A Frenchman, count Gaston de Chasseloup-Laubat set the first land speed record on December 18, 1898, at a dizzying 39 miles per hour. Recently, an Austrian daredevil, Felix Baumgartner, jumped from twenty-four miles above Earth, breaking the speed of sound, and free-falling at 833.9 miles (1,342 kilometers) an hour before releasing his parachute.
Throughout history, people have been fascinated with speed—and so should YOU!
Increase System Throughput
Speed of business operations translates to dollars—increased sales capacity, higher productivity and worker satisfaction, lower unit costs, quicker turnover of inventory, faster billing and collection cycles, accelerated cash flow, and happy, loyal customers. What’s not to like?
In Old English, “sped” meant success or thriving. In business, it means much the same thing. The speed at which a company churns out products and services—its throughput—has much to do with its success.
So maybe we should get our employees track shoes and start cracking the whip…
Not so fast!
Creating a speedy business—high throughput—has much more to do with removing time-waste and delays in business processes than it does with how fast people work.
Focus on Cycle Speed
The true speed of a business system or process is the total elapsed time it takes to go through one system cycle—the first step to the last step—including idle time. For every 25% reduction in elapsed process time, productivity doubles, and costs drop by 20% (George Stalk, “Competing Against Time”).
Whether applied in the factory, the workshop, the store, or the office, here are seven strategies that will accelerate the throughput of your business operations, and lower overall costs.
- Create Smooth-running Business Systems – Get rid of steps in your business processes that do not add value to customers, such as inspection, rework, and unnecessary movement. Avoid overproduction and inventory buildup. Eliminate the idle time that work sits around on pallets or in-baskets. Pace your business systems with sales orders. The steady tortoise, not the hare, wins the race.
- Improve Quality – Don’t waste time on redo’s, repairs, and reprocessing. Create business systems with high yield and low defects (less than 1% errors). Stop and fix systems that produce frequent mistakes. This prevents the accumulation of problems for later handling. Use a 5-Whys Analysis to get to the root cause of errors quickly. (They may not be coming from where you think.)
- Elevate Bottlenecks – Look around your operation and notice where things are getting bogged down—the bottlenecks. Find ways to elevate the constraints to non-constraints. Your individual processes and your entire business are only as fast as the slowest point. Bottlenecks and weak links in a chain of tasks kill throughput!
- Reduce Process Downtime – Plan better. Downtime is very expensive. Avoid stop-start work-flows. When people switch back and forth between tasks, there is a great loss of concentration and momentum. Worker errors rise. Performance is hard to measure. Throughput drops significantly (see System Busters).
- Keep It Clean and Simple – Reduce the physical path, clutter, barriers, and distractions. Minimize complexity, customization, and exceptions in making and delivering your products and services. Eliminate uncertainty and excessive employee discretion caused by inadequate policies or procedures.
- Lift Your People – Improve employee performance with training, accountability, performance standards, reporting, recognition and incentives. Inject the fun-factor. Provide a safe and pleasant work environment with good communication systems.
- Focus on Speed – At your weekly Business Improvement Workshops, discuss specific ways to create fast business systems and processes. Start with systems that touch customers. At future meetings, report results, and celebrate improvements.
Customers Love Speed
Customers—both internal and external—want things fast, or at least on time, as scheduled, or as promised. Strive to provide a quality product faster than your competition (lead-time) in order to differentiate yourself and become the best in your target market.
Remember: shorter lead-times also increase sales capacity, billing cycles, customer loyalty, and profit.
You don’t need a lot of analysis to make significant improvements. Simple observation and reasoning can help you quickly reduce delay, boost speed, and cut costs.
For a more in-depth analysis that will get your systems in high gear, you need Box Theory™ Gold software. It will help you diagnose problems and prescribe remedies to dramatically increase speed and throughput. I predict that a little improvement to just one of your business systems will offset the cost of this powerful software tool. So, what do you say, get your software (now for FREE), and let’s get going today!