Follow the Money: Operational Excellence for Today’s World
In today’s “new normal” economy, companies are looking in every direction to maintain profitability and grow their business. It has become imperative to look beyond the top line and focus just as intently on decreasing operating expenses to run leaner and more profitably.
Today, your competitors are stressed, margins are strained, and customers have more options than ever. And therein lies the opportunity! If you instill a culture of operational excellence, this will allow you to make money in lean times and outlast your competition while delighting your customers. So what exactly does operational excellence mean? Stated simply, it means having a disciplined program of customer-focused waste elimination.
Focusing on operational excellence and waste elimination is not a new strategy. Companies like Toyota have been employing these principles for over 50 years. Toyota defines waste as, “Anything other than the minimum amount of equipment, materials, parts, space and workers’ time which are absolutely essential to add value to the product.”
I often tell business owners that the hardest part of the journey is learning to see—to see waste, that is. We live with it every day, and grow to accept it as just part of the cost of doing business. Or even worse, we don’t see it and operate unaware of the potential all around us. As you look at your business, there are seven types deadly of waste to focus on.
1. Wait Time: The idle time while no value-added activity takes place. Are your employees spending time waiting for parts, instructions or software updates? How long does it take to get your crews rolling in the morning? Do you know your crews’ average job start time? A simple process of daily observations and data logging should reveal significant room for improvement.
2. Transportation: Wasted effort to transport people and materials between processes, into or out of storage, or to the job site. For example, think about the multiple trips it takes to and from the site to pick up forgotten materials.
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