Entrepreneurs are constantly searching for ways to improve efficiency in their day-to-day operations and ultimately increase profitability. Whether you're in manufacturing, tourism or a home office, you need a clear production plan with systematic processes that ensure your company runs smoothly and that ultimately you eliminate any waste. Ask yourself: am I working this way because I've never thought of changing it? Are there concrete changes I can make to simplify and improve how my business works?
To determine whether or not your processes are effective, you should first ensure that they add value for your client, which is the basic premise of lean manufacturing. In manufacturing, for example, employees lining up to use machinery is considered a wasteful process and can ultimately deter a company from delivering its product on time. By reviewing the plant layout or adding more efficient equipment, the production processes can be improved.
Things to consider
- Look at your current set-up by mapping out your processes. How are you running your operations and can you identify any waste? Look at the overall production process from the initial order to final delivery. This might resemble a flow chart, or a visual that helps you see the bigger picture.
- Determine your priorities. What is key to your business (faster turnover, getting new customers or developing new products or services)? What aspects need improvement: strategic, core or support processes? Depending on your focus and goals, you can determine what processes need to be improved first.
- Strategic processes establish the overall direction of your company, such as improving quality.
- Core processes have a direct impact on operational activity, such as lead time or improved plant layout.
- Support processes mainly contribute indirectly to achieve targets, such as reduction in paperwork.
- Establish targets for improvement over time. What is your timeframe? How are you going to achieve your production objectives?
Map out your existing processes
Look at your processes from the point of view of an investor; keep in mind the overall objective and vision of the business and ensure the processes meet those goals and add value for the client.
Draw an accurate map of each process in your material and information flow. This is also known as a value stream map, swim lane or flow charting. By doing this, you can improve interconnections and better understand the linkages between various elements of your production. As well, you will be better equipped to identify and eliminate waste throughout your company.
Think of it as visualizing improvements to the entire flow from raw material to finished product, instead of spot improvements to single processes. By looking at the entire stream of processes, you can avoid cherry-picking improvements which only bring limited benefits.
Walk yourself through each of the processes and look at exactly what happens in your business from A to Z. BDC Consulting can help you look for waste and hidden activities. Mapping will encourage you to measure processing time, and enable you to see how much of that time is waste and how much is adding value. Here are just a few examples:
- Eliminate processes that involve adjustments
- Keep travel distance minimal within your space
- Dedicate a single production line or cell for each batch of products; it's faster to diagnose problems such as bottlenecks and handle changeovers
Improve productivity – get rid of waste
Overproduction is producing more or sooner than your client needs, resulting in obsolescence and handling damage. Overproduction drains working capital and means more costs for storage.
Delays include people waiting for machinery, tooling, raw materials.
Unnecessary transportation is moving materials over long distances in your plant and adds no value to your product or service. An example would be a plant layout that requires employees to move around frequently and resulting in time loss.
Too much inventory creates extra paperwork, requires more space and strains cash flow.
Defective products need to be reworked or scrapped, resulting in dissatisfied customers and profit loss.
Defective design that is not inline with customer requirements results in more returns and loss of customer loyalty. Make sure you keep costs of product design as low as possible; product design often has hidden and wasteful costs.
Complicated processes such as poor sales practices and administrative red tape slow down production. For example, an office hiring a receptionist when clients would prefer to leave detailed messages in a voice mail box.
Outdated equipment can cause bottlenecks and increase production time.
Poorly trained employees have a direct impact on production. If there are training gaps, take the steps to help employees improve their skills.
Map out your new processes
Once you've got your current processes on paper, map out alternative routes and ideally how you would like your business to be in the future. Get your employees involved to make recommendations for each step in your production process. After all, they can provide invaluable hands-on expertise. Make sure your vision is clear and that you share common objectives and goals with your employees. Encourage an environment where employees are cost-minded and always looking for ways to improve operations.
Get your clients involved
Another helpful point is to get your clients involved in setting up your processes. For example, if you're developing products, one of the most commonly used vehicles is a round-table discussion or focus group. In this approach, the business gathers a number of clients or potential clients in a room to discuss exactly what the product or service might be and the problems the group could solve. Since the client is immersed in the development of the product, he or she can easily identify specifications that don't add value.
