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Answer Upon - 5 Steps to Continuous Process Improvement
For a World Franchise System of government to work we must insure that everyone gets what they want. In this franchise system we must recognize that everyone must get what they want or they will manipulate the system and take it anyway, thus destroying the advantage of the system, as it unites all world governments. That includes those living in the system, financing it, running it. It is human nature and we should never deny it or turn our backs on the innate characteristics of mankind.Now then getting to those who can produce change to help run the World Franchise System; Machiavellian psychology predicts that he who rises from the people is loved and respected. It is he who must be allowed to rise and lead
But then complaints start rolling in from the field. Products are breaking down faster. Technical support costs rise, and customers start reducing their orders. Not only do profits evaporate, but customer goodwill does too. To offset this, your first reaction might be to switch back to the old supplier. This is much easier and it
You have probably read the books but somehow you are no further forward in search for a career that makes you happy. Perhaps it is now time to find a specialist career coach to help you. Research shows that people who are most satisfied and motivated in their careers are people who have a career that reflects their values, interests, skills, and abilities, plus what they want out of life, their ideal working environment.If you are not happy in your work, a career coach may be able to help you, to uncover the right career for you. There are many people offering career coaching, counselling and advice. Life coaches may be good in supporting you to achieve goals and step t
What if your sales increased from $100,000 to $110,000 per day and your profit increased from $10,000 to $11,000 – did you improve by 10%? The answer might shock you...
Because the answer is no. No improvement occurred. In fact, your process deteriorated. Sure, revenue increased, but is this really an improvement? Let’s take a look at the problem by looking at revenue and expenses.
Extra Expenses Prevent Process Improvement
Let’s examine the before and the after scenario. Say, in the before picture, you have sales of $100,000, fixed costs of $20,000 and variable costs of $70,000. Total expenses amount to $90,000, giving you a gross profit of $10,000. In the after picture, sales increase to $110,000, while variable costs rise to $77,000 in addition to $2,000 in Extra Expenses – which give you total expenses of $99,000 and a gross profit of $11,000. In the after picture, remember though, fixed costs are fixed, and do not change with additional revenue. So you should get more than 10% (11.8% to be exact) profit from 10% growth.
But in order to maintain a 10% profit we have to spend $2,000 in Extra Expenses. These Extra Expenses represent your process inefficiencies. These expenses could be sales discounts, travel, overtime, or something else. The names don't really matter. What does matter is that we are not improving.
Process Evolution Enables Improvement
Improvement results from process evolution, not from an increase in scale. What’s the difference? Scale increases when we hire another person, increase expenses, or purchase more assets in order to acquire or service more business. Process evolution occurs when we change the process and as a result can release hidden capacity and service more business without adding any costs - and this is a form of efficiency. You can measure efficiency with the formula:
Efficiency = Output / Costs
But process evolution is about more than just changing costs. It is about changing time, increasing process velocity, and getting more output from the costs you already have. Cutting costs, by itself, does not evolve a process. In fact, reducing costs, without properly understanding how those costs relate to the process, can actually decrease process evolution (devolution). Let's review an example…
A Cost Reduction and Procedures Training Case Study
A company decreases costs by switching suppliers and using cheaper materials for their manufacturing process. Now the purchasing department is happy they are saving money. The bottom line is starting to look better as profits initially increase. And so this improved the process, right? Well...
But then complaints start rolling in from the field. Products are breaking down faster. Technical support costs rise, and customers start reducing their orders. Not only do profits evaporate, but customer goodwill does too. To offset this, your first reaction might be to switch back to the old supplier. This is much easier and it f
It is a sad statistic, but most companies lose track of between 40 and 80 percent of their leads at some point in the sales cycle. This fact shows that many companies face a wide variety of challenges in lead tracking. Finding a lead is viewed by some as the more difficult task, but in reality, most companies have more difficulty keeping and acting upon the lead.To begin with, lead capture is essential to lead tracking. There are specific business rules that should be followed when capturing a lead, and if those rules are not defined well in the beginning, it will be harder to hold onto the lead. If a business starts a relationship of with a consumer on a bad note, then that business is less likely to keep th
But in order to maintain a 10% profit we have to spend $2,000 in Extra Expenses. These Extra Expenses represent your process inefficiencies. These expenses could be sales discounts, travel, overtime, or something else. The names don't really matter. What does matter is that we are not improving.
Process Evolution Enables Improvement
Improvement results from process evolution, not from an increase in scale. What’s the difference? Scale increases when we hire another person, increase expenses, or purchase more assets in order to acquire or service more business. Process evolution occurs when we change the process and as a result can release hidden capacity and service more business without adding any costs - and this is a form of efficiency. You can measure efficiency with the formula:
Efficiency = Output / Costs
But process evolution is about more than just changing costs. It is about changing time, increasing process velocity, and getting more output from the costs you already have. Cutting costs, by itself, does not evolve a process. In fact, reducing costs, without properly understanding how those costs relate to the process, can actually decrease process evolution (devolution). Let's review an example…
A Cost Reduction and Procedures Training Case Study
A company decreases costs by switching suppliers and using cheaper materials for their manufacturing process. Now the purchasing department is happy they are saving money. The bottom line is starting to look better as profits initially increase. And so this improved the process, right? Well...
But then complaints start rolling in from the field. Products are breaking down faster. Technical support costs rise, and customers start reducing their orders. Not only do profits evaporate, but customer goodwill does too. To offset this, your first reaction might be to switch back to the old supplier. This is much easier and it
After the holidays, cables and wires are often a site for sore eyes amidst the influx of new high-tech toys, gadgets, and accessories. Thankfully, homeowners can utilize a few quick steps to restore function and design to their living rooms and home offices. Supplies: Cable Ties(also known as Wire Ties) Cable Tie Installation Tool Electrical Tape or Heat Shrink Tubing Adhesive Back Mounting Bases Surge Protector Step-by-Step Instructions: Start by unplugging and detangling all of the cables and cords. Apply electrical tape or heat shrink tubing to any frayed cords and pull the cables together to a single meeting point. Use the cab
Process Evolution Enables Improvement
Improvement results from process evolution, not from an increase in scale. What’s the difference? Scale increases when we hire another person, increase expenses, or purchase more assets in order to acquire or service more business. Process evolution occurs when we change the process and as a result can release hidden capacity and service more business without adding any costs - and this is a form of efficiency. You can measure efficiency with the formula:
Efficiency = Output / Costs
But process evolution is about more than just changing costs. It is about changing time, increasing process velocity, and getting more output from the costs you already have. Cutting costs, by itself, does not evolve a process. In fact, reducing costs, without properly understanding how those costs relate to the process, can actually decrease process evolution (devolution). Let's review an example…
A Cost Reduction and Procedures Training Case Study
A company decreases costs by switching suppliers and using cheaper materials for their manufacturing process. Now the purchasing department is happy they are saving money. The bottom line is starting to look better as profits initially increase. And so this improved the process, right? Well...
But then complaints start rolling in from the field. Products are breaking down faster. Technical support costs rise, and customers start reducing their orders. Not only do profits evaporate, but customer goodwill does too. To offset this, your first reaction might be to switch back to the old supplier. This is much easier and it
American employers have generally been required to carry Workers Compensation Insurance, or provide a suitable alternative coverage for their employees, since the early 1900s. The early benefit employers received from participating in Workers Compensation plans -- a reduction in litigation -- is no longer self-evident. In fact, new causes for litigation addressing job-related illness and injury have risen over the decades.Workers Compensation typically covers three expenses: medical treatment for job-related injuries (they may not have to occur on the job, but each state's laws govern specific criteria) or illnesses, providing for the support of disabled workers, and (in some cases) providing for rehabilita
Efficiency = Output / Costs
But process evolution is about more than just changing costs. It is about changing time, increasing process velocity, and getting more output from the costs you already have. Cutting costs, by itself, does not evolve a process. In fact, reducing costs, without properly understanding how those costs relate to the process, can actually decrease process evolution (devolution). Let's review an example…
A Cost Reduction and Procedures Training Case Study
A company decreases costs by switching suppliers and using cheaper materials for their manufacturing process. Now the purchasing department is happy they are saving money. The bottom line is starting to look better as profits initially increase. And so this improved the process, right? Well...
But then complaints start rolling in from the field. Products are breaking down faster. Technical support costs rise, and customers start reducing their orders. Not only do profits evaporate, but customer goodwill does too. To offset this, your first reaction might be to switch back to the old supplier. This is much easier and it
A Fortune 100 director willingly passes confidential board room chatter to the press; a CEO slips into using any means available to plug the leak; private eyes are seduced from keyhole peeking into alleged criminal impersonations hoping to impress a big client, and a phone company clerk is flustered or pressured into releasing confidential call records.What were they thinking?The actors in the unfortunate events at Hewlett-Packard most likely weren't thinking at all, and in fact may have been acting under the direction of their hard-wired personality preferences - traits which, in the absence of discipline or policy redirection, and in the presence of a personality-driven and divisive environment, hija
But then complaints start rolling in from the field. Products are breaking down faster. Technical support costs rise, and customers start reducing their orders. Not only do profits evaporate, but customer goodwill does too. To offset this, your first reaction might be to switch back to the old supplier. This is much easier and it fixes the immediate problem, but it won't recapture the lost sales, customers and damage to the company’s reputation.
But, again, you need to focus on the most important issue. There is a limit to the amount of costs one can reduce in any process – zero. You can’t reduce costs below zero. On the other hand, there is no limit to the process potential we can achieve. Process evolution concerns the numerator (the output), not the denominator (the costs) in the efficiency equation above.
Change in Process Evolution = New Output / Old Output (Assuming costs are held constant)
By focusing on process evolution instead of costs we can continue to increase our output forever. We just have to make sure that the output increases faster than the costs. Then what we have is incremental improvement. But what procedures can you use to achieve this?
Process Training
It’s all about collecting feedback to set the right priorities for your change process. You need feedback to drive the change process. The more feedback you get the better you will be able to evolve your process. So let’s take a look at what your change process needs to include.
1. Feedback Records with Deficiency Notations
2. Trend Analysis
3. Corrective Action Process and Criteria for action
4. Audit Process
5. Management Review Process
And then ask yourself the following questions about your change process:
• Are process feedback records created?
• Have the feedback records been analyzed for process deficiencies?
• Are the deficiencies analyzed for statistical significance?
• Are the deficiencies of statistical significance written up for corrective action?
• Is corrective/preventive action implemented?
• Is there an objective review of all processes to ensure the change process is working?
• Does management review all findings to ensure the change process is working -- and that processes are evolving to meet or exceed organizational requirements?
Next week: Business Modeling
With these thoughts in mind, you can see how important it is to first define continuous improvement and note how it can actually affect your business.
But you can't gather feedback from all processes at once. If you did, that would generate a process overload. So where do you start?
Next time we will show you show how when we discuss business modeling. Business modeling prio
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