Three Ways to Create Improvements

Off the Cuff --- Three Ways to Create Improvements

#1. Best Practice - Simply stated, “best practices” are business operations that are commonly used by financially successful companies. The identification and study of best practices is now widespread and has contributed to significant operational improvements in many industries. This powerful tool originated from a simple, almost obvious premise: at some level, most business organizations do the same things. Therefore, by examining those organizations that do these common processes extremely well, we can quickly find ways to improve our own business. Significantly, best practices offer a way to learn from any organization in any industry, provided that both organizations share a “common process.” Here are some guidelines to using best practices effectively:

• Remember that they are only correlated with good performance – be sure to use them as ideas for solutions rather than relying on them to fix problems that are specific to your company.
• Good sources for best practices include the industry press, trade associations, peers in other markets, information from suppliers and customers, and general business literature.
• Never blindly adopt a practice, even from a direct competitor, until you know exactly how it will work in your organization.

#2. Streamlining (Process Reengineering) can often help you discover process improvements. Streamlining refers to the act of removing steps and time from business processes. Because time usually equates to money, streamlining can often lead to significant bottom line improvements. The following are a summary of these principles:

• Document the way the process really happens, not the way it should happen.
• Evaluate every step in a process to see if it is really necessary.
• Avoid unnecessary hand-offs between people. This is typically a large source of error.
• When in doubt choose error reduction over speed. It is estimated that over 25% of the labor cost in the distribution industry is involved in correcting errors.
• Attempt to do steps in parallel (at the same time) rather than sequentially.
• Reduce variability processing time – even if all steps have the same average processing time, variability will always reduce overall throughput.

#3. Benchmarking is a simple concept that is too often overlooked. Tremendous insight and problem solving ideas can be generated solely by observing how someone else runs a similar business to yours. Benchmarking involves searching for the best way to perform specific tasks in all functional areas. It is all about trying to become the best of the best and employ best practices that can generally be observed at those companies that perform in the upper quartile of performance.

However, benchmarking can be valuable regardless of how the company you are benchmarking performs. Even observing less than effective functional performance can teach us something and may in fact validate the things that you are doing right. Of course, benchmarking top performing companies is the ideal situation. Looking for companies that use different methods in accounting, customer service, sales, marketing, operations and inventory management can provide tremendous opportunity to evaluate your own processes and procedures for improvement methodology.

There are basically four types of benchmarking.

1. Intercompany Benchmarking – This process analyzes the top performance in key functional areas and looks at applying it to other functional areas.

2. Competitive Company Benchmarking – This is the study of a friendly competitor that allows you to come into their business and observe their practices. Generally this can be done with competitors that are not in your geographical service area. Keep in mind, it involves quid – pro – quo by allowing that competitor to observe your practices as well.

3. Similar Company Benchmarking – This is simply observing a company that is not a competitor but may be in a similar or related business. Although products may be different, systems, process and practices are often the same. This can provide insight for improvements in your business.

4. Functional Benchmarking – This type of benchmarking focuses more on a specific function such as “inventory management” among any and all companies anywhere that may be willing to allow you to observe and learn. The key is searching for the very best methods to excel in that particular functional area.

Benchmarking goals should be centered on making your company the absolute best it can be based on the top performance of other companies. Focus on targeting newer companies in your industry. Older companies often have an innate resistance to change, new ideas and new technology.

On the Lighter Side ………… Washington, DC and “The Freedom March”
Tracy and I spent a five days in Washington, DC this month and had a terrific time. One of the highlights of our trip was a four hour Segway tour of the city. It only took about twenty minutes to learn how to ride these things. They were an absolute blast. Tracy rode hers like she was Mario Andretti and was constantly in the lead of our group of ten. I was much more conservative and seemed to linger at the rear of the pack. We also toured all the monuments at night with the most impressive one being the Korean War Monument. Standing there looking at a number of statues of our soldiers coming out of the woods at dusk was an eerie feeling; a feeling that made you proud of our veterans, proud of our current soldiers serving in Iraq and Afganistan and proud to be an American.

The Vietnam memorial brought back many memories and the WWII memorial made me think of my Dad that served as a navigator on a B-29.

We also went to several of the Smithsonians but you actually need several days to really take advantage of the many divisions of this wonderful and education institution. We also visited the spy museum which was quite interesting.

When we first arrived in DC we weren’t very experienced at using the subway system and I almost lost Tracy. I don’t know how many of you remember the Kingston Trio but there song the “M.T.A.” about a subway system almost became reality for Tracy. The chorus to their hit went like this:

“Well, did he ever return? No, he never returned and his fate is still unknown.
He may ride forever 'neath the streets of Boston. He's the man who never returned.

Charlie handed in his dime at the Kendall Square Station and he changed for Jamaica Plain.
When he got there the conductor told him, "One more nickel." Charlie couldn't get off of that train.

Now, all night long Charlie rides through the station, crying, "What will become of me?!!
How can I afford to see my sister in Chelsea or my cousin in Rocksbury?"

Charlie's wife goes down to the Sculley Square Station every day at quarter past two,
and through the open window she hands Charlie a sandwich as the train comes rumblin' through.

Well, did he ever return? No, he never returned and his fate is still unknown.
He may ride forever 'neath the streets of Boston. He's the man who never returned. He's the man who never returned.”

Let me explain. The first time we rode the train we entered the station and I purchased two tickets. We didn’t realize that we needed these tickets to get out of the station. Fortunately we didn’t throw them away before we reached our destination. Unfortunately, I purchased a five dollar ticket for myself but only had two ones and bought Tracy’s ticket with those two bills. When we reached our destination, the turnstile wouldn’t allow Tracy to exit. You would have thought that she was being kidnapped by the look on her face. She kept crying out for my help but there wasn’t much I could do (except laugh). I tried to tell her to jump over the railing but she absolutely refused to do that. If she would have she probably would have been arrested and I would have had a real story to tell.

I was already through the turnstile and Tracy was in a panic screaming at me that she was stuck. I couldn’t help myself and busted out laughing at the way she was acting. The more I laughed the madder she got. We just couldn’t figure out what was wrong. Finally a station attendent approached her and told she had to go over to the machine and purchase another ticket because she was fifty cents short. Once she escaped, (after she punched me), she was okay and we had a great time the rest of the day. She didn’t appreciate the humor in me singing the lyrics to that Kingston Trio song the rest of the day however.

The Freedom March

Yes, I’ll admit it. Tracy and I Went to DC while the 9-12-09 Freedom March was taking place. Many people equated this march to the war protests and other demonstrations. But, it wasn’t anything like many of those protests. The news media has reported different statistics as to how many people attended this “Freedom Rally” from 10’s of thousands to 1.4 million people. I believe there were at least a million people there. What is absolutely amazing is the fact that there no incidents of violence and this crowd of a million left the place as clean as it was s when they arrived. I was astounded to observe everyone bringing their own trash bags and cleaning up the mess before they left. As for the people that attended this rally, they were everyday people. Moms and Dads and a lot of families were there. At least twelve hundred Doctors showed up for their own special press conference. There were no angry mobsters, no evil mongers, no racists and every one there was a true American interested in protecting their personal views about the freedoms established by our constitution.

This rally wasn’t just about health care reform. It was about Government spending, Government control, Cap & Trade, the deficit, unemployment, the recession and health care reform. The crowd wasn’t about being Republican, Democrat, Independent, Libertarian or any other political party. The people were simply Americans expressing their concerns about the current political environment in Washington. There primary objective was to let their Senators and Congressman know how they feel and that they are concerned. This was a historic event and an incredible site. We were glad we were there to witness it.