Business Efficiency: How to Improve it for the Long-Term
Do you see wasteful operations in your business? Are you trying to figure out how to improve efficiency but just not sure how to approach the problem? Determining how to tackle inefficiency in your operations can feel insurmountable. However, there is a proven system that can begin your journey of eliminating waste within your organization. The Lean Management System is a three-phased approach to identify the root causes of inefficacy and set your business up for success through better efficiency, empowerment, and profitability.
Phase 1: Perform a Needs Analysis
One of the most critical elements of any initiative is to perform a Needs Analysis within your organization or identified business unit. A Needs Analysis is an exercise to understand the current state of the business by determining the exact needs of the business and where the pinch points and wasteful operations exist. This first phase cannot be skipped to improve efficiency in your business.
- Resource Planning
- Budget Allocation
- Learning and Development
It is imperative to include resource planning in this first phase. Resource planning is necessary to fully understand what resources, both internally and externally, you will need to successfully execute the tasks to improve efficiencies.
Estimated budget allocation is an exercise to ensure proper funding is available for implementing the adjustments to the business. An identified budget will allow the teams to track expenditures and stay on budget.
Learning and Development is a key component of any Lean Management System. This leadership role is critical to business sustainability and continuous improvement. The effectiveness of all efforts in this process is contingent upon the involvement of the Learning and Development teams from the onset of the initiative. This will ensure the initiative will be documented and repeatable for future team members to understand the improvement opportunities.
Phase 2: Build a Lean Management Infrastructure
To build a Lean Management Infrastructure within your organization to improve efficiency there must be a “vehicle” to allow for the following:
- Assure the flow of product or information is simple and predictable
This is important because often the flow of product or information is unpredictable. This is due to the lack of clearly identified and ingrained processes within an organization. It is critical that processes are developed, documented and adhered to by all levels of the organization. This baseline measurement will allow for an atmosphere of continuous improvement and the ability to change quickly, if necessary, to meet the demands of the business.
Many organizations are moving away from process controlled environments but are quickly realizing that without a baseline measurement, there is a lack of understanding of past processes. This can ultimately lead to wasted time, resources and the inability to quickly adapt to disruption in the industry.
- Define internal customer connections at a defined and paced flow
Internal customers are often referred to as internal value streams because the work of these individuals should, by definition, add value to the process of making the product or providing a service.
It is important to understand the value stream and how value streams are connected within an organization when trying to satisfy the internal needs of any organization. All too often, the “customer” is seen as someone outside the organization. In fact, the internal customer, from value stream to value stream, is not being satisfied by agreed-upon requirements and needs. Schedule slips, cost overruns, and unmet external customer demands are casualties of not clearly defining the internal customer path and associated requirements and needs.
Once the value streams are clearly defined a paced flow of product or information can be achieved.
- Define and standardize the work of individuals
Employee engagement at every level of the organization is necessary to define and standardize the work of each team member. It is critical to developing internal procedures and value stream maps to standardize each contributor’s work. Process control, with the use of visualization, automation, tooling, technology, and overall system interfaces are some advantages that organizations with Lean Management Systems leverage to maintain a competitive edge.
- Continuously improve existing and future business processes
Creating an atmosphere of continuous improvement starts with an engagement at every level of an organization; especially the leadership teams.
Many companies talk about being an organization that continuously improves. For some, unfortunately, it is just talk. The only way to develop and cultivate an atmosphere of continuous improvement is through the development and engagement of people. Leaders must lead. And the organization must develop its people up and down the organizational chart. Leadership is stewardship and we are all accountable to each other and the success of the organization.
Phase 3: Pilot Deployment and Model Scaling
An easy way to fail is to deploy technology, concept or methodology without launching a successful pilot exercise. The premature deployment will result in frustration at all levels of the organization. Patience is necessary, but a systematic Project Management approach is critical to the success of implementing a Lean Management System. It’s a best practice to pilot launch in an area of business that is not the most critical to the business. This effort will enable the teams to run a successful pilot launch of the full Lean Management System.
One of the best ways to begin building a Lean Management System infrastructure is to create a dynamic communications structure positioning the Daily Stand-up as its anchor. These 3 Daily Stand-Up Tips will get you started on the fundamentals to increase awareness and synergy around initiatives, and the progress of improvement opportunities.
It is possible to improve efficiencies in your organization. If your business is interesting in learning more about how to build a Lean Management infrastructure, contact RTG Solutions Group today for a free phone consultation.