Brampto - "We don't have time to review, revise and enhance our procedures, we are too busy trying to get new clients and keep our cash flow steady. "Have you made this comment lately? Perhaps you used different words with the same intent. You are definitely not alone; perspective is repeated thousands of times by companies all across Canada every month.
However, the perspective is based on a myth. The myth:You do not gain revenue or improve cash flow through improvement of your internal processes
. Nothing could be further from the truth.
Process improvement, I.e. CHANGE, is and can be a true Win-Win situation for the company bottom line, for employee morale, for clients.
To illustrate; consider the following:
Acme Stuff Inc. makes products that have been sold to customers for 20 years. Essentially the same "stuff" they made in 1990 with a few enhancements. They have gone green in their purchase of raw material. They now use environmentally friendly packaging. They have a new stylized logo but essentially the same product.
Acme is losing money. The cost of raw material is up; salaries are up. Customer demand is down; and their product price has increased steadily over the last 20 years.
Acme decided to take a bold step and look at the processes in every aspect of their organization. First, they realized the production line could be streamlined because the product looped back several times, adding time/cost. A realigned production process reduced costs significantly due to the reduced labour cost and reduced time inventory sat in the "in process" stage.
A look at the sales documenting and reporting and verified they merely automated the previous manual process. Bottlenecks were caused because long time employees making up the sales staff were not computer literate. Wrong data was being entered into the "box" or was entered in an unacceptable format for the program to accept. This delayed sales submission and product delivery, created unsatisfied clients. Reworking the process to make it intuitive eliminated the bottleneck and reduced time to receipt of product from order by 25%.
Having achieved these two basic improvements and resultant cost reduction for their product, Acme was able to decrease the sales price by 12% (keeping 13% for themselves). The impact; increased sales volume creating positive cash flow. Salary costs decreased due to less overtime required. Client satisfaction increased and word of mouth advertising started bringing in new accounts.
Clearly; making a few adjustments in the process; while costing a bit of time, money and energy up front has resulted in a positive impact on the business measures that matter.
Think about it.Is there a process you could improve then could pass along the benefits to your clients and perhaps gain just as Acme did?
Copyright 2010 Gordon J. H. Newman, CPT