·         improve operational efficiency, and

·         manage risk more effectively.

As the financial crisis unfolds, the implications for companies are becoming clearer. Companies need to:

·         improve operational efficiency, and

·         manage risk more effectively.

How can this be achieved? – by focusing on the critical processes in the business. Profitability can be improved and risk reduced and it does not require process redesign to achieve significant operational improvements.

Gartner claims that by “making the current-state handoffs, timings and responsibilities explicit, productivity improvements of more than 12 percent are normally realized.” Business Process Management Success Hinges on Business-Led Initiatives, Gartner, 26July 2005. This can be achieved quickly and easily by simple process mapping. Risk is also reduced by a common understanding of processes, handoffs, timings and responsibilities.

Many organizations have documented, managed and improved their business processes by implementing formal process management systems. A study by Surrey University of 222 companies showed:

·         profit margins – more than twice the industry average,

·         return on capital employed (ROCE) – averaged more than double the industry average,

·         sales per employee – 40 percent higher, and

·         profit per employee – three times the industry average.

The first step is to quickly gain a common understanding of your key business processes through process mapping and identifying process simplification opportunities. Simplification can produce quick gains with minimum resources and upheaval to the business.

4TQToolKit Process Management software provides the tools for you to quickly and easily process map and simplify your operational processes.

For further information, go to www.axioninnovations.com.au

Add a text figure to the process map by accessing the text tool in the Toolbox menu or via the pop-up menu on the workspace.   A dialogue box will appear allowing the insertion of a link to a picture file as shown in the example below. Step 1 in the process map has an action that requires the wearing of hearing protection. The hearing protection image is inserted by entering in c:\4tq\Images|PPE\EAR_52X52.BMP” in the field between the Picture and the Edit button and Save the file.

Only small images may displayed in the text figure.  If the image does not appear in the text figure it may be too large.  Text figure size can be changed by increasing the font size or the figure scale size say from 5 X 2 to 5 X 3 in Preferences.

Sample images are provided in the Images folder in the System Path.  For further information contact Bob Digance at www.axioninnovations.com.au

Text Image Example

Examples are provided in the attached 4TQFlow demonstration file TAGS_DMO.flw.  Click on the link http://www.axioninnovations.com.au/TAGS_DMO.FLW  to download or run the examples file.

4TQFlow Tags Table

Click on the following link http://www.axioninnovations.com.au/4TQscribe.htm to view a video on how to use 4TQScibe to reduce your process mapping time and improve process mapping effectiveness.

For further information go to www.axioninnovations.com.au

Introduction

What is compliance?  “Adhering to the requirements of laws, industry and organizational standards and codes, principles of good governance and accepted community and ethical standards.”   AS 3806-2006 Compliance programs

The number of compliance requirements has increased in the last few years to a level where it takes significant resources to design, develop, implement, and maintain effective compliance programs.  Also non compliance can result in penalties and damage to your reputation (which in the long term can have the greater impact than penalties).

How do organizations cope with managing compliance?  Generally they have a range of policies and procedures for the conduct of their business that include compliance management issues.  However they generally lack a coherent structure for managing and demonstrating compliance.  In particular, there is inadequate risk assessment and mitigation of compliance requirements.

4TQPolicy Compliance Manager is designed to assist organizations manage compliance requirements effectively.  Our approach is focused on:

• Providing a coherent structure that enables you to identify and assess your compliance obligations,
• Doing risk assessments to prioritize activities such as policy development and procedure development so compliance obligations are translated into practice.
• Providing a means of integrating compliance obligations into existing practices and procedures.

The challenge in designing and developing a compliance program is to quickly get an overview of your compliance requirements and how these are currently being addressed and then produce a gap analysis.

Purpose

This article outlines how to:

• use 4TQPolicy to develop a coherent structure of compliance obligations;
• carry out an initial risk assessment of these obligations to prioritize the development of policies and procedures that translate the compliance obligations into practice; and
• identify work needed to implement a compliance program.

Compliance Program Development Outline

• Review compliance obligations documentation to determine the plan categories (such as Government, Legal, Financial, Business and Standards) and compliance plans (such as Business Objectives, Legislation and Standards).
• Enter compliance plans into 4TQPolicy and produce the compliance plan register.
• Determine the top priority plans for your organization.
• Develop the initial policy sections and clauses based on your priority plans.
• Map the compliance obligations in the plans to policy clauses.
• Identify existing written policies for policy clauses and enter references in the policy statement text windows.
• Carry out a high level initial risk assessment of policy clauses including tagging of clauses that do not have identified written policies.
• Produce a gap analysis report based on the risks.
• Determine and enter in section implementation or review dates as appropriate.
• Load compliance obligation information into 4TQExplorer to allow mapping into the ways of working procedures.
• Review the 4TQPolicy compliance management information to identify next steps such as:

·         Verification of compliance obligations and mapping, and initial risk assessments by appropriate managers.

·         Development of policy statements.

·         Documentation of associated processes.

·         Produce project closure report.

Outcomes

• Compliance Obligation Plan Register in 4TQPolicy.
• Policy framework in 4TQPolicy.
• Compliance obligations clauses mapped to policy clauses.
• High level risk assessment for the purpose of prioritizing implementation activities.
• Risk register for compliance obligations.
• Gap analysis report.
• Identification of outstanding work.

Conclusions

The benefits of this approach include:

• Simplification of the compliance obligations information so it is easier to read and understand.

·         Better understanding of compliance obligations’ risks and their associated controls so these obligations can be more effectively managed.

• Producing a prioritised output report that enables focus on the highest risk items first.
• A means of deploying compliance obligations into the ways of working so these obligations are translated into practice.
• The ability to produce up-to-date compliance status reports that demonstrate how compliance obligations are being managed.

4TQPolicy Video

Click on the following link http://www.axioninnovations.com.au/4TQPolicy.htm to view a video on how to use 4TQPolicy to help manage compliance.

About the Author

Bob Digance is a principal consultant with Axion Innovations specializing in business process management and improvement and the effective use of 4TQ business process management applications.  

For further information go to www.axioninnovations.com.au 

• Late delivery
• Poor use of people’s skills
• Poor image
• Low customer satisfaction
• Less ability to respond to customers’ needs.

What is a measure that demonstrates process effectiveness and can form the basis for improvement?   The maintenance industry has been using a measure of Overall Equipment Effectiveness (OEE). 

OEE = availability X performance rate X quality rate

We have adapted OEE to measure Overall Process Effectiveness (OPE) where:

OPE = process availability X process performance rate X quality rate

Availability is the ratio of available time for processing to scheduled process time.

Availability = Available process time / Scheduled process time

For instance in a payment process in an hour three minutes are lost due to printer and computer breakdowns and setup and adjustment issues.  Then the availability is 57/60 = 0.95 or 95 percent.

Performance rate is the ratio of actual process speed to rated process speed. 

Performance rate = Actual process speed / Rated process speed

If the payment process is rated to pay 60 invoices per hour but only achieves forty five then the performance rate is 45/60 = 0.75 or 75 percent.  Reduced speed can be due to issues such as a replacement operator who is untrained or equipment such as an enveloper having to run at reduced speed because it is not set up correctly.

The quality rate is the ratio of the number of items that meet requirements to the total items produced.

Quality rate = Number meeting requirements / Total produced

For instance in the example of invoice processing if three payments in 60 were incorrect then the quality rate is 57/60 = 0.95 or 95 percent.

For the payment process example:

Overall Process Efficiency OPE = 0.95 X 0.75 X 0.95 = 0.677 or 67.7 percent

An appropriate target for process improvement could be 85 percent.  The achievement of 85 percent as compared to 67.7 percent should directly impact on the profitability of the process.

About the Author

Bob Digance is a principal consultant with Axion Innovations specializing in business process management and improvement and the effective use of 4TQ business process management applications. 

For further information go to www.axioninnovations.com.au