6 Process Improvement Tools for Every Business Leader
This post was originally published on online.husson.edu
Organizations and businesses are always looking for ways to become more efficient.
One method used by organizations looking for greater efficiency is to rely on process improvement tools. These tools help streamline organizations by offering different ways to organize and measure goals, reduce waste and decrease completion time.
One challenge for companies is that different process improvement tools work in different situations. It can sometimes be difficult to know exactly which tool should be used in which situation.
Here are six process improvement tools that every organization and business leader can use moving forward.
SWOT analysis, which stands for strengths, weaknesses, opportunities, and threats, is a process that allows organizations to efficiently allocate their resources in ways that can maximize revenue growth and profitability.
SWOT is a basic analytical tool that assesses what an entity (including a business, industry, organization, etc.) can or cannot do, by examining both internal and external factors. Using the data available to organizations, a SWOT analysis discerns what helps an entity accomplish objectives and what obstacles the entity has to overcome, or minimize, to achieve target outcomes.
In 2015, The Coca-Cola Co. used a SWOT analysis to determine how it could become more efficient. The SWOT analysis found that the company has many strengths, including a recognizable brand name, a vast distribution network and large market shares across the world. Weaknesses identified included a rising demand for healthy beverages. Coca-Cola addressed these concerns and within a year, its dividend per share rose for investors and the stock price gained $7 per share.
A checklist is also a process improvement tool. It’s similar to a list you’d tape on your refrigerator. It identifies tasks to complete, remember or consider.
An effective checklist contains a list of actionable items. Checklists can be used in any profession. When a checklist is used by everyone in the workplace, work can become more efficient.
A Pareto chart contains both bars and a line graph. It graphically displays data about the frequency of problems or causes associated with process breakdowns. When there are many problems or causes, organizations should focus on the one that happens most often. Pareto charts allow managers to study the frequency of issues that arise, as well as the cost and amount of time employees spend addressing specific issues.
The topics with the highest frequency or cost are listed on the left in descending order as the graph is read from left to right. The topics on the left side are more significant or time-consuming than those on the right side. This gives organizations a way to see what issues are taking up the most time compared to others.
A Pareto chart is best used when analyzing data about the frequency of problems in a process, when there are many problems and a company wants to find which are most significant, and when analyzing broad issues by looking at specific components.
Also known as a fishbone diagram, this process improvement tool helps “to visually display the many potential causes for a specific problem or effect.” It is especially useful in a group setting or for situations with little data for analysis.
To construct a cause-and-effect diagram, start by stating the problem in the form of a question. For example, “Why is the trash picked up late?” The rest of the fishbone then consists of a line drawn across the page, attached to the problem statement, and several lines, or “bones” vertically protruding from the main line with different categories.
These categories go along with the problem statement and for each category, a group will brainstorm each cause and try to identify why the problem occurs.
A control chart helps managers understand process variability. For example, they can help organizations better understand how processes change over time. The data on the chart is plotted and ordered around time spent.
This process improvement tool is used to learn whether the process variation is consistent (in control) or unpredictable (out of control). A control chart is best used when studying ongoing processes in order to find and correct problems. They’re also helpful in predicting an expected range of outcomes from a process, and determining whether a process is stable.
Mind mapping is a creative and logical process improvement tool for note-taking and note-making that literally “maps out” your ideas and notes.
Mapping out notes gives businesses and individuals a visual representation of what their goals and problems are. This allows them to better understand and resolve these issues in order to achieve their goals. It’s also an easier way for individuals to see areas of concern and brainstorm ideas about how to address them, without a structure or order.
Learn More About Process Improvement Tools in Business
Businesses take advantage of process improvement tools every year to help streamline their company, increase efficacy, and maximize time and cost. Learn how you can make your employer or company more efficient with Husson University’s BS in Business Administration. Our unique degree program provides you the foundational skills you need for a successful career in business, including fundamentals in marketing, finance, sales and more. Our flexible online format allows you to balance your education with your busy life, and you’ll learn from faculty with real-world experience who have your success in mind.