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10 steps to improve the quality and efficiency of your business

By Michael R. Clark    

Managers, supervisors—and small business owners— have always been concerned about containing costs, especially operating costs. The Great Recession, however, has created a mandate for lowering costs for businessesiStock_000005033727XSmall (especially small businesses, which have little margin for error) to survive.

How do you do this? The short answer: Orient and align people and systems to deliver a continuous stream of value to the customer, and eliminate waste and deficiencies in the process.

The short answer refers to set of principles and practices called lean manufacturing, which focuses on adding value to what the customer says is important about a product or service.

Every business owner can implement the principles of lean manufacturing—regardless of the type of business you have. And you don’t have to be an expert in lean theory and practice to make a significant impact on your business. However, you do need to be familiar with some helpful lean concepts—and be able to use some specific lean tools—to make a serious impact towards reducing costs.

Here are 10 things you can do to “lean up” your business and delight your customer:

1. Emphasize teamwork. The basic philosophy of lean is to delight customers by providing high quality products and services. To make this happen, encourage collaboration among your employees to look at your overall business processes and reduce errors/defects and decrease cycle time. Doing this should increase quality.

2. Define quality and value from your customer’s point of view. Understand who your customers are and what they value most (their requirements) in your product or service—price, fit, actual performance, appearance, safety, accuracy, completeness, and warranty.

3. Use minimum resources. Small businesses must use the least amount of material, time, space, facilities, capital, energy, effort, and/or whatever else is needed to develop and deliver a given product or service to a customer. Anything more than the absolute minimum is essentially waste. Consider these sources of waste:

• Using excessive raw materials;

• Spending too much time to develop, produce, and deliver;

• Making mistakes;

• Carrying too much inventory;

• Having too much physical space;

• Careless and excessive spending;

• Involving too many employees;

• Allowing people to work inefficiently.

4. Understand the relationship between quality, speed, and low cost. Customers want something with no errors, delivered quickly, and at a low cost.

5. Give ‘value-added.’ The term value-added means that every activity completed towards the delivery of a product or service directly meets a customer’s criteria for value. Value is the worth placed on something (such as goods, services, or both). Worth can be expressed as money, an exchange, a utility, or a standard. Customers always determine value, and each customer has his or her own perception or definition of value.

6. Understand the cost of quality. Quality is not free; it has costs—specifically costs for error prevention, error detection, and failure. It costs more to fix a process at the failure phase (end of the process) than at the prevention phase (start of the process). Focus your efforts to provide quality products and services at the beginning of processes rather than fixing that service after it has been delivered badly.

7. Solve problems systematically. Use a six-step problem solving process (see sidebar), which provides a structured approach for employee involvement towards the resolution of issues. Don’t fall into the common trap of “ready, fire, aim,” in which you choose the first solution that comes to mind—often without fully understanding (defining) the problem. Always consider alternative solutions.

8. Learn how to improve work processes. All work can be broken down into a number of processes. Take time to learn how to do a process analysis.

9. Find a practical starting point for improvement. A small business has many practical starting points for quality improvement. If analyzed and corrected, any of these can improve the quality of goods and services. Some of them are customer complaints, employee complaints, meetings, reports, policies, processes, and system craziness. Understand that a quality-improvement process begins with identifying an output and the customer for that output, and ends with evaluating the results and then starting over.

10. Focus on 5 S’s. These S’s are sort, straighten, scrub, systematize, and standardize. Doing these things will immediately improve the efficiency of an operation.

These 10 steps will lead you down a path to become much more efficient and should result in reducing your internal operating costs. The great part about this is that you don’t have to be an expert in Six Sigma or lean manufacturing to accomplish significant efficiencies in your operations.  

michael clark smallMichael Clark is a senior consultant/trainer for the Division of Continuing Education, University of North Florida, where he specializes in developing and conducting management/supervision training programs. He is also owner of MRC Consulting, which specializes in organizational and management/supervision development strategies. He can be contacted by e-mail at mrcconsulting@earthlink.net or by phone 904-620-4200, or 850-545-1451. He will be teaching a one-day program on increasing efficiency on Oct. 26 at UNF. Call 904-620-4200 for more information.

 

 Review strategies to improve productivity. Go to http://advantagebizmag.com/archives/3365.

 SIDEBAR

A six-step, problem-solving process

1. Define the problem. Write down the problem what you want to achieve by eliminating it.

2. Analyze the problem. The goal of analyzing the problem systematically is to identify the extent of the problem as well as its “killer” cause(s).

3.Generate possible solutions. Once you know the cause(s), brainstorm alternative solutions that potentially eliminate the causes.

4. Analyze the solutions. Write down the good points and bad points about each solution, including cost, risks and threats, and time required for implementation.

5. Selecting the best solution(s). Go back to the definition of the problem and what you want to achieve by eliminating it. Select a solution that meets this objective.

6. Implement the solution. Develop an action plan and stick to it. Monitor the results of solving the problem.

 

SIDEBAR

For more information

For more on improving efficiency within your organization, check out these resources, which were referenced for this article:

• Taking the Mystery Out of TQM, Peter Capezio and Debra Morehouse. Career Press, 1995.

• What Is Lean Six Sigma?, Mike George and Dave Rowlands. McGraw-Hill, 2004.

• Lean for Dummies, Natalie J. Sayer and Bruce Williams. Wiley Publishing, 2007.


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