The goal of any company is to make money. Sure, there are plenty of companies out there who want to better the world, create great working environments, and provide the best customer service available. But do you know what you need in order to do those things? You need money.
Companies of every size are always looking for ways to maximize the bottom line. One of the best methods for doing this is through process excellence.
Process excellence involves reviewing all procedures, tools, people, and processes in order to find opportunities for improvement. Methodologies for obtaining excellence have been created over the years, and include such notable ideas as Lean Process Management and Six Sigma. Each of these methodologies concentrates on reducing defects and waste within a process in order to increase profitability.
Regardless of which methodology is used, reducing defects and waste is the number one effort of any process excellence initiative.
Defects are any mistake in a process. This can include defective parts or products, or mistakes made by a person in data entry. Defects in parts means lost labor time and cost of materials; Mistakes by employees may mean extra cost in rework or correction.
Waste is not always the same as defects. Although there is waste associated with mistakes, there can also be waste in a process that has no errors. For example, a company might have a process that requires a person to carry only a single item at a time from work station A to station B. A review of the situation may find utilizing a cart to carry ten items at a time might be faster. This would be an example of a waste of labor hours, or time.
There’s also a good argument for implementing six sigma management