Process innovation framework

1 Copyright 2013 Craig Paxson

Process Innovation Framework

Definition: A Business Process is a set of related activities that turn inputs into outputs and provide value to

a customer. A Business Process Model is the logic by which Suppliers successfully provide value to process

customers.

The Process Innovation Framework combines the Process Innovation Canvas, the Seven Wastes of Lean,

Moments of Truth and Points of Failure with the revolutionary SCAMPER/Process Innovation Matrix to

accelerate the improvement of business processes.

The Building Blocks

CustomerCustomer

Process ValueProcess Value

InputsInputs

SuppliersSuppliers

ActivitiesActivities

Actors

?Decisions

ResourcesResources

A Process Serves its

Customer…

by providing Process Value…

taking Inputs…

from Suppliers…

and applying

Activities…

performed by Actors…

Decisions determine

which Activities

occur

using Resources…

OutputsOutputs

Channels

Costs

Feedback

Feed

Forward

Trigger

Moments of Truth

Points of

Failure

to create Outputs…

delivered through

Channels.

Costs are expenses

incurred by Actors,

Activities and

Resources.

Feedback allows

Customers to inform

Suppliers of their

success in meeting Process Value.

Feed Forward allows

Suppliers to modify

the behavior of Actors.

Triggers start the process.

Where the Process

touches the Customer

Handoffs and

Decision points in

the Process

Together these fourteen building blocks form the Process Innovation Canvas.


Customers

Inputs Outputs

Feedback

Feed Forward

TITLE DRAWN BY

REVISED

Business Process Model

Actors Channels

Costs

Process Innovation Canvas

Process Value

Suppliers

Activities

Resources

Copyright 2012 by Craig Paxson

Points of

Failure

Moments of Truth


Customer

Every process serves one or more Customers. Customers are defined as any people or organizations who

consume, or use, the product or service the process outputs.

Customers may be internal (existing within the organization) or external (existing outside the organization).

Customers provide feedback to suppliers about the process outputs. External customers may use their power of

choice of not using the process to influence the suppl ier; internal customers may not have a choice, so feedback

will exist in other ways.

Things to remember about Customers:

- Customers can be Internal or External.

- Customers provide feedback to suppliers about the output of the process.

Process Value

Process Value is the reason the process exists, the “why” behind the process. It is easy to confuse process

outputs with Process Value. For example, a report may be an output, but the Process Value is really information

to be used in decision making. We can also think of the Process Value as the desired result or outcome of the

process. Defining the Process Value appropriately can open up new avenues for design of the process.

Inputs

Inputs are items or information the process starts with and transforms into outputs. Inputs come in two flavors:

- Items – information or supplies


?Decisions

Triggers

Triggers – Triggers “start” the process. For instance, inputs to an accounts receivable process may include

purchase orders and invoices. It is the receipt of the invoice that “triggers” the process to start.

Suppliers

Suppliers provide the Inputs (materials, supplies and information) for a process to work on and also provide the

trigger that tells the process when to start.

Activities

Activities are generally easy to identify using traditional process mapping or flowchart techniques. Activities

may include value-add work and non-value-add work.

Decisions

Decisions are made by Actors and govern which Activities occur. A Decision specifies what needs to be done, as

opposed to an Activity, which specifies how something is to be done.

Actors

Actors are the people or systems in a process that perform the Activities of the process. Actors use resources to

perform the Activities.


Resources

Resources are used by Actors to perform Activities. Examples of resources may be machinery, computer

systems or communications systems.

Outputs

Outputs are the end result of the process and will be delivered to the process customer.

Channels

Channels are the means by which the outputs are delivered to the customers.

Typical channels include:

- Physical delivery

- Electronic delivery

- In-Person

Costs

Costs are incurred by the actors in the process, the resources used, the Outputs created and the Channels used

to deliver.


Feedback

Feedback provides the Customer with the ability to modify the process. Feedback comes from the Customer to

the Supplier and contains information about how well the Outputs are meeting the defined Process Value.

Feed Forward

Feed Forward provides the Supplier with the ability to modify the behaviors of the Actors in a process. Feed

Forward may include Customer Feedback, information about future events (volume changes, for example).


