Continuous Improvement works through both People and Processes

About 50 years ago, in the industrial or business world, you brought in the “expert” to work out the best way of working to minimize time and effort. In a typical large size factory, it was the industrial engineer; often in smaller set-ups, it was the owner themselves. Others followed the established method and just did the repetitive task set for them. Once the process was set, it was known as standard method.

Modern work places have come a long way from this, as this “expert”-oriented approach of setting up an efficient process has not proven to be very effective in the long run. One has to spend a lot of energy in buy-in of the process by actual doer, and at times an unintentional or skewed approach by the expert results in built-in waste, which could hang in there for years to come because “that’s the way it’s done”.

Peter Wickens, former HR Director of Nissan UK, expressed that in a modern competitive environment there should concern for both people and processes. Without concern for the people, you have an ‘alienated organization’; without concern for the processes you have ‘anarchy’.

In learning about an organization, knowledge harvesting is the key. Training, such as Lean thinking, underpins knowledge harvesting. One important aspect of an effective organization is that people must ‘own’ the working method.  In too many work places, I find the method was set-up a while ago and current staff does not own the method – “that’s the way it’s always been done”. Staff are doing tasks in a process without any ability to influence changes to improve – often they think about what they could do better, but since they do not have a platform to express these thoughts, they start to suppress their thinking and want to just go with the flow.

Supervisors have the responsibility of maintaining and improving work standards – in both service and manufacturing environments – provide such a platform where process are reviewed and staff creativity is tapped. However supervisors need to given such a skill, and tools to achieve a change in culture, as this does not come naturally.

A straightforward bottom-up approach makes the way for continuous improvement, as the team moves to the ‘new standard’ on a periodic basis. Process changes and reviews must be guided by defining mission critical steps and philosophy – once this is done, you can often leave the rest to the team, as their involvement will lead to them owning the process. One approach is to document their new experiences, in other words write down the new standards, and the buy-in to establish the new process builds itself.

Questions? Comments? Positive experiences? Share your thoughts below.

KPI Number One: Lead Time (LT)

Ten years ago, while working for a multinational, we had to do extensive regular reports to demonstrate the health of our business. We often got lost in the maze of KPIs. During a lunch break of one of such monthly review session, my MD turned to me and asked me, “If you were running this business, what will be your number one focus?”

My answer was Lead Time, without any hesitation. He took it in without saying much to me; his expression indicated to me he was mulling it over. In the following weeks and months, I could see that penny had dropped. The changes were on the way.

Lead time, when looking from customer perspective, includes all activities – time to respond to a quote request, order entry, processing a purchase requisition, receiving a product into stock, and of course producing. If you wish to improve lead time to the customer, the lead time of all individual connecting stages, not just the largest, must be monitored and continuously improved. That is what the MD had introduced to the front end of the business first, and then to all support processes.

Habitual batching in the name of efficiency of transactional processes is often the hidden killer. Visual tools are of help here. Lower LT helps to achieve high inventory turns, improved cash flow and higher productivity. Lower LT than your competitor, means repeat orders, as it positively impacts the planning stress of your customer.