Your business is made up of numerous processes – sequences of tasks, activities and transfers of information involved in the delivery of services. If all your processes are effective, every part of your organisation will be operating on time, to budget and in line with expectations.
Broken or inefficient processes take up unnecessary time and effort, often leading managers to work reactively rather than proactively. A broken process in one part of the business can have a knock-on effect on all parts of the business, damaging productivity and profitability. Inefficiencies will manifest themselves in different ways. Some problems will be obvious, some will be reoccurring, and others will take longer to come to light.
If you’re noticing any of the following issues, it’s likely you are experiencing a process problem:
• Constant firefighting and fault rectification
• Audit failures
• High levels of waste in the organisation
• Complaints and errors
• Inconsistency in how things are done
If you are worried about ineffective processes or are looking for areas of improvement, here are five key areas you should review.
If your profit and loss report reads like a mystery novel each month – full of unexplained losses and inconsistencies – then you probably have some problems with your processes.
Go through your financial reports in detail and look for high levels of unexpected costs and consistent overspending. Is reactive maintenance causing unsustainable levels of unplanned expenditure? Do you have an unexplained level of waste? Are overtime costs out of control?
Understanding where the losses are and what is causing them will help you identify which processes need attention.
What is your overall equipment effectiveness (OEE)? OEE is often the best metric for identifying losses and finding areas for improvement.
By reviewing your OEE, you’ll be able to see if the biggest problems are caused by quality, performance speeds or periods of interruption. You can then drill down into the underlying causes of these problems and develop better processes for managing them.
How accurate is your demand versus actual forecasting? Inaccurate demand forecasting can lead to issues with lead times, profit margins, wastage, stock levels and delivery schedules.
Poor forecast accuracy is often caused by inefficient data. Look at what information is being collected in your organisation, how it is being collected, how it is being communicated, and how it is being utilised.
Planning & scheduling
If you don’t have robust resource planning and scheduling processes, then you’ll have problems throughout your organisation.
Poor planning can be a result of bad time management, lack of master data, inefficient planners or no clarity over whose responsibility it is to oversee it. Review your planning and scheduling tools and processes – are they effective?
How much data are you using to drive your decisions? Many manufacturing organisations do not have the right processes in place to collect and analyse data.
Data collection systems on the factory floor must be practical, the data collected must be accessible, and the right data must be used to make decisions. If you are to forecast accurately and plan effectively, you must have effective data collection systems and processes.
Fixing your process inefficiencies
Once you’ve investigated the five areas outlined above, you’ll be able to see more clearly where your inefficiencies are. Having robust processes in all areas of your organisation will enable you to operate more effectively.
Of course, your processes will only be effective if you give your people the skills and competencies to implement them. Your people development and process development must be aligned if you want success.
At Chasm, we believe that the only way to drive operational change is to change behaviour, so we work on both your people and processes simultaneously.
If you are struggling to find the inefficiencies in your business, or you know where the problems are but not how to fix them, we can help. Our services are tailored to the needs of your business, our solutions are practical and sustainable, and we deliver an average ROI of 3:1.