![]() Identify value-add activities and bottlenecks Business Process Modeling Notation (BPMN) Diagram Example (Click on image to modify online) Business Process Flow Template (Click on image to modify online)Ģ. This platform will help you define processes and orchestrate them in an easy-to-understand, completely transparent flowchart. You can use a BPMN diagram, flowchart, swimlane diagram, value stream map, or whatever makes the most sense for your business processes.įor a more sophisticated and easily shareable approach, use Lucidchart. In other words, write it down and map them out. When examining your processes, first translate the obscure into the concrete. Now armed with a process efficiency definition and different formulas and metrics you can use, it’s time to examine each step in every process and eliminate (or significantly lessen) waste, redundancy, errors, and delays to maximize the work you and your employees do.Īs you try to improve process efficiency, make sure to follow these steps. By examining all the processes in your company to determine where efficiency could be optimized (or analyzing other process efficiency metrics, depending on your goals), you can save you money while saving your employees’ sanity. ![]() Your business has dozens of processes, both complex and simple. Quality (i.e., the number of outputs that are acceptable for use or free of defects).Profitability (i.e., the relationship between total sales and profit).Throughput (i.e., the output of a process or machine for a unit of time).Capacity (i.e., the amount that can be produced within a specific timeframe).That’s when you need to look at other types of process efficiency metrics, such as: For instance, you may be producing a lot of bubblegum, but one out of every 10 pieces is not the appropriate size. These calculations are not the only measures of success that may be relevant to your business. The higher the percentage, the most efficient your processes are. Your company would be operating at 150% efficiency.Ī process that is over 100% is considered to add value. For example, say your company spends $500,000 a day to pay for the labor and materials required to manufacture chewing gum, and your company produces $750,000 worth of gum daily. Typically, the value will be a dollar amount. According to Lean manufacturing standards, value-added time should make up more than 25% of your process.īusinesses have also used this formula to determine overall process efficiency: Total lead time refers to the time it takes to complete the entire process cycle, which includes both value-added time and wasted time (such as waiting for the next step). ![]() Value-added time refers to the time spent actually creating your product. ![]() To measure efficiency, you can use this process cycle efficiency formula: How do I measure process cycle efficiency? But if you have 300 workers and they’re producing 150,000 packs of gum a day, you most likely have a business supported by efficient processes. And you should get out of the gum manufacturing business. The definition of process efficiency is essentially “the amount of effort or input required to produce your business’s product.”įor instance, if it takes 300 workers to make a single pack of gum, your process efficiency is abysmal. In this article, we’ll explain what process efficiency is, show you why it’s so important to maximize, and then teach you how to become the process efficiency master of the universe. Evaluating the processes existing within your company and then tracking them, improving them, and measuring their success is vital to any business. In fact, without truly improving your company’s process efficiency, your bottom line could face irreparable damage, and your employees (not to mention your customers) could become fed up with the way your business operates. Your business relies on meeting quotas and benchmarks to thrive, but knowing what the end goal is and knowing how to get there most efficiently isn’t easy without the proper guidance. ![]()
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