Using SWOT Analysis for Process Improvement

I have used SWOT Analysis for years when doing strategic planning but with a couple of minor tweaks, I have found that a SWOT can easily be applied to improving processes. 

SWOT is a four quadrant diagram that represents Strengths, Weaknesses, Opportunities, and Threats.  Wikipedia defines a SWOT analysis as a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. 

Wikipedia further goes on to say that a SWOT analysis must starts with defining a desired end state or objective:

• Strengths:  attributes of the person or company that are helpful to achieving the objective.
• Weaknesses: attributes of the person or company that are harmful to achieving the objective.
• Opportunities: external conditions that are helpful to achieving the objective.
• Threats: external conditions which could do damage to the objective.

Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs.
 
First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated.

Look how quickly the above can map to Process Improvement:

1. SWOT helps identify the strategic objectives we hope to achieve with the new process and helps us determine if the objective is attainable
2. Strengths: identifies the current strengths of the existing process (if any) or what the existing strengths of the new process should be
3. Weaknesses: identifies the current weaknesses of the existing process or the weaknesses caused by not having an existing process
4. Opportunities: identifies external conditions that are helpful to achieving the objective.  An example may be the development of new technology, better access to information, etc.
5. Threats: identifies external show stoppers that could block our ability to achieve our objective. An example may be the fact that an valued supplier does not have access to the new technology or information.
   

The bottom line is that executives identify with SWOT and it can quickly bring focus to the initial planning meetings.

I have included a link to a SAMPLE SWOT in EXCEL format  for those of you that may be interested in exploring this idea further.

Regards,

Jim Pickens


Jim Pickens is the the managing partner for DMAIC.com. http://www.dmaic.com is the complete online resource for Six Sigma consulting, training, software, books, and events.

Six Sigma Blog Sites

I have been doing some research on Six Sigma Blog sites. The following is a list I have gleaned from that research. Please reply to this blog if you have a favorite you wish to share and I will update the post.

Six Sigma Blog

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ASQ Lean Six Sigma 2009

Six Sigma IQ

What is the Difference Between 8D and DMAIC?

One of the most frequent questions we get from people new to Quality Improvement: What in the heck is the difference between 8-D and DMAIC problem-solving methods?

First let's talk about what the similarities are between 8D and DMAIC. Both are step-by-step problem-solving methods. The 8-D Problem-Solving approach has...you guessed it...8 steps! DMAIC has just five phases, but they happen to make up the acronym DMAIC - Define, Measure, Analyze, Improve, and Control.

OK, so what are the differences between 8D and DMAIC? There are probably people who would argue that there are LOTS of differences between the two. But, as we see it, the biggest difference is in Step 3 of the 8D process: Implement and Verify Interim Containment. There is not a comparable explicit step in the DMAIC process. One downside to Interim Containment is that it can give you a false sense that the problem is solved and that you can move onto the next problem. Interim Containment is typically a quick and dirty band aid approach to addressing the symptoms of a problem and not the root cause. But, the reality is that if a business problem is serious enough, it merits a band aid to "stop the bleeding." Then it is up to the team to complete the rest of the 8-D process including removing the "band-aid" once the root cause is found and addressed.

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The primary reason for the failure of the application to meet the needs of the business is the failure to take into account the existing process issues. Therefore, to be truly effective, Business Analysts and Project Managers must concentrate a portion of their efforts on activities associated with traditional process improvement. Lean Six Sigma for Services and DMAIC is an ideal method to use for these types of activities.

When performing business analysis, specification development, and project planning there are several fundamentals that I always take into consideration:
1. The business process must be fit for the purpose it is intended:

• Fundamentally it is free from quality defects and steps that add no value to the process
• Its processing steps are well defined and as straight through as possible
• It manages exceptions and hand-offs with minimal motion
• It follows industry best practices and meets regulatory and compliance requirements

2. The application design and particularly the underlying data models:

• Must support continuous process improvement
• Must support actionable business intelligence and data driven decision making based.
• Must support regulatory and compliance requirements without burdening the process or the people working within the process
• Must facilitate a regulatory or compliance audit

3. Business Processes are difficult to analyze and automate because:

• They are typically slow because there is too much work in process, too much time spent on non-value-add work (e.g. over-lapping internal controls and re-keying of data), and they are rife with exception handling
• They are less visible in nature, and have a tradition of individuality and freedom, that makes problems harder to identify and fix.
• They are characterized by a lack of meaningful and actionable data for decision making. The computer applications supporting the business process does not capture the necessary metrics to support a root cause analysis and continuous process improvement.
• They seldom follow a best practice model
• They often fail to ensure customer privacy or facilitate segregation of duties (e.g. SOX compliance)

4. Business process owners and their staff cannot articulate their needs to the level of detail needed to complete a specification:

• They seldom have sufficient knowledge of the process objectives
• They fail to remember the exception processing which is a real killer
• They do not thoroughly understand the elements of risk mitigation in a project

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Most executives intuitively know that some (if not many) of their service processes are inefficient. Yet, service process improvements are a barely touched frontier in the relentless corporate drive to lower costs and improve quality. One reason for this is the lack of objective process controls such as those developed for manufacturing over the last 50 years.

This paper helps decision makers seeking a methodology best suited for service process improvement. It is a compendium of experience, personal notes and the readings of noted authors (described in the reference section). Inside you will find a description of Lean Six Sigma for Services, in general terms, along with a survey of the benefits, characteristics, approach, and tools.

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The Central Policy department at a major Pharmaceutical company was not meeting management expectations relative to service levels and quality of service. Policy development was taking too long. Analysis was substandard, and the end product was poorly written. Clients were generally unsatisfied with Central Policy services and frequently complained to management.

Jim Pickens was engaged as a business process consultant to perform a current state assessment, identify needed improvements, and quickly turn the situation around (90 days).

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