Just like the seasons, economic busts turn into economic booms. Whether the economy or the stock market has bottomed out is irrelevant; one day soon the economy will turn around. Will your business be ready to handle the increasing volume of orders smoothly and efficiently, or will you find yourself back in firefighting mode, scrambling to deliver?
While most businesses are whining about the recession, a few are preparing for the recovery. They know that now while business is slack, is the ideal time to tune up their operation. Don’t waste this opportunity. If you want to be ready for the recovery, the time has come to simplify, streamline and optimize your organization in preparation for the future.
Step 1: Simplify
Over the years, every business collects clutter: unused materials and machines that muck up daily operations. The solution: Spring cleaning! Go through every nook and cranny and throw out anything that is out of date or unused. Organize what’s left so anyone can find it when they need it. Label the locations of all materials and tools to make them easy to find.
Step 2: Streamline
Businesses grow organically, not systematically. So they often look more like a gnarly tree than a set of railroad tracks. This convoluted workflow takes too much time and causes preventable errors.
Eliminate Unnecessary Movement: In any business, walking is waste. Unnecessary movement of people, machines or materials is wasteful and slow. Reorganize the flow of work to eliminate unnecessary travel.
Eliminate Unnecessary Delays: Remove the delays between steps in the workflow. In most businesses, the product or service spends 57 minutes out of every hour waiting for the next employee to do something with it. When you look at the total time from order to delivery, employees are only working on the product or service for three minutes out of every hour (the 3:57 rule). When businesses eliminate the delays between steps, they can reduce turnaround times by 50 percent or more, double productivity and increase profits by 20 percent or more. Companies that eliminate unnecessary delays also grow three times faster than their competitors.
The mistake most managers make is looking at their employees and thinking: “Our people are busy.” And they are, but the product or service isn’t busy most of the time. When you eliminate the delays and unnecessary travel, employees don’t have to work any harder, yet the product starts working much harder. Eliminating unnecessary delays and travel makes the company faster, which delights customers. More importantly, they will tell their friends. Nothing beats word-of-mouth to grow a business.
Eliminate Unnecessary Inventory: Hold onto this thought: Inventory is evil. Raw materials and finished but unsold goods take up space, time and money. In most businesses, some level of inventory is necessary, but companies often stockpile materials they rarely need. Figure out how to get them when you need them.
