First Step in Improving a Process
I recently got a client for an operational improvement project who came to me and said,
“Something either has to change or we’re shutting down the operation”
Now when things get to the point that someone is ready to throw in the towel on a physical production outfit things are bad.
The first thing I was impressed with is that this business owner recognized that he had an operational problem.
The second thing is that he is willing to pay someone to fix it.
So in walks in the Operational Expert.
But like everything your client wants to know what is the first thing you do in fixing this problem.
It’s amazing how after doing this for other companies when you have your own client you’re a little stumped.
It’s not like you don’t know.
It’s just that you do it naturally.
It’s just like solving a problem really.
With every process – that include making a cake to running a manufacturing facility –
You must have a baseline.
What’s your starting point.
To the client they are only telling you everything is a MESS
How do you quantify “a Mess”
As an engineer I hate when someone comes and tells me that service is really bad everywhere, or we have ALOT of dropped calls,
or we have TONS of rework!
Here’s what I need from you if you want me to help you.
I need to know how many widgets you make a day.
Then I need to know how many of those widgets need to be redone.
That’s my baseline.
So if your network has 1,000,000 calls an hour and you have 3 dropped calls in that hour – then your definition of ALOT is drastically OFF!
So it’s not rocket science!
To start to improve on something you need to know where you’re at!
And you need to be able to quantify it.
This client came with an operations problem.
But he was saying his company isn’t liquid.
So maybe he’s trying to solve the problem before properly identifying it.
Yes it is true, everything that we DO in our business affects our financials but you need to decide what the problem is.
So then he says, “It’s the liquidity” “We have to borrow money to stay a float”
Well I’m not an accountant but sounds like a CASH FLOW problem.
So here’s our first step – we look at the past five years of their financials and we start to pull out some ratios ……..
……. in order to get a baseline!
You have to know where you’ve been to know where you’re going!
So just to recap – What’s the first step to process improvement?
BASE-LINING
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