“Sources of variation can be found in the process itself, the raw materials used, the operator’s (employee’s) actions or the environment. For example, software settings / updates, tool wear, humidity, heat, and over-adjusting a machine are all sources of variation.”
“Processes should be value driven and measured and the results carefully analyzed to identify opportunities for improvement.”
Many Managers and leaders ask this question, “When do I know its time to automate a Process?” The simplest answer is that automation of a process is critical when the well-being of your employees is being impaired, too much time is spent on manual input and putting out fires; and less time is dedicated to strategic planning and achieving strategic goals.
Leaders must constantly measure process performance as this includes, process cycle time, lead times, and process costs coupled with benchmark comparisons to truly understand how they fare with their competitors. For example, say you wanted to automate your Accounts Payable function. You would first create a process map to identify inefficiencies in the process, test and implement new controls, track and analyze Key Measures of Performance (cost per invoice, process cost, process cycle time, days to resolve a problem, et cetera) and compare data to your competitors. If you realize that the cost per invoice and process cycle time is significantly higher than your competitors it is wise to consider automation software.
However, before integrating software to automate the process you must compare the total costs and see if new and tested controls or alternative low cost methods can reduce costs and cycle time without the integration.
A process in dire need of automation can be detected by increase in poor quality, delivery and productivity. A process can not run smoothly if any of these process efficiency characteristics (quality, delivery and productivity) is not meeting business and customer requirements.
“When you have insufficient information about a product, process or service, you are unable to control it. Ergo, when a process cannot be controlled, the organization is at the mercy of chance. KPIs must be aligned with the strategic goals of a company as well as with its customers priorities.”