This brings us to business process innovation. And there's huge opportunity here to innovate your business processes and improve the efficiency and therefore the profitability of your organization. Let's take a look at this in a bit more detail then, the cost of operating a business process is related to the rate of flow, or velocity of work through the system. If you can improve the rate of flow of work, then we reduce the cost of the process and we increased profitability. To do that, we need to measure the rate of flow, the end to end flow time in your business processes. And the ones that are really slow are the ones that need to be fixed.

Being able to do more profitable work with the same level of resources is the key to growth and profitability in an increasingly complex environment. By identifying and mapping the flow of work information resources. through each business process. We can see how customer value is created. And we can also see those obstacles the flow that creating efficiencies or destroy customer value. And the thing to ask is How well do your business processes create customer value?

Which processes or which parts of processes damage that customer value in simple terms, and how can we approach business process innovation? Well, I've got three sort of steps here. Firstly, we identify the purpose of the process from the point of view of the customer, since it's the customer who defines the outputs, the quality, the delivery performance that they want. Then we map and measure the process to understand the barriers to achieving this purpose. And then thirdly, we train and support the process team to remove those barriers, fix the problems, and therefore improve the process. And some of the performance measures that we might use and this include the end to end flow time, which is the elapse time, from the start of an order to its completion or its delivery to the customer, the quality the right first time for each step in the process, the level of scrap created at each step in the process, or similarly for rework, customer satisfaction, not just scores of customer satisfaction, but also asking them what pain points what things about the process they don't like.

We can measure work and process the inventory at each stage to see where the bottlenecks are, and we can measure on time delivery. And we would do that with a time series showing the distribution of delivery performance to see the peaks and troughs and look at the factors that may have affected delivery. The key to business process innovation is therefore process mapping. And process mapping is also called value stream mapping. And it's a way to help us see the big picture of a business process. process mapping helps us to identify Every step in the process, from when the customer places an order to the moment when he or she receives the product or service by doing this, and by mapping each activity in step, we can see how the work flows through the process.

And we can identify the issues and constraints, such as delays, duplication, unnecessary steps, and so on. So process mapping makes us to go and see the work in the workplace. And this is a great way to understand how the process works in reality, and how value is created for the customer, and the points where value may be being destroyed. And it also helps us build a relationship with the workplace team. By working with the people in the process, we identify the problems and we identify ideas for improvement. And the aim of mapping the process and business process innovation is to improve the speed and efficiency of the process by removing those steps.

Which do not add value for the customer, which are called waste if you know the mean terminology. Let's look then at a Value Stream Map. And here Firstly, we have a very simple Value Stream Map, the customer places an order, the work flows through four work centers with inventory in between each one. And we see there's a processing time and a wait time for where the inventory is waiting, and then it's delivered to the customer. In reality, no workflow is likely to be that simple. And they're going to be nooks and crannies and kinks and twists in the process, all of which will delay the process, which will cause barriers for the work and which are signs of inefficiency.

The second example here is from a real life process from a company that I did some work for some years ago, and it's a wastewater inspection process. We can see the little red hexagons there are the activities which start the process and then the blue boxes with round corners are the process steps. And dark blue squares are IT systems. And we can see there I've done swim lines to show which department deals with each step of the process. And even that fairly simple process of kicking off an inspection does have a number of complications and quite a number of steps and different points to go through and in process innovation, we will be looking to see which of these steps add duplication which of these calls delay, where do the errors arise in this process, and we will be working with the process team to try and resolve those issues.