PSMJ RESOURCES, INC. – No matter the industry, both product and service-based businesses can always benefit from the strategic use of process-improvement concepts and tools. In the construction, architecture, and engineering fields though, the use of continuous-improvement strategies can be crucial to not just surviving in business, but actually thriving.
Helpful techniques implemented in the right way can have a huge flow-on effect in many areas of business. This includes increasing sales and profit levels, reducing costs, improving turnaround times, efficiency, and productivity, lowering risks, and increasing customer satisfaction and referral rates.
However, when it comes to choosing which strategy to implement, the choices can be a bit overwhelming. While you might be familiar with words or phrases such as “Kaizen,” “Six Sigma,” and “Just-in-time,” you might not be so sure what each tool can offer and how to decide which to implement in your business.
If you’re keen to start making use of some new strategies this year, consider enrolling in an online degree that specializes in the area of process improvement. To first get a taste of the types of tools that are used though, read on for some of the top choices utilized by large and small companies around the world.
One of the most famous users of the Six Sigma system would have to be global behemoth GE. This billion-dollar company’s share price increased almost ten-fold in the 1990s and the business reported nine straight years of double-digit growth in profits in the same decade. Much of this can be attributed to CEO Jack Welch’s focus on efficiency and streamlining. One of the ways in which the company transformed at the time was through utilizing Six Sigma.
This management philosophy is used around the world by some of the biggest companies on earth, and revolves around measuring and analyzing data extensively. It was developed by Motorola in the 1980s as a way to hugely refine the measurement of defects in the manufacturing process, and as a result, get as close to “perfection” as possible. Motorola achieved massive savings of $16 billion from the introduction of the new technique, and it has since evolved and expanded over time.
Six Sigma works so well because it involves systematically measuring the defects in a process in order to weed each one out. The tool focuses on collecting data, working to very high objectives, and analyzing results methodically. Although Six Sigma was initially developed to eliminate faults in manufacturing, it is now used across hundreds of industries and can be utilized in all areas of product and service creation, sales, distribution and so on.
In order for a company to achieve a Six Sigma rating, it must not produce over 3.4 defects per million “opportunities”’ (basically anywhere there is a chance for non-conformance). In this measurement and process-improvement system, a defect is classified as anything that is outside of customer specifications.
Created in Japan after World War II, the Kaizen method literally means “continuous improvement”. The name comes from two Japanese words, “kai”, meaning to correct or change, and “zen”, meaning good. The methodology first stemmed from the Japanese car company Toyota, and has had a huge influence on the manufacturing culture and other related industries, not just in Japan but all around the world.
The Kaizen methodology expounds the concept of sustainable continuous improvement. When using this approach, companies seek out daily improvements from every team member and for every process within the organization. Rather than leaving process changes just up to managers, Kaizen gets all workers in a company involved in the process of continuous improvement. It allows employees at every single level to contribute feedback, ideas, and suggestions any time they see an opportunity to improve the way things are done.
Apart from the many benefits that a company’s bottom line sees from implementing the concept of Kaizen, one of the most positive influences it has is on engagement and culture within a business. Due to the fact that all personnel within a company become collaborators and help to evolve the organization over time, there is no longer the usual battle between management and other workers.
Those on the “front lines” of the daily operations of a business feel listened to, appreciated and valued, and can take pride in the difference that their ideas make. They also often get to enjoy less stressful, or more productive or safer workplaces after problems are resolved and new processes put in place.
Just-in-Time (JIT) is a continuous-improvement technique that can drastically improve a company’s cashflow. Primarily used in the production process, JIT improves the return on investment in a business through the elimination of waste, and increase in product quality. The method gets companies to closely examine inventory levels and schedules.
Essentially, businesses reduce the amount of stock or parts that are on hand, and instead only source materials and schedule production “on demand.” The idea is that products are made only when needed, with all of the necessary materials for production only ordered and delivered as they are required, or “just-in-time.”
This lean manufacturing tool not only eliminates wastage and frees up cashflow, but also contributes to improved organizational efficiency throughout a company’s operations. It reduces the need for large storage facilities, leads to the redesign of workspaces to help goods and processes flow more smoothly, and minimizes transportation of parts and other materials.