Moments of Truth and Points of Failure

Moments of Truth

Moments of Truth – the points at which activities or outputs touch the customer.

Points of

Failure

Points of Failure – points in the process where two the process interacts with the Customer, two Actors interact,

an Actor uses a resource, or a Decision is taken.

Points of Failure are the most likely points in the process where things can go wrong, and therefore the most

likely places for improvement.

The total number of Points of Failure is a good indicator of how efficient a process is. The fewer the number of

PoF, the more efficient. We can track how much a process has improved by monitoring the number of PoFs

reduced during process improvement activities.

After diagramming the process, we should list the MoTs, PoFs, the actors involved or the decision taken.


The Process Wastes

Once we are finished using the Canvas to describe the purpose, inputs, process and outputs of our process, we can start innovating. Innovation is really a game of driving waste from the process.

We can look at the value of the process, and the outputs and steps used to create it and see there are three types of steps and outputs:

A. Steps that definitely create value. B. Steps that create no value, but are necessary given the current state of the system. C. Steps that create no value and can be eliminated.

Of these, B and C create waste. The Japanese have termed waste muda and categorize it into seven types:

1. Overproduction: Producing more than is needed, faster than needed or before needed. 2. Waiting: Idle time that occurs when co-dependent events are not synchronized. 3. Transportation: Any material movement that does not directly support immediate production. 4. Processing: Redundant effort (production or communication) which adds no value to a product or service. 5. Inventory: Any supply in excess of process or demand requirements. 6. Motion: Any movement of people which does not contribute added value to the product or service. 7. Defect: Repair or rework of a product or service to fulfill customer requirements.

We often think of waste number 7 (defects), but rarely think of the other six.

All of these wastes are present in every process. For example, in medical claim processing we find mailing paper documents (transportation), claims held up waiting for more documentation (inventory), staff who only work special claims (inventory - yes staff is inventory), time spent waiting for supervisor approval (waiting), checking balances multiple times to see if it has changed (over processing), generating multiple invoices (overproduction), creating electronic and paper records (overproduction) and incorrect billing (defects).

Alternatively, we can group these wastes differently, to make it easier to think of them across a business process.

People Wastes

1. Assignment Waste – Completing an unnecessary or inappropriate task. 2. Waiting Waste – People waiting for information, resources or approval. 3. Motion Waste - Any movement of people which does not contribute added value to the product or service. 4. Processing Waste – completing an activity in a non-optimal way. Any method to complete a task that is not

optimal creates waste.

Process Wastes

1. Control Waste – Energy used for supervision or monitoring that does not produce improvement in the process.

2. Variability Waste – Resources expended to compensate for or correct outcomes that deviate from the expected or optimal outcome.

3. Tampering Waste – The effort required to compensate for changing a process and not understanding all the consequences of the change.

4. Work-Around Waste – when resources are used to create informal processes to replace official processes. 5. Uneven Flow Waste – Inventory waste inside the process – inventory that piles up between steps of the

process. 6. Checking Waste – Effort used for inspection 7. Error Waste – duplicate effort to rework or replace work that is rendered useless by an error.


8. Inventory or Work-in-Process Waste – resources applied to a process before they are required, raw material or information that is not being used, or finished output that is not passed to the customer.

Information Wastes

1. Translation Waste – the effort required to change data, formats and reports between process activities or actors.

2. Missing Information Waste – effort required to remedy the consequences of missing information 3. Hand-Off Waste – Effort to transfer information, work or materials between actors. 4. Irrelevancy Waste – effort used to manage unnecessary or irrelevant information 5. Inaccuracy Waste – effort used to create incorrect information

So now we can identify the wastes - those steps or outputs that don't contribute to the overall value of the process. Our next post will discuss a simple way to innovate in the process, using a tool called SCAMPER.


SCAMPER

SCAMPER is an acronym used in creativity and Lateral Thinking to stimulate creative thought. The letters in

SCAMPER stands for:

Substitute

Combine Adapt / Automate

Modify

Put to another use

Eliminate

Reverse

We apply these mnemonics to the Canvas, using each trigger in each block in the Canvas.

For example, we can ask in the Output block – can this output be Put to Another Use? Can we Eliminate the

output altogether? Or in the Activities block, can we Combine two activities? Can an activity be Automated?

