Measures of Control

Several recent experiences force me to the same conclusion: Organizations that place many controls on their processes do so because their processes are flawed in the first place. Let me give you an example.

A process mapping exercise with a service provider revealed the following:

  • 37.3% of the steps in the process add value to the end product/customer
  • 21.9% of the steps add no value to the process (“wastes”)
  • 40.8% of the steps add no value, but appear to be required for some business or regulatory purpose (“necessary wastes”)

The striking thing about this process is that the majority of the tasks (i.e., 40.8%) are business non-value adding (BNVA)—existing solely to manage the process. The problem with BNVA tasks is that they inhibit workflow in any organization and should be minimized. In efficient organizations, typically less than one percent of process tasks are BNVA. These BNVAs are necessary to comply with legislation.

But organizations heavy with BNVA tasks not only include necessary tasks for regulatory purposes, they also impose upon themselves BNVA steps because they do not trust their processes or systems. To overcome this lack of confidence, more controls are added to the processes or systems in an effort to make them more efficient. This exacerbates the problem.

Where BNVA tasks are truly necessary, they cannot be eliminated, but it is good practice to reduce their cycle time by simplifying the process. In essence, BNVAs are part of the cost of doing business—customers don’t see the BNVAs, but they do pose a time and cost on the business. For example, completing forms for regulators or inspectors in relation to products developed and shipped or services provided.

To enhance business process, organizations should focus on eliminating the non-value adding steps (wastes) and enhancing the value adding steps (activities for which the customer is willing to pay). The best way to do this is by measuring your process, since you can only improve that which is measured—i.e., let data/evidence be your guide.

Realistically, no organization can expect to be 100% productive all of the time, but baseline data will provide you with the means to measure your continuous improvement implementation. Continuously improving your processes will not only help you to decrease control steps (BNVA) and eliminate non-value adding steps (wastes), but it will also provide more value adding work that the customer is willing to pay for and accept.

Only through a continuous improvement approach will your company be able to assure productivity gains in the long term. Not only that, a continuous improvement program will help free up time in your day, so you can focus on more creative and strategic objectives to help you and your organization be even more productive and profitable.