Business Principles
It is our sincere hope here at Esteemed that the input we have
given into your business for the past ten months, through these
pages has been of great help. In 2008, we are taking a turn and
seeing ourselves (you our esteemed reader included) at the position where growth and development is a must. We have established the business. We are diligently adhering to honesty and
treating our customers like kings, offering a little more than the
competition, our staff couldn’t be prouder working for us and we
are doing well. Somehow with all these things happening, we have
forgotten that we have the envy of other people and they are now
beginning to apply the same principles you applied in the beginning and soon they will catch up with you.
It is time to shift into another gear.
At this level, you need to deliver MORE profits, sales, productivity, customers and quality. You have got LESS or the SAME
money, staff, time and machinery/ equipment. It sounds easy and
complicated at the same time. Easy because you know it is possible, complicated because the “how” bit is far from being present.
Not to worry, Esteemed is here to give you some insight.
There are six areas for you to work on:
§ Understand your operation - do you know your operations/ company/ organization/ business/ firm well
enough to improve it?
Your operations consist of three basic things - Inputs, outputs
and the process that transforms the inputs to outputs. Your output depends on the input you give and the process you take it
through. Your processes ought then to add value if they are to
be profitable. Through customer and employees feedback, you
can tell what you are doing right and what is amiss. Ask yourself
several questions: Who are my customers? What do they need?
What is my product/ service? What are my customers’ expectations and measures? Does my product/ service meet their expectations? What action is required to improve my processes?
Ask the same of your suppliers (including your staff): Who are
our suppliers? What do we need from them? What are our expectations and measures? Do the resources supplied to us meet
our expectations? What is the process of acquiring the resources? What action is required to improve the processes? Do
we understand our suppliers’ processes? What can we do to help
them improve on their processes? The bottom line is to keep
customers and suppliers happy.
§ Set the right objectives—Do you have the right objectives
to steer improvement?
Even for a small firm, there are departments - sales, operations,
finance, customer service etc. Imagine if each department set its
own objectives independently without considering the others.
The best you can get from such a business is lousy customer
service, inadequate financial results, a work attitude of “us vs.
them”, lack of accountability, no sense of direction, communication breakdowns etc. The entire team must realize and embrace
the very simple fact that we work in the same organization and
for the same customers.
Whatever objectives you decide to have for your business, they
must be:
a) consistent and forming a basis for departmental objectives
b) SMART - Specific, Measurable, Achievable, Realistic, and
Time-bound
c) Customer Driven - Base your objectives on the basis of quality, speed, dependability, flexibility and cost
d) addressing the following question - if we meet/ exceed all our
objectives, what will actually happen? Will the customer be
more impressed? Will we be more efficient? Will we be more
profitable?
Smart objectives drive success
§ Improve work processing—how can you identify nonvalue added (wasteful) activity? How can you remove it?
According to Customer Services, Lead Body, UK Systems
(processes) should be designed to meet the customer’s needs
rather than the bureaucratic needs of the organization. In the
business you are running does work flow smoothly through all
the stages of your processes? Are all the steps necessary? Do
you suffer from complexity, duplication of effort and work, er-
Conceive, Believe & Achieve
rors, repeat jobs, inflexibility and high costs? All these in relation
to Customer Needs, Organization Needs and Employee Needs.
Efficient processes add value with each activity done. Nonvalue-adding activities (NVA) need to be eliminated because
they are time and effort wasters. To identify if the process adds
value ask two questions: Does the customer value the activity? Does the activity get it right the first time? Eliminating
these NVAs involves the use of Operations Flow Charting (OFC)
and this will go the extra mile in helping you design more efficient processes. The OFC is simple, classifies activities as Delays, Operation, Inspection, Transportation (movement) or Storage (filing etc), quantifies time spent on each activity and quantifies the distance involved.
§ Increase capacity - are you meeting demand? What action
(s) can you take? How efficient are you resources?
Capacity is said to be the X^[][HX