step, operation or process carries out some action with the product. This can be product processing, assembly, analysis, movement, quality control, approval, and so on – any action that is performed with what the output of the process will become a product.
8. The value chain demonstrates all these actions, in the sequence in which they are performed. In doing so, each action must be evaluated from two perspectives: cost and value. This allows you to detect losses in processes.

I think with the costs everything is clear: each action is carried out for some time and costs some money. On the map, it is enough to indicate the time and material costs in financial terms.

Value is a little more complicated. Let's start with who is forming value. The value of the future product can be formed both for the client of the process, including the final one, and for the internal client. The value for the end customer lies in meeting his needs, regarding the product. 

That is, if the final product, its properties and characteristics meet the requirements of the client, then it has value for him. Each action in the value chain either forms the required properties of the product, or leads to them, or not.

From the client's point of view, all internal work with documents, for example, accounting for primary accounting documentation, does not create and does not lead to any value of the product. Thus, it is quite simple to evaluate the action in the chain in terms of creating value for the end customer. You only need to specify one of three options:

• The action generates the desired product property
• The action is necessary for the subsequent formation of the product property
• The action does not affect the required properties of the product. As you can imagine, this is a potential loss.

But. There's always a but. Value can be generated for the internal customer. For example, the same primary documentation. It is necessary because it creates value for the company and certain processes. Without primary documentation, it is impossible to carry out accounting and tax accounting. And this is already fraught with serious consequences. So, you also need to indicate whether the action in the chain forms value for the internal processes and interests of the organization. There can also be three options:

• The activity adds value to internal processes, the company or is necessary to comply with external requirements
• The action leads to the desired result, in terms of internal processes, company interests or compliance with external requirements
• The action has no value for the company, regulators or internal processes. This is also a loss in the processes.
• If an action does not create or result in the creation of product properties for an external or internal client, it is a loss that must be eliminated by all means. Such an action does not give anything to the interested parties, but still generates costs.

Losses in processes. Value Stream Map

And although this is a topic for a separate article, I want to add a few words about value. Value cannot be fully measured in money. And sometimes it's impossible. Value – Customer satisfaction of the process. 

Needs can be related not only to the property of the product, but also to how, with what else, when and through what channel the product is delivered to the client. 

From this point of view, the same primary accounting documentation must meet the requirements for the product itself (the availability of information in documents, signatures and seals), as well as the requirements for other parameters: 

it must be accompanied by an explanation, if there are discrepancies, arrive on time, only the originals and so on.

To understand the value, it is necessary to understand the customer's process needs.

Business Process Modeling

• A properly constructed business process model is a very detailed description of the totality of operations, events, branches, performers, documents, resources and other elements of the process. A good process model allows you to detect almost all types of losses, because it shows how the process exists in real life.
• By the way, this is why many models are completely unsuitable for use. They are either too general, or show only what the author wanted to show, or neglect the necessary details.

Losses in processes. Business process model

We have already written about how you can find losses in processes using models. Nevertheless, we will add a few more words on this topic:

Excessive transportation

Any movement of a material object or information must be justified. This means that without moving, it is impossible to form or add any properties, increase the value of the product. When a work piece flows from one machine to another, because otherwise it is impossible to process it, this is justified, because it forms the value of the product. 

 

When a manager hands over a report to a person who transfers it further down the chain, it does not add value and represents an unnecessary movement. Look for any movements in the model between people, organizational units, workplaces, equipment, workshops and buildings. If you can't do without moving, in terms of value formation, then everything is OK. If the meaning of the movement is not obvious, or impertinently necessary, you have determined the potential loss.

Packing. 

If the model is built correctly, then it will indicate the accumulation of products, before it moves further down the chain. Such places are usually indicated by an intermediate event denoting the achievement of a certain accumulation limit or the emergence of a need for a product. That there is a lot of stuffing going on in this place cannot be said for sure without a quantitative analysis of the inputs and outputs. But the model allows you to determine the places of occurrence of a potential loss and already in them to conduct an analysis.

Unnecessary actions. 

As stated above, any action should form value. If an operation or process does not shape or result in value, it is rubbed. Therefore, it is necessary to understand why each operation is performed, to identify operations that are uniquely necessary and to question all the others. Business process models allow you to do this.

Waiting. 

From a simulation perspective, this is the easiest loss to detect. If the model is built correctly, the operations are performed one by one. The transition from one operation to another is carried out immediately after the completion of the first of them. If no such transition occurs, intermediate events should be specified to indicate the condition for starting a subsequent operation. Actually, such places clearly demonstrate the time losses in the processes between the execution of operations.
Overproduction. It leads to a charge, so the method of detection is similar.

Over-processing. 

In fact, over-processing is an unnecessary action. Therefore, it can be detected in the same way. But there is a nuance associated with the fact that excessive processing can add a certain value, but this value is either not really needed, or the cost of increasing the value exceeds it itself. Therefore, it is necessary to verify the value that is added by the operation for compliance with the requirements of the process customers. Then you can identify this type of loss.

Defects. 

All places where defects are likely to occur should be explicitly reflected in the process model. From a visual point of view, this is done with the help of intermediate events or branches that indicate the likelihood of a defect. Therefore, this type of loss is very easy to detect on the process model.
 

Route mapping

Route mapping is a schematic representation of the movement of tangible and intangible process objects that are used to produce a product.

 

Yes, that's right – you can map the movement of raw materials and blanks, and you can also move information or a document. 

Therefore, the method is applicable not only for the search for excessive movements of material objects, for example, between shops, workplaces and production equipment, but also for moving, sending information. Route mapping allows you to detect non-obvious losses in processes.



The most common approach to route mapping is called the Spaghetti Chart. The point of the diagram is to visually represent the movement of an object between buildings, workshops, warehouses, equipment, workplaces, workplace sites, people, organizational units, systems, and so on. 

 

Here are some guidelines for preparing a spaghetti chart:

• First of all, determine the route of what you want to display.
• Visually imagine all the places where the object moves. Don't forget to include the name of each location.
• Draw arrows that reflect the movement of the object between locations. Be sure to number them according to how the object moves in the real process. If we are talking about physical movement, try to depict the arrows in such a way that they reflect the real movement. This means that the arrows are not likely to be straight. If we are talking about information that is transmitted through IT systems, then the length and shape of the arrow does not matter.

Separately designate the entry and exit points, i.e. the points where work on the object begins and where it ends.

This will make you get a classic chart. Next, you need to analyze, in terms of the need for each movement. We talked about this above, in the paragraph related to excessive movements.

But there's something else. A spaghetti chart allows you to see the lengths of the routes, which in turn allows you to think about changing the location of the places on which the object moves. By the way, this also works with information, but we will leave this question for you to think about.

If you supplement the spaghetti chart with data on the time it takes to move and perform operations, this will allow you to see time losses in processes and even unnecessary operations.

Process timing

Timing is the fixation of the time that is required to perform process operations. Simply put, in order to conduct timekeeping, it is necessary to detect the time of execution of each operation in the process. It can also work at the process level: when we are interested in a chain of processes.

Naturally, in order to conduct timekeeping, it is necessary to have a fixed, consistent list of operations, and better, much better, a business process model.



Once you have determined exactly which operations and processes need to be measured, you need to... well, just time it. Every operation or process.

The problem is that the execution time depends on many factors and has variability - the spread of values. This means that it cannot be said for sure that the operation will always be performed, say, 5 minutes. Most likely, it will be executed within a certain range of values.

Therefore, it is not enough to conduct a timing of the process once. This needs to be done several times. From a statistical point of view, the more, the more accurate the results.

We will not now dwell on the principles of statistics and quantitative research, but it is worth saying the following:

• Consider the factors that affect the duration of operations and conduct timekeeping so many times to take into account the influence of most of them.
• The faster the process is carried out, the shorter the cycle of its implementation, the more times it is necessary to carry out timekeeping.
• The higher the duration variability (analysis of values), the more times you need to time keep.
• The more people who perform the process, the more times you need to spend timekeeping.
• The higher the variability of the process, i.e. the number of scenarios, options for the development of the process, the more times it is necessary to conduct timekeeping.
• The more stable the process, the less timekeeping needs to be done.
• I hope you understood the principle: the greater the probability of a spread of values and the greater the spread itself, the more iterations of the process need to be measured.

Be sure to pay attention - with timing, it is also noted if nothing happens. That is, waiting.

Thus, the data obtained make it easy to identify temporary losses in the processes associated with waiting. And if you use the data in combination with process models, value maps and movement maps, you can detect many losses.

Quantitative analysis of inputs and outputs

• Perhaps the last method, which is aimed at detecting losses associated with overproduction, packing and defects.
• The point is very simple – to determine how many units of output are produced and consumed at each stage of the process.

You can display the data as a schema or a table.

Every time you see that a process stage produces more products than the next stage consumes, it indicates overproduction and, most likely, subsequent packing.

Also, at each stage of the process, the number of defective products should be reflected. It is important to show what is happening with defective products. After all, it can go to the next stage along with the rest of the products.

Please note: it is necessary to reflect the transfer of products from one stage to another, in accordance with how it happens in real life. If each unit is transferred as it is ready, then this is how it should be shown. If a party is transmitted, we write accordingly. This will detect downtime and expectations – typical losses in processes.