BPI - Introduction to Process Efficiency Measurement

Business Process Improvement projects are extensively used by Organizations from time to time to overhaul their existing processes and operations in a bid to improve the efficiency and effectiveness. In the current situation where intense competition and changing business environment calls for Organizations to keep reinventing themselves and building capability as well as flexibility in their operations to meet with the changing customer demands and environment, Business Process Improvement projects are highly effective in enabling process change and build efficiency in the processes.

Business Process Improvement program to be effective calls for specific training in the concept of BPI and the techniques of Statistical Tools, Quality Management systems and other problem solving techniques. The PIT team would have to be equipped with the right skills and training to be able to take up the challenge.

The stage for Business Process improvement is set with mapping the existing process in detail. PIT Leader heads the task of process mapping after discussing with all the members who are involved in the process, going through the actual operations and making observations as well as discussing with the process leaders on all aspects of the process. Process mapping is then followed by marking the specific boundaries that signify the beginning and ending of the process that is under consideration. Further on the inputs, the source of inputs and the output from the process is identified and established. Capturing and checking the data for exact specification, formats and accuracy is very important at this stage.

Once the complete Process mapping is carried out, the next step would entail establishing process measurement and setting up targets. Setting up process measurements enable measuring the process during actual performance and to control the process before attempting to reach the target. Process is measured using criteria of Process effectiveness, Process efficiency and Adaptability.

Process Efficiency

The second most important criteria of measurement of a process is its efficiency. Efficient execution of the process is very important for very many reasons. In most cases the processes are normally found to contain inefficiencies built over a period of time. First and foremost every customer who is buying a Product or a Service expects efficiency of service. Depending upon the nature of business or the service, the process efficiency can be ascertained. Efficiency of service in a restaurant can be measured in terms of time taken from Order to Delivery of Food and in case of an Airline; the check in process efficiency could be of prime importance to gauge service efficiency. Take the case of Sales Order processing; the process efficiency would be of importance when it comes to the calculation of total time taken from the Order to delivery to the end customer.

Process efficiency is not only important from the point of view of external customer alone. Internally too, process efficiency has a bearing on the operations cost as well. Internally the process efficiency can be measured using several criteria including but not limited to - Total processing time, Resource utilization per unit of output, Non Value Added Cost, Non Value Added Time, Cost of Quality etc.

Measuring the process time at all stages throws up a lot of factors that are aiding or harming the process efficiency and thus provides ample information to be able to work on process control and improvement. Measurement of process time or cycle time will also throw up non value added time as well as activity which can be acted upon for correction. Furthermore, any deficiency in the training or skills of the workers and any delay or inefficiency from the related processes that are supposed to provide the inputs will also show up with the measurement of cycle time of the process.

Efficiency of the process has a direct bearing on the Customer expectation and the promise to the Customer as well as to the overall operational cost. Therefore putting in process efficiency measurements in place will help bring out the areas and factors that are needed to be controlled, managed, changed and altered in the process of improving the said process.

Authorship/Referencing - About the Author(s)

The article is Written and Reviewed by Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.