It is obvious that in today’s marketplace, every organization must become more efficient. In a Lean and Six Sigma world this means eliminating waste, which will assume one of these forms:
Overproduction and Inventory: Both old and new organizations easily fall into the trap of overproduction, some producing goods before there are buyers while others are producing more goods than there is demand for. Both situations are bad for the organization, especially from an internal perspective. From a customer perspective, overproduction might lead to shorter delivery times and lowered market price. The customer-oriented perspective might indicate that customers get the products in the time and that the price is balanced with the value it delivers to customers. Overproduction is something to be avoided, but at the same we need to make sure that we have right amount of goods in inventory to be delivered within the timeframe that customers expect to receive them.
Are you measuring the expected and realized delivery times to your customers and the deviation between them?
Waiting: As we all know, waiting for something or someone in a process is costly. While waiting, people may not have anything to do and partly manufactured goods need to be stored somewhere. It also wastes time for employees to switch from one process instance to another. From the customer’s perspective it is undervaluing customer’s time, since the organization is not able to design their processes and inventories in such a way that there is no useless waiting times delaying the process. In some cases, business rules can cause situations where there is useless waiting.
Have you evaluated all your business rules to check if they are still valid?
Processing: This is one of the most customer facing phases in manufacturing, even though many organizations do not seem to think so. This is where time is taken, quality is put into products, customer value is created and pretty much all the work in an organization is done. It is not enough to measure all the bits and parts of the process from an internal perspective, but we need to also evaluate the processes from a customer-oriented perspective. That means seeking the answers to questions such as: “Is this something customers really need?” or “Does this process contribute to successful customer outcomes?”. With the customer-oriented perspective it is possible to extend traditional Lean and Six Sigma thinking to question the overall reasons for certain processes to exist in an organization. That will lead to increased revenue, lowered costs and improved customer service simultaneously. From a mere internal perspective, that is hard to come by.
Correction: When everything goes right everyone is happy, but usually that is not the time an organization is really evaluated. The true measure is taken in those moments, when something fails. And as we know, correcting costs a lot. Thus, organizations should thrive for making as little mistakes as possible. But since perfection is hard to achieve, organizations should prepare for proper correction. From a customer-oriented perspective, always seek the cause, not the effect of an error. And make sure that it is you who notices the error (first), not the customer. It sounds very obvious, so you probably must have clear measures and plans for reacting to reclamations and other customer feedback?
Are you measuring those with the same enthusiasm as manufacturing mistakes detected internally? And foremost, have you linked that information all together?
If you have inefficiencies in your processes, you might be making more goods than you need, having people waiting for turns in the process or you are not fixing mistakes efficiently. In many cases, you may be doing all the previously mentioned things right, but you are missing the customer perspective from your process optimization efforts; and that will prevent you from creating even better business.
Here are some tips for reducing waste in your processes:
Sifting – The internal (Six Sigma/Lean) perspective recommends removing things from the work area that are not required to do the job. The customer-oriented perspective adds to get rid of all the work that does not directly contribute to producing successful customer outcomes.
Sorting – Organize tools and materials. Also evaluate how those that are left contribute to creating value for customers.
Standardizing – Eliminate random elements that slow down production. But, at the same time create an environment that enables people to present their ideas on how to improve processes. Standardize your processes for manufacturing successful customer outcomes (products are just a medium for that). And while doing that, keep in mind where the process starts and ends for your customers, not just for your organization.
Self-discipline – Insist on consistent performance. Make the customer everyone’s business in your organization.
Summarized: first evaluate what your customers really need from your organization, and then plan to improve a process and do it. Check to see if it worked with both internal and customer-oriented measures. Then, based on the results, act to improve the process further. And do not do this all only from an internal perspective. Have the best experts to evaluate what you are doing: Your Customers.