Improving Municipal Government Processes

How to Conduct a Customer Focused Process Audit

© Quality Minds, Inc. June 2009

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What is a Process?• An activity, using resources, managed in

order to transfer inputs into outputs. – Often the output from one process forms the

input to the next process.

ProcessInputs Outputs

1. Material

2. People

3. Procedures

4. Customer requirements

5. Drawings

1. A part

2. A critical dimension

3. A critical characteristic

4. Communication

5. Data

6. Information

Input

Step

1

Step

2

Step

3

Step

4Output

A process may have multiple steps

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The Case for Process Audits

• Fire Fighting– Most organizations consistently check the products or services

that are provided to customers. But this is a reactive check.• The product or service is already completed. Costs, man hours,

etc. are tied up in the completed product or service. If the product or service is nonconforming, you must start over.

• Be Proactive– Good processes yield good products and services. Bad

processes yield bad products and services (garbage in equals garbage out!). Instead of focusing on the output of the process(products and/or services) spend time and resources checking the health of processes.

– If you continuously check (audit) processes and use the results to take improvement steps, you will continuously improve the products and services created by the process.

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How to Perform a Process AuditStep One: Define the Process

• Before you audit anything, there must be a standard in place to audit against. Simply put, auditing is “say what you do (via a standard) and do what you say”

• Three Methods for Creating a Standard (or definition) of a Process– Process Flow Diagram– Deployment Diagram– SIPOC Diagram

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Creating a Process Flow Diagram

1. Determine the start and stop points to your flow of process steps . The stop point is typically near the customer.

2. Walk through the flow, writing down the process steps as they exist now (Rule of thumb: Pretend your are the product or service). Make sure you use a noun and verb to describe the process step.

3. Once you have roughly mapped out the process, make it more formal by adding symbols.

4. Once finished, sign and date the flow diagram with a revision level.

Activity

(Process Step)Decision Point Start/Stop

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Creating a Deployment Flow Chart (Swim Lane)

1. Here a "department" or "agency" dimension is added horizontally along the top of the chart. You may use individuals, groups, departments, functions, etc. -whatever kinds of 'units' play major roles in the process.

2. Draw vertical lines to separate the functional boundaries.

3. When the flow moves from one function to another, a horizontal line ideally denotes this.

4. Apart from the ideally horizontal moves between functions, aim when possible to draw the sequence of activities from top to bottom.

5. Use the task and decision-making symbols as before and always connect symbols with arrows indicating the direction of flow.

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SIPOC Diagram

• Suppliers: The entities that provide whatever is worked on in the process (information, forms, material). The supplier may be an outside vendor or another division or a coworker (as an internalsupplier).

• Input: The information or material provided by the supplier and used by the process..

• Process: The steps used to convert inputs into outputs. (some steps are value added and some are not value added)

• Output: The product, service or information being sent to the customer. This is what the customer pays for. He/she wants output:– With good quality– Delivered on time – At a competitive price

• Customers: The next step in the process, or the final (external) customers.

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Creating a SIPOC Diagram1. Create an area that will allow the team

to post additions to the SIPOC diagram. This could be:• A transparency (shown with an

overhead projector) made of the SIPOC template

• Flip charts with headings (S-I-P-O-C) written on each

• Headings written on post-it notes posted to a wall.

2. Begin with the process. Map it in four to five general steps.

3. Identify the outputs of this process. 4. Identify the customers that will receive

the outputs of this process.5. Identify the inputs required for the

process to function properly.6. Identify the suppliers of the inputs that

are required by the process.

COPIS

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Levels of Measurement for SIPOC Diagram

Inputs Step One Step Two Step ThreeOutputs

S I P O C

Step One

Step Two

Step Three

Macro View-All Process Steps

S I P O C

Micro View-Each Process Step

Step Two

Step One

Step Two

Step Three

Etc.

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How to Perform a Process AuditStep Two: Perform the Audit

• Once you define the process, you can begin auditing the process

• Perform the Audit in Three Phases:– Understand the Customer

• Requirements• Voice of the customer

– Understand the Process• How was the process created?

– Performance of Process• Assess inputs and outputs

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Get copy of SIPOC diagram for process

Pick a process to audit

What is the voice of the customer?-Quality, Delivery, Satisfaction, Etc.

Write down the customer’s critical requirements

Review customer’s requirements with creators of process

Get SIPOC diagram for process steps to be evaluated in walk through

Start third phase of audit by interviewing supervisor

Is there a internal specification?

Review it and document results

Summarize Results

Issue audit report

Go through the requirements and make sure the organization agrees with the requirements. If there are exceptions, make sure they are being addressed.

Does it match the customer’s specification?

Do they match?

Are they linked?

Find out how he/she manages the department. What performance metrics are tracked?

How to Conduct a Process Audit

Yes

No

Get copy of process flow diagram or deployment diagram

If applicable, get copy of customer’s specifications and/or requirements

Using the process flow diagram and SIPOC diagrams, walk through the process

Travel as the product or service does. Evaluate key outputs and inputs at each step. How well are the outputs meeting customer requirements? If requirements are not met, what is done? What is the quality of each input? Are they delivered on time? If an input is bad, what is being done with the supplier?

Be sure and present results to leadership

(85/15 rule)

Phase One

Phase Two

Third Phase

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How to Perform a Process AuditStep Three: Check Results of Audit• It is critical that the results of audits be

reviewed by organizational leadership• Leadership Support makes the Difference:

• Deming’s 85/15 Rule: 85% of problems in any organization are within the system and are the responsibility of leadership while only 15% lie with the worker

• Systems are made of processes. Processes are used by workers toproduce products and/or services. If the system is bad, the processes are bad and consequently service and/or product will be bad.

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Leadership Review Sessions

• To continuously improve an organization, Leadership must consistently meet to review performance and highlight opportunities for improvement– Some performance metrics will be reactive in nature

(ex. customer satisfaction)– As much as possible, proactive measures of

performance must be on the meeting agenda. Process audits are strong, proactive tools and the results of audits must be used as a performance measure.

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How to Perform a Process AuditStep Four: Act on Results

• Once results are reviewed, actions must be taken to improve processes

• The determination of actions is also the responsibility of leadership

• Audit results will present two types of opportunities:– A complete system breakdown– A process breakdown

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Department A Department B Department C

You conduct process audits in three different departmentsIn process step three of department A, you find a work instruction that is not being followedIn process step one of department B, you find a work instruction that is not being followedIn process step four of department C, you find a work instruction that is not being followed

You have solid evidence that work instructions are not being followed in the organization. You don’t necessarily have bad output as a result of it but you could. Because you see the same issue in three different departments, the system is broken. Take action now to fix this issue: Better training, Better work instructions

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Department A Department B Department C

You conduct process audits in three different departmentsIn process step four of department C, you find a work instruction that is not being followed. No other instances were found of instructions not being followed. This is not a system issue but rather a process issue.

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Continuously ImprovePlan Audits-Make sure there is a schedule and resources to conduct audits

Conduct audits (on time) per the schedule

Make sure a process is in place for Leadership review of results

Make sure there is a process in place for Leadership to determine improvement actions

Never

stop

the

cycle

!