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Have you ever wondered if effort or time is being wasted on outdated processes? Are you struggling to balance production demand with clunky workflows that slow down your team? You might need to implement process optimization. Our Process Optimization Methodologies framework includes the top tools every business needs to optimize its workflows. In this explainer, we'll cover the key takeaways from the framework such as root cause analysis, current reality tree, and the 5S Methodology. We'll also cover Toyota's Production System and show you how it can be applied to any business.

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Process optimization can significantly impact customer satisfaction. By streamlining workflows and eliminating inefficiencies, businesses can improve their productivity and deliver products or services more quickly and effectively. This can lead to improved customer experiences, as customers are more likely to be satisfied when they receive high-quality products or services in a timely manner. Additionally, process optimization can also help businesses to better meet customer expectations, as it allows them to more accurately predict production times and manage customer expectations accordingly.

Some tips for implementing process optimization in a small business include conducting a root cause analysis to identify the source of inefficiencies, creating a current reality tree to visualize the workflow, and applying the 5S Methodology for organization. Additionally, you can learn from Toyota's Production System and adapt its principles to your business.

A business can maintain its process optimization efforts over time by regularly reviewing and updating its workflows. This can be achieved by using tools such as root cause analysis, current reality tree, and the 5S Methodology. Additionally, learning from successful models like Toyota's Production System can also be beneficial. It's important to remember that process optimization is not a one-time task but a continuous effort that requires commitment and regular monitoring.

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The objective of process optimization is to eliminate any processes that don't help you achieve a goal. When used correctly, the framework will improve everything from scheduling to inventory and most importantly, customer satisfaction. The results are proven. Let's begin with the system that began modern process optimization: the Toyota Production System.

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Process optimization can foster innovation in a business by eliminating unnecessary processes and improving efficiency. This allows for more resources and time to be dedicated to innovative activities. Furthermore, the process of optimization itself often requires innovative thinking and problem-solving skills, thereby fostering a culture of innovation within the organization.

Some metrics to measure the success of process optimization include efficiency, effectiveness, quality, productivity, and customer satisfaction. Efficiency can be measured by the time it takes to complete a process, while effectiveness can be gauged by the success rate of the process. Quality can be assessed by the number of errors or defects, productivity by the output per unit of input, and customer satisfaction by feedback or surveys.

Process optimization aligns with a company's strategic goals by eliminating any processes that don't contribute to the achievement of these goals. It improves various aspects of a business, from scheduling to inventory, and most importantly, customer satisfaction. This alignment is evident in systems like the Toyota Production System, which pioneered modern process optimization.

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Tool highlights

Toyota production system (TPS)

During the 1970s, Japanese firms like Toyota optimized their factories to remove as much unnecessary work as possible. This ensured that they could accurately assemble their products in as little time as possible. For example, they would arrange workspaces in the most optimal configuration to reduce the time that workers spent twisting and turning. As a result, Japanese products were assembled faster and more reliably than their American counterparts.

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One of the most notable examples of successful process optimization is Toyota during the 1970s. They optimized their factories to eliminate unnecessary work, ensuring efficient product assembly. They arranged workspaces in an optimal configuration to minimize the time workers spent on non-productive movements. As a result, their products were assembled faster and more reliably than their American counterparts.

Process optimization aligns with sustainability goals by reducing waste and improving efficiency. By eliminating unnecessary steps and streamlining operations, companies can reduce their resource consumption and minimize their environmental impact. This not only leads to cost savings but also contributes to sustainable development.

Some future trends in process optimization may include the increased use of artificial intelligence and machine learning to automate and improve processes, the integration of IoT devices for real-time monitoring and optimization, and the use of big data analytics to gain insights and make data-driven decisions. Additionally, there may be a greater focus on sustainability and green processes, as well as the use of virtual and augmented reality for training and process visualization.

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The stated goal of the Toyota Production System, also known as TPS, is to create the highest quality products at the lowest cost with the shortest lead time. It's a guidebook that execs can use to parse out the different workflows they need to optimize, such as manufacturing, supply chain, and logistics.

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The training requirements for implementing the Toyota Production System (TPS) are not explicitly stated in the content. However, generally, it would involve understanding the principles of TPS such as continuous improvement and respect for people, learning about the various tools and techniques used in TPS like Just-In-Time and Jidoka, and practical training in applying these principles and tools in the real-world context. It would also require a change in mindset towards problem-solving, efficiency, and waste reduction.

The Toyota Production System (TPS) aligns with lean manufacturing principles by focusing on creating the highest quality products at the lowest cost with the shortest lead time. This is achieved by optimizing different workflows such as manufacturing, supply chain, and logistics.

The role of leadership in implementing the Toyota Production System is crucial. Leaders are responsible for understanding the principles of TPS and ensuring that these principles are applied throughout the organization. They need to create a culture of continuous improvement, where every employee is encouraged to identify and solve problems. Leaders also need to ensure that the workflows are optimized for efficiency and effectiveness.

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TPS pillars

The system has two pillars: The first is Jidoka, a system for automation based around error-detection. To function at the highest levels, people and technology must be integrated in a way where each compliments the other. Jidoka requires team members to stop and notify of any abnormalities and identify which ones were the result of human work and which were caused by machine work.

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The second pillar is Just-in-Time, which focuses on – you guessed it – timing. Under this system, the available production time is divided by customer requirement, which is referred to as Takt Time. This is backed up by "pull production", a method of production control where downstream activities signal their needs to upstream processes. The standardization of these two workflows will create more value with less waste.

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As Taiichi Ohno, the inventor of the Toyota Production System said: "All we are doing is looking at the timeline, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the timeline by reducing the non-value adding wastes." (Slide 32)

Root cause analysis

So how do you determine what processes need optimization in the first place? The answer is root cause analysis. This method of analysis begins at the surface level of a problem and seeks to uncover a deeper issue. Taiichi Ohno used a tool called the 5 Why's framework as part of the Toyota Production System. This is a simple yet extremely valuable approach asking Why five times to get to the root cause of an issue.

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As Ohno said, "Underneath the "cause" of a problem, the real cause is hidden. In every case, we must dig up the real cause by asking why. Otherwise, countermeasures cannot be taken and problems will not be truly solved." To use this tool, start with the surface level problem and ask why. When that question is answered, ask why again. Repeat this process until you get to the fifth why, which is the root cause of your problem. (Slide 19)

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Tree diagram

Another root cause analysis execs can use is a tree diagram. The team begins with an apparent problem and lists out three symptoms that show the scale of the problem. With each symptom, the team can experiment and brainstorm possible root causes. Once all these causes are listed, they are narrowed down to the most likely actual root cause. (Slide 17)

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Fishbone diagram

The most common root cause analysis tool is a fishbone diagram. A problem is shared at the head of the fish. Then, different aspects of the production process are listed out in branches that make up the Fish's skeleton, with their possible causes of the problem listed underneath as the "bones" of the fish. (Slide 18)

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Current reality tree

Another method to identify root causes is with a current reality tree. With this method, we are trying to define what to change in an organization to achieve a breakthrough in performance. For example, inventory can be one of the biggest waste areas as it can often become obsolete and use up capital or labor resources. Prior to 2021, all modern car dealerships followed the "just-in-time" manufacturing system that Toyota pioneered. But this system faced major problems when automakers were hit by semiconductor shortages brought on by the pandemic. Ford and GM experienced production delays, leaving near-complete vehicles sitting around in factory parking lots because they were missing only a chip or two. Toyota was able to largely avoid these issues because it had strategically

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The current reality tree ramework operates under the "theory of constraints", which is a methodology to identify the most important limiting factors that stand in the way of achieving a goal. At the top of the tree is an undesirable effect. In Toyota's example, this effect would be a lack of supply to complete cars on time. This is a resulting symptom of a deeper common cause. The symptoms that contribute to this undesirable effect are then listed out and linke to other common problems. At the bottom of the tree are all of the underlying factors that contribute to this outcome. These conflicts are what need to be dealt with to fix the undesirable effect. (Slide 31)

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Toyota had already experienced supply chain disruptions after Japan's 2011 earthquake, which caused it to confront this issue earlier than other automakers. After its suppliers were disrupted, Toyota built a database of 400,000 components linked to their suppliers. Before 2020, Toyota was able to ask its major suppliers, such as Denso or Renesas Electronics, to keep up to 50 days worth of supply on hand. By July of 2021, that increased to stockpiles with four-months-worth of supplies. Without an analysis of its current reality and constraints back in 2011, it wouldn't have been ready for the challenges of 2020.

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5S methodology

Speaking of the pandemic: with so many labor shortages and supply chain issues, many companies are now looking to process optimization in the form of automation. For instance, retailers like Starbucks plan to replace cashiers with tablets. Walgreens now uses automation to fill prescriptions.. and Sam's Club is using robots to clean their store's floors and scan inventory. These are all efforts designed to bypass labor shortages and streamline processes.

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The 5S methodology is a tool used to create higher-functioning workplaces in the same way. Designed for physical workflows over digital ones, the idea is to make a space make sense. The 5S's stand for: Sort, Set in order, Shine, Standardize and Sustain. As you can see, the definitions are listed under each procedure, while the checklists can be used for stakeholders to list out important items that are often missed and need to be completed. Execs can then use an audit scorecard to check off what has been done. The scores are all added up at the end with a total score out of 30. (Slide 20-21)

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