Hidden Dollars in your processes
The hidden dollars in your processes goes right to the core of where the money lies in waiting for your to release it.
Every company has its own share of opportunities, problems, issues and frustrations, which point to where profits lie in waiting.
Process profits can by maximized with numerous interventions. Of which the common categories are:
1. Cost Saving
Where the case for the profit is focused around reducing bottom line costs within the process, that are directly attributable to Profit and Loss account cost indicators.
2. Efficiency Improvement
The case for this type of profit is based around process improvement, linked to either cycle time improvement or reductions in process variation which ultimately leads to increased right first time Fields.
3. Revenue / Sales Growth
The case for these profit is focused around significant shifts in sales growth based on improving product and service to the customer.
4. Cash Generation
The case for these projects revolves around the increase of working capital in the business.
General Guidelines for Profit opportunity Selection
- Profits can be either operations or services.
- If you already know how to improve the profits, then just go fix it without much discussion.
- All profit opportunities need to be approached from the perspective of understanding the variation in process inputs, controlling them, and eliminating the defects.
- General profit opportunity statements start with:
- Reduce expenses at...
- Reduce scrap...
- Reduce downtimes... or increase uptimes...
- Reduce rework...
- Increase throughput at...
- Reduce quality defects...
Identifying Areas where the hidden dollars in your processes lie
To identify the hidden dollars in your processes ask the following questions:
Hidden Dollars in Your Processes 1
Reduction of Cost / Defects
- Are there any occurrences of high volumes of rework and/or defects?
- Are their areas of high cost in the business?
- Have there been any failures besides the preferred specifications?
- Does the given process possess a high degree of variation?
- Would any scientific adjustments to the process result in forceful changes or cost reduction?
- Does the process have any residual scrap?
- Which inputs need to be managed for producing an unfailing output?
Hidden Dollars in Your Processes 2
Reduction of Cycle Time
- Is the resultant production of the process below the one expected?
- Do any of the processes depend on multiple hand-offs between the individuals?
- Is the process being delayed because of machine/computer downtime?
- Does the process require a lot of overtime?
Hidden Dollars in Your Processes 3
Reduction of Resource Consumption
- Does the process need more workers for doing the job?
- Does the process undergo a high variation in the consumption of material?
- After identification, project information is reviewed in a standardised quad chart format that is presented to the steering committee.
Hidden Dollars in Your Processes
Understanding Process Variation Idea Sources
- How much variation is there in your incoming materials and/or process parameters and how does this affect your output?
- Where do you need the input controlled to always have a good output?
- Can you scientifically adjust your process to compensate for changing material, weather, etc.?
- Can your team help your supplier do a project to control the incoming product where you need it?
- Does understanding your inputs allow you to produce a good part using less material?
External, Internal & Capacity Profit
- Audits (customer, regulatory or internal) discovering non-compliance issues
- Any out of specification (customer, regulatory or internal) output
- Any inspection process in your organization
- Anything you cover for by having a guy in the customer's plant, office or facility
- Financial statements, Scorecards, KPI etc.
- Any scrap produced by your processes
- Any item reworked in a process (sales contracts, invoices, surgeries, software, etc.)
- Any process with high variation in the product output
- Any process with high variation in the material consumption
- Any process with many "hand-offs" between individuals or business groups
- Financial statements, Scorecards, KPI etc.
- Processes producing less than expected
- Processes requiring overtime not requested by a customer
- Processes requiring cycle times in excess of expectations
- Processes with computer/machine downtime
- Processes requiring expedited shipping and associated costs due to delayed output production
- Any process that has added labour to make the required cycle