The following matrix will explore options for each intersection of block in the Canvas and the SCAMPER

trigger.


SCAMPER / Canvas Innovation Matrix

Substitute Combine Adapt / Automate

Modify Put to Another

Use

Eliminate Reverse

CustomerCustomer

Is there a Customer who can better utilize the Output?

Can this Customer use Outputs from other processes?

Can we change how the Customer uses the Output?

Can we skip this Customer and give the Output directly to the Customer’s Customer?

Can the Customer give us a different Input to the Process?

Process ValueProcess Value

InputsInputs

Can we substitute one type of Input for another?

Can we combine multiple inputs into one?

Can we modify an Input to be better used?

Can we use an Input in another process?

Do we need this Input to provide the same Process Value?

Where does the Input come from? What process Output is it?

Trigger

Can the Process be initiated with a different trigger?

If the Trigger is manual, can it be automated (either the trigger generation or consumption)

Can the Trigger be made cheaper or more reliable?

Can this Trigger initiate more than one Process?

Can we eliminate this Trigger and use a different one?

What creates this Trigger? Can that process change?

SuppliersSuppliers

Can the Input come from a different Supplier?

Can one Supplier supply more than one Input?

Can we eliminate a Supplier and replace it with something else?

What Inputs do we give to the Supplier? Can we change those to improve the supply?

ActivitiesActivities

Can we perform the same action with a different activity?

Can we combine two activities into one?

Can we automate the activities?

Can we change an activity to make it easier?

Can this activity give us a different result?

Can we eliminate this activity?




Use

Eliminate Reverse

Actors

Can someone else do this process?

Can one person perform the activity two are now?

Can we eliminate this actor?

Can someone else make this decision?

Can this decision be automated?

Is the business logic in this decision correct?

ResourcesResources

OutputsOutputs

Could a different output obtain the same process value?

Can two outputs be combined and give the same value?

Can this output be changed to create more value or less cost?

Can the customer use this output in a different way?

Is this output necessary for the process value?

What is this output an input to? Does that create possibilities for improvement?

Channels

Can the output be delivered differently?

Does the output take two different channels? Can those be combined?

Feedback

Can feedback be changed to control the process better?

Are there multiple feedback mechanisms that can be combined?

Can the feedback automatically control the process?

Can feedback be used in a different process? Is there feedback from a different process that could be used?

Is this feedback necessary? Is it used?




Use

Eliminate Reverse

Feed Forward

Can feed forward be changed to notify the customer better?

Are there multiple feed forward mechanisms that can be combined?

Can the feed forward automatically control the next process?

Can feed forward be used in a different process? Is there feed forward from a different process that could be used?

Moments of Truth

Points of

Failure

Can the same actor perform the two activities? Can one activity replace the two?

Can one of the two activities be eliminated?

Can we to the activities in the reverse order?

As you can see, the SCAMPER triggers bring up many possibilities for process innovation. Remember, SCAMPER

should be a trigger for idea generation and the matrix above is just a few of the possible uses for SCAMPER in

the Innovation Model.


What is the Problem?

According to Masaaki Imai in his book “Gemba Kaizen,” every process value is bui lt on a combination of quality,

cost and delivery. These three characteristics are not separate, but closely interrelated. Quality in our process

model means the ability of the output to deliver the process value. Cost is the amount of effort and resources

used to create the process output and deliver it to the customer. Delivery refers to the delivery of the correct

amount of process output to the customer at the right time.

All process problems are related to one or more of these factors. Solving a problem related to delivery, such as

how long it takes to create the output, may not be the proper approach if the output doesn’t deliver the value

the customer needs.

Using the Framework

Step 0 – determine the “problem” with the process. The problem will always be a variation of Quality, Cost or

Delivery.

Step 1 – determine the “outer edges” of the process – the Value, Customer, Supplier and Triggers.

Step 2 – map the other blocks of the Canvas as necessary. Not every building block is necessary, or presen t in

every process map.

Step 3 – determine all Moments of Truth and Points of Failure

Step 4 - apply the SCAMPER triggers to create opportunities for improvement

Step 5 – look at the Wastes in the process

Step 6 – repeat.

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