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CHAOS TO CONTROL

Higher Efficiency through Standardisation

Control the Process to Control the Result

Processes rule the world, and whether we like it or not, processes control a big part of our lives. We might even say that our entire life is one big process consisting of many smaller processes. It means that the results we achieve are largely dependent on the processes we follow, that “we get what we do.” The more we are aware of these processes, the better we can steer and influence the result, and the more control we gain control over our destiny, and that’s our starting point.

Every result depends not only on things we can influence but also on things out of our control, such as changes in the environment we operate in. This is because of the following fundamental relationship:

Result = Process + Environment

This means that external forces are always present, and these factors impact the overall result. No matter how perfect our process is, environmental factors come into play. We must recognize this and account for it. Another implication is evident when we consider the extreme situation in which no formal process exists. In this case, the equation becomes:

Result = Environment

This relationship indicates the result would depend entirely on external forces and thus the outcome would tend to be highly random. Outcomes governed by this relationship could be disastrous for most business scenarios. In practice, businesses usually have some process associated with each task, and the process can be informal (verbal instructions) or more formal (written instructions). In any case, it is insightful to consider the extremes. In the above equations, “Environmental Factors” refers to those things we have little or no control over, and “Process” relates to those elements we control with our formal procedures. The equal sign is not meant to be taken literally; rather, it implies there is a direct relationship between the components of the equation. Note that this book focuses on what we can influence, and that is the process itself, not so much the environmental factors. Note also that following the steps will not guarantee your success, but doing so will significantly increase your chances of success, where “success” refers to getting what you expect. We learn now how to create and implement policies and procedures that specify the best way to think, plan, and work. Graphically, we can visualize this concept as follows:

Set Procedure > Control Process > Get Results

“If you can’t describe what you are doing as a process, you don’t know what you’re doing.” – William Edwards Deming, American statistician, professor, author, lecturer, and consultant, 1900–1993

In the following chapters, we will discuss how to standardize work processes and create highly effective, professional procedures. This is achieved by using work standards. The exercises at the end of this book will allow you to test your understanding and apply your knowledge of these topics. Ultimately, you will create your own work standard. The primary role of a work standard is to guide users through every step of a process, specifying exactly what to do and how to do it. Properly constructed work standards make work processes reliable and ensure predictable results. In effect, work standards are used to train people and manage their output in a consistent fashion; the decision-making and physical labor are delegated to those closest to the actual work. Thus, work standards free managers from operational tasks, allowing them to focus on strategic tasks that will grow the business rather than sustain it. As a result, processes run faster and smoother with shorter cycles. They produce less waste and fewer mistakes, resulting in a much higher quality (sigma level). When work standards are implemented into the workflow, processes are guaranteed to become leaner while delivering more value to the customer at a lower cost to the provider.

The Process House

The “Process House” is a simplistic model used in manufacturing and services to organize processes around a value-chain. You can think of this concept as follows: core processes build the value-chain, while support-processes enable the value-chain.

Core Processes

  • SCM – Supply Chain Management (sourcing and logistics)
  • PLM – Product Lifecycle Management (engineering, research, technology)
  • MFG – Manufacturing (product, operations, delivery)
  • CRM – Customer Relationship Management (commercial, sales, marketing, service)

Support Processes

  • HR – Human Resources (people)
  • FC – Finance and Controlling (money)
  • IT – Information Technology (reports)
  • QM – Quality Management (excellence)

Since most companies today are organized by functions—for example Sales and Marketing, Engineering, Manufacturing, Logistics, Finance, Quality etc—the Process House model can be adapted to any business.

For example, let us consider a typical service company. For this type of business, you would need (1) a commercial process to promote and sell the service, (2) a technical process to develop service features, (3) a sourcing process to purchase hardware, software, and assistance from third parties, and (4) a service delivery process, which is equivalent to the production process in a manufacturing business.

Book Content 

  • Process Hierarchy
  • Process House
  • Core and Support Processes
  • Measuring Process Quality
  • Six Sigma Model
  • Capability Maturity Model
  • Hard Rules of Process Management
  • Lean Strategies for Lean Processes
  • Benefits of Standardization
  • Overcoming the Barriers to Standardization
  • 5 Steps to build a Standard Operating Procedure
  • Procedure Model SIPOC+MOTIV
  • Procedure Template and Exercise
  • Procedure Sample for Warehouse
  • Procedure Sample for Administration
  • Procedure Sample for Parents
  • Frequently Asked Questions (FAQ)

What readers say about “From Chaos to Control”

“With a corporate background, I had always heard about 6-Sigma and quality control. I knew that big companies spent a lot of money on this type of thing because they have entire departments dedicated to quality control. With just that experience, I still did not fully understand what is at stake until I worked as a consultant for medium-size and smaller companies. I then realized how business processes can make or break a business–in particular, the efficiency or inefficiency of those processes. If you do not optimize your critical business processes, you can cause your business to fail. I’m still not an expert on it, but after reading this book, I did learn enough to make some significant changes myself. I didn’t need a dedicated department of professional, high-paid workers to implement quality control and streamline my business processes. You can save a tremendous amount of money by simply following the steps outlined in this book.”

“The book is concise and to the point. The author first provides a good summary of Processes, Standard Operating Procedures, and Work Standards. Very easy reading. It then shows you how to build a Standard Operating Procedure, step-by-step, and how to document it and keep history on how the process changes. Several easy-to-follow examples are then included. They illustrate exactly how to put this theory to work in the real world and how simple it is. The author also outlines that this technique can be applied to ANY process in a business, and goes so far as to show how the technique can be applied on the home front as well. This just underscores how easy it is.”

“After I finished reading it (in a single day), I was able to start streamlining my processes. In particular, we have a big directory of files we use in our daily operations. It has always been a big mess since all the names are complicated because everyone uses their own naming rules, but I used the process outlined in this book to clean it up and put a standard operating procedure in place that will keep the directory clean and the names are standardized. Now we no longer have to take the extra time, and we eliminated the errors it created for our customers. We also addressed privacy issues once and for all. Now everything has a name that makes sense and everyone knows what it means. If someone needs to be trained on it, we have a simple description that explains it all.”

“This book should be carried in the briefcase of every consultant. The information is practical, detailed, and very valuable. I highly recommend it.”