In our previous blog posts, we talked about the importance of having a well thought out strategy, focusing on the right products and services to deliver that strategy, and a marketing and sales program to generate interest and sales. In this article we’ll discuss the next phase, delivering those products in an efficient and effective way – via your business process and operations.
For a business to be profitable and meet its strategic goals, it must be able to sell its products for more than it costs to make them. The key is to understand the cost and revenue details of your business, and ensure your operations are running as efficiently as possible. For a business owner, ask yourself these key questions:
- Is there more than one person performing the same task in your business?
- If yes, is that process documented and are the staff performing the task consistently, with the same quality?
- Are people following documented procedures, or are they “going by memory”?
- Do you know each step in your production process, and which are the bottlenecks?
- Do you know which of your products have the highest / lowest margins?
Depending on the size of your business, you may know the answers to these questions intuitively or have reports and hard data showing the answers. If you don’t know the answers, you should start increasing your awareness of what’s going on in your business and begin by mapping out your processes.
The best way to understand your operations, including costs and revenue sources, is to start process mapping your business. This means drawing out individual operational processes to capture information:
- What steps are taken to complete a task
- Who performs those steps
- How long each step in the process takes
- How many items are processed each hour, day or week
By collecting this information via process mapping, you will gain an understanding of what is happening in your business without having to rely on memory.
Mapping out your process is just the first step. You then need to determine how you can use this new information to improve your business. Some typical types of analysis you should consider for your business includes:
- Analyzing the potential improvements enabled by the new software/technology
- Looking for redundancies
- Identifying process lags, such has hand-overs in a production process
- Creating process improvement “return on investment” (ROI) calculations
You’ve found some potential improvement areas by analyzing your operations. You need to make the changes actually happen. This is the hard part. Focus on fully implementing them prior to taking on more, Rise Advisors recommends you only select the top 2-3 improvement initiatives. As a result, improvement is:
- Designed – mapped out on a “future state” process map
- Documented – write down process clearly
- Trained – people are trained on the new process
- Activated – people are using the new process
- Verified – it is working independently and more than 3 months later
If you require assistance with any of these steps, give our Business Improvement team a call, and we would be happy to discuss solutions. We are experts at this, can determine the best solution for your unique situation. Our team works tirelessly on process mapping, analysis and improvements. Of course, analysis can’t be done without the access to information, and it must be acquired and observed correctly.