Posted by: ahmedashfaque | February 10, 2010

What is process improvement

We often hear about process improvement initiatives. What is process improvement? How it is different from other initiatives taken by managements?

Management of business organizations often take various kinds of initiatives. Some common types of initiatives include drive to have a better brand image, reduce cost of operations, create awareness etc.

The aim of these initiatives are either to increase more sales of products or services (better top line) or decrease cost of operations (improve bottom line or increase margins). Any process improvement initiative can serve either of the two goals. Process improvement deals with improving bottom lines by increasing productivity. At the same time, improving quality of the product (off course by doing process improvement) makes sure that the business house has a better perception in the market place. This leads to more sales.

Process improvement initiatives help in achieving the above mentioned goals. To produce products or services, any business house deploys men, machinery, and other resources (material, information, expertise etc.). Through a set of processing steps, material or information is transformed and the business house then sells the finished information or product. The processing of information or material requires time, capital and operation costs. The time, capital or operation costs can be reduced further from existing levels using some techniques like revamping machinery, reducing operation time or replacing existing operation procedure with a better operation procedure.

Similarly quality of produced product or service can be improved by the same set of options viz. revamping machinery or replacing existing operation procedure with a better operation procedure which may result in better product or information quality.

Any of the decisions implemented to achieve reduced production costs, or reduced production time or better product quality can be termed as a process improvement initiative.


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