How to streamline a process within the construction sector with recurring deviations in profitability by using process mapping
We can clearly see differences regarding the digitalization journey amongst the industries we´re involved in. The construction industry is one of those that still have a long way to go. In this project, we were involved to help one of our largest customers, who is providing services in construction and project development, to streamline the furnishing and optional apartment products process. Previously, every new project had to choose their own products to offer the customers, choose their own suppliers and negotiate prices themselves. These factors led to large deviations in profitability between every project. There were also problems with a lot of manual steps throughout the whole process. The main mission was therefore to streamline the process in order to increase efficiency and reduce costs related to procurement and pricing of the furnishing and optional apartment products (such as an upgrade of the standard dish washer to a more advanced one for example).
Breaking down the process to identify improvement areas
We started by mapping out the AS-IS process to get a holistic perspective of the activities included, the roles involved/responsible for the activities, the systems/applications used in the process etc. We then mapped the desired way of working (TO-BE) to get an understanding of the flaws in the process, to be able to analyze the GAP:s between AS-IS and TO-BE as well as to figure out how to deal with the flaws and GAP:s. We quickly realized every region had very different ways of working which created a challenge during the process mapping to get an agreement of the general visualization of both the AS-IS and TO-BE processes between the regional representatives involved in the project. We had representatives from all regions during the process mapping workshops and, in some cases, it took several occasions of face-to-face discussions until we could finally reach an agreement in the general view of the processes.
The actions that led to extensive efficiency improvements
After analyzing the process maps and the GAP:s identified by comparing them, we understood that one of the main problems was the decentralization of decisions regarding suppliers, optional apartment products and pricing. On top of this, most of the work regarding this were managed in different kinds of excel lists which always comes with a high level of risk of making mistakes/misses. We realized the main focus was to centralize these kinds of factors to be able to create a more efficient process with less manual activities. The logical next step was to frame the optional apartment product offering and pricing of the products included in the offering into data registers, which we fully anchored with the executive management of the corporation to ensure support and a common view from the higher levels. Other data registers related to the product offering were then added such as suppliers, environmental data etc. to eliminate even more manual work and every register were assigned an owner who´s responsible for the data in the register.
To make the centralized registers useable and accessible for all the projects we started developing a new digital solution in which we could gather all the newly centralized data in one common interface. We then created functions for the projects in early phases to be able to set up the projects step by step based on a set of rules of what products that can be offered to the customers in what situations. There were a lot of wishes and opinions for us to add different kinds of functions, but we limited these to only focus on the defined project scope. On the other hand, we documented every new idea, wish and opinion and kept this in a backlog
The effects of the improvements
At first, we saw some resistance to the redesigned process, as we expected from the beginning. We know by experience that large changes to a process often lead to some level of resistance amongst some of the people affected by the changes. Humans likes to do things as they have always done them, when this changes it often automatically leads to some level of resistance even if there is very obvious that the changes are improving the way of working. We also see difficulties with resistance when the peoples affected by a change has a perceived reduce of control. This was a factor in this case as well since they were no longer able to choose their own product offering, what suppliers to use and neither negotiate their own prices. Instead, they had to stick to the new frame with the centrally anchored registers.
Either way, we could immediately see extensive time saving after comparing the time consumed when performing different process activities in the previous way of working with the new way of working. The time spent on choosing the optional apartment product offering, the time spent on choosing suppliers, the time spent on negotiating prices and the time spent handling the environmental data connected to the products was now fully eliminated from a project point of view which were all very time-consuming activities. Also, since the platform used in our developed application is built on the same platform as systems used in other areas in the organization, this will enable simple integration which will create even more time-efficient processes overall as well as increase the quality additionally.