Incorporating Kaizen into Key Areas of your Business

March 20, 2013 by 1 Comment

In case you are unfamiliar with the term, Kaizen is a Japanese word that refers to improvement or change for the better. The word has been adapted throughout the business world to encompass the concepts of continuous improvement, flexibility and willingness to innovate in order to improve processes and standards.

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Although these concepts are natural considerations within almost all industries, something about labeling them as Kaizen has made them readily understandable even in businesses that are less-focused on continuous improvement.

The idea of constantly re-thinking processes in order to make positive changes often goes against the fundamental core of traditional business models in which finding ways of doing things and sticking with them is the norm.

But, as global competition increases and the workforce changes, many professionals are recognizing the need for innovation and change in all areas of their organizations. The following are just a few ways for smaller businesses and new entrepreneurs to begin to apply the concept to their own ventures.

Staffing and Human Resources

What better way to apply the concept of continuous improvement than by providing continuous education for your staff? Keep your people up to date with the latest information and knowledge to ensure you’re always on top of your game.

Standardize

The concept can also be applied to your staffing strategies. Continually evaluate your team’s skills and strengths to determine whether you need to change assigned duties, promote certain people and of course find replacements for positions if necessary.

Modifying Expenses

In any business, budget is an essential consideration, but this is especially true for those who are either struggling or just starting out. Absolutely all expenses can be evaluated and modified, so don’t write off certain costs as being unchangeable.

Your elegant rental space, for example, may be interchanged for a less expensive option in a slightly less desirable neighbourhood. Or, you may be able to change your providers of office supplies for better prices. Negotiations with utility companies for better phone and internet packages and finding cheaper products to make your finished merchandise are other ways to save.

Changing Processes

Finding better ways of doing things often involves following advice. Perhaps one of the most important first steps of the concept of Kaizen is being open to change and not being too arrogant to listen to others.

Who can tell you how to change your processes for the better? Everyone.

The most obvious would be those you sell to; you need to provide only the best for your paying customers and clients. But, you can also seek advice from colleagues, partners and even competitors.

Your employees also represent a valuable source of information. From top executives down to the lowest-paid hourly workers, each may have excellent insight into how you can make improvements.

When incorporating Kaizen into your business philosophy, remember that the key aspect of the concept is ‘continuous’. The evaluations and considerations for improvement must be regular occurrences, as the business environment itself is in a constant state of evolution and transformation.

Embrace change and seek out ways to improve, and allow Kaizen to work towards your businesses’ success.

This article has been contributed by www.officeallsorts.co.uk, where you can find extensive advice for small businesses and a range of office supplies and furniture. 

 

 

Filed under Business, Continuous Improvements, Human Resources, Kaizen, Leadership, Lean Manufacturing, Manufacturing, Project Management, Training Tagged with , , , , , , , , , , , , , , ,

Doing More with Less

March 8, 2013 by Leave a comment

That is the business reality of today, is it not? To do more with less, more demands from your shareholders, governments and employees. More demands from your community and especially from your customers. Those demands have to be meet but in the challenging price driven markets the likelihood of increasing costs to meet these demands is really zero, in fact you may need to lower your cost base while meeting these needs.

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Tough trying to figure out how to do it all

When preparing the article I saw a post on a blog site called Friday’s Reflections (real nice blog) and it was an old quote from Benjamin Franklin – “The bitterness of poor quality remains long after the sweetness of a low price is forgotten”, that also made me think of another one from a highly regarded person in our industry Joe Avento who would say – “Price, Quality and Delivery, pick two!” The fact is while that used to be true, now you can get it all at a low price. The market is so competitive that if you sacrifice any of these then you sacrifice your customer. So then how do you get there?

How do you ensure your internal processes are at a high level while maintaining low overheads? How do you do this while providing a safe and rewarding work experience for your employees? How do you do these while meeting all of your legislative requirements and mitigate risks to the public?

Well to be honest no one has all of the answers but here are some of the best solutions I have witnessed or been a part of.

  • Bring your brain to work please! That is something that has been long forgotten with employees throughout a company. Many times it was please leave your brain at home and we will do the thinking for you. If however you want to maximize your performance you need all hands on deck and you need them to participate. Employees know their job better than anyone else and they are usually the best at figuring out how to make it better. You may need to help them with some training and you’ll need to provide recognition for their accomplishments, but it is well worth it. This will also help engage and retain employees as they will feel much more valued.  Jugi pictures June 8 2011 078
  • I’ve said it before and I will say it again, embrace Lean. You need to continue to look for improvements, reduce wastes and redundancies and improve your quality and safety. Invest in the training and you will find all of these solutions. Lean is a proven method of working that helps change your culture and develop systems that create a sustainable work force. To be a success though as a leader you must champion this and be prepared for journey and not a quick fix.
  • Buy the software. Some areas of the value chain do not need as much attention as others and you need to understand which of these can be handled with inexpensive solutions. Much like the personal tax software, there are pre-packaged programs to help small to medium business in areas like human resources, quality measurements or any other multitude of business areas. Let your people focus on the areas they are experts and use other tools to fill in those gaps
  • Temporary or sub-contract help. The software is good on the simple stuff but sometimes you may need an expert and unlike the “good old days” you cannot afford to keep all of these people on staff. For the annual environmental audit, IT support or employee benefit sourcing as examples, you may need to subcontract out an expert to maintain your systems and also lower your costs.
  • Embrace technology. Look new technology can be expensive and an upfront capital cost may scare some people especially in such uncertain times. However if you do not reinvest in your company eventually you will wake up and find yourself to far behind in the race to even catch up. If you do not have the appetite for new with all of the companies that closed when the recession hit hard there sadly is a glut of good used equipment available that is great shape is far less costly than new. You need to balance your current fiscal needs with your plans for future growth and used is a great balance.
  • TerryDeeks
  • Work with others. Keep your friends close and your enemies closer might be relevant here. Creating strategic partnerships with companies that might even be a competitor can help you create a more beneficial package for your customers and also share resources that can help lower the overall cost structure for both businesses.
  • Great customer support is still the trump card. All companies will make mistakes no matter how great their systems, the technologies and their products. It is how you handle the issue that will make the difference. One blog I read a lot is Sales Coach and the author has great articles on the importance of good customer service. The best I can summarize it that if you treat your customers well, are patient in the face of frustration and present reasonable solutions you will likely be granted a second chance. It is up to you not to need the third one.

It is true that surviving alone in the current economic state is difficult, thriving is exceptional. You must have a good product that can be available when your customer wants it and at a competitive price, because if you can’t someone else will and they may come from half way around the world. That coupled with demands from your government, employees, shareholders and citizens means increased demands on you and your workforce. Finding solutions to balance those demands without increasing prices is demanding but doable. You must continue to find the solutions that fit your business model and industry but hopefully some of the ones we offered can help.

Cheers,

Lorne

Filed under Business, Continuous Improvements, Economics, Health and Safety, Human Resources, Innovation, Interesting Reading, Manufacturing, Sales and Marketing, Strategy, Training Tagged with , , , , , , , , , , , , , , , , , , , , , ,

Lean Tools – Not just for manufacturing,they can increase sales

December 6, 2012 by 1 Comment

If you ask people what they think of when they hear the phrase continuous improvements, the majority of people will say lean manufacturing. This is of course natural as it is the birth place for the CI movement and for a lot of companies where the largest costs and opportunities lie. However the mistake that is made is assuming that this is where you should focus your activities.

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If you are familiar with value stream maps or Michael Porters Value Chain you will see that many aspects of the business impact the cost and the company’s margins. This simple look especially when over-layed by your balance sheets will let you understand your biggest cost. Of course many will think that this will automatically lead to production. As production has streamlined the focus for many companies has moved onto other high opportunity costs such as procurement and supply chain. The issue that this brings is that it is not balancing saving with opportunity gains.  Opportunity gains are not about reducing cost per piece or hour, but increasing revenue. Opportunity gains in the traditional manufacturing sense would be items like yield, quality or increased output per effort hour. What opportunity gains manage to do is increase revenue per unit of measure or increase overall efficiency.  Of course in manufacturing terms this means that you sell the increased volumes or decrease expenses with reductions in fixed and variable costs. Each of this has a positive impact on the bottom line and is the best way to demonstrate why continual improvements are essential to business. The issue is that you are missing fundamental areas of the business that lean tools can impact by increasing the opportunity gains.

When many companies create these savings they balance the opportunity gains by lowering price per unit to increase sales while allowing for increased margins. The formula is to find the right balance will increase and maximize profit, but unknown is that this is usually only a short term gain. The price reduction gains will have a short term bump in sales and provide an improved margin but this is not be sustainable as competitors will eventually match the market price and regain share. So the company will then need to further reduce costs or attempt to reduce price again and return to original margins. So how do you avoid losing some if not all of the financial gains that you realized from your continuous improvements?

You apply the same principals to your sales and marketing team. I am sure there are some worried sales people thinking reduced expense accounts and cheap hotels.  Of course costing efficiencies are important but this is not the true value in “lean sales”. Actually if you are to minimize costs, I would not do it at the expense of comfort for your salesperson. You do not want an unhappy employee to be the first impression too your customer. No lean sales are about maximizing sales per effort hour. This means tracking the efficiencies of the department and determining if there are more effective routines. Do you do enough follow up or research are your inside sales people able to increase sales?

Value Stream Map

Our Sales Mapping done in 2011

Two years ago we decided that locally our issues were in revenue or lack thereof and so instead of running another value stream map focused on production gains, we focused on our sales routines. We tracked quote hit rate by product and customer, we focused on effort hours by inside sales and outside sales and we also looked at our market price levels. In utilizing lean techniques we reallocated inside sales jobs to include larger segments on customer follow ups. We freed there time by creating a quote no quote matrix and defined outside sales travel routines. The result was an increase in sales of 25% for the first year and 40% the second, both well ahead of the market curve.

This increase now has us refocused on production to ensure that we can handle the increased volumes. As we progress we will move our focus to other areas of our business by reviewing where the largest potential is that allows us to continue to grow.  Remember lean is not just a cost cutting tool, it is about improving your business and creating a sustainable future.

Cheers,

Lorne

Filed under Continuous Improvements, Sales and Marketing Tagged with , , , , , , ,

Want to be innovative? Think lean

December 3, 2012 by Leave a comment

I think the phrase that bothers me the most is, “that there are no innovative ideas left in this industry.” What this is saying is that you believe that there are no efficiencies to be found or product that can be created to change the landscape of the market at all.  Imagine if that attitude was in the auto industry or television industry even ten years ago. Booth of those industries are very mature and growth was not high on year to year sales, but innovation and the need for transformation created a huge change in both industries. For the television it was the internet, flat screens and high definition that allowed massive changes over a short period of time. Can you even buy a television with a tube anymore?

The automotive industry was pushed for change by environmental groups and consumers worried about increased fuel costs. This created a need to develop engine efficiencies, hybrids and electric cars. The ideas of course mentioned here is innovation in a more “traditional” sense of the word. The act that creates new products and new technologies is how most people define innovation. Apple TV was innovative but Samsung’s new 50” LED TV this year is not or is it, if it is 15% lower in cost than it was a year ago.

We have spent time in the past focusing on the 4Ps of innovation. For those that are not familiar with this concept it is discussed in depth in many of Joe Tidd and John Bessant’s books like Managing Innovation and Innovation and Entrepreneurship. The 4P’s define innovation as the act of implementation that creates an overall change in the concept of a product or market. To be more specific the 4 Ps are:

Paradigm (The way we think of our company or sectors we enter) Hyundai built there business in as a construction firm and then added motor and finally cars. Each new addition changed the shape of their company and the markets in which they entered

Product (This can literally mean the invention or change of the product) the invention of new products or substantial changes to product can be seen with the way we listen to music. Thank you Saehan for the MP3 player….nope was not Apple.

Position (The way we sell the product) Apple moved the tablet in people’s mindset from a great tool for professors to a fun consumer product and now Microsoft wants to bring it into the workplace.

The last of the four is called Process and this is something that we spend a great deal of time with in the continual improvement field. Process is the ability to change the way we produce goods or deliver services to be more effective. The concept of lean manufacturing which can be based on works of people like Frederick Taylor, Henry Ford and Shiego Shingo to name a few. These people and their companies each developed new ways and methods that we managed our production. They developed systems and techniques to better utilize managers, employees, equipment and the overall process flow.

The development of these methods has moved beyond the manufacturing scope and created new systems to deliver services such as logistics, procurement, administration and sales which are more efficient today and as important as any other form of innovation. When you think know to how you can make product decisions and purchase product from your home, this is a great example of process innovation and lean concepts.

Many of us miss the importance or even recognize this form of innovation. However it is this form of innovation that helps us to push all the ability to invent new technology. Without focusing on process today we would have very few automobiles, televisions, computers and other forms of technology. They would exist yes, but only for the rich and not to the masses. The ability to streamline and create efficiencies is how we see flat screen televisions and blu-ray players at 20% of the cost they were at the outset of the developmental stage just 5 years ago.

So while we may not see innovation in a mature field they are right in front of our faces. The ability to refine the process, reduce waste and create efficiencies that can change the products price and quality are as important as changing the way the product is utilized or creating a new product for the market.  This also means that if you are not focused on continual improvements, whether lean manufacturing, lean administration or any other focus that can create improvements, then you are missing a truly innovative way of thinking and working.

Cheers,

Lorne

Filed under Continuous Improvements, Innovation Tagged with , , , , , , , , , , ,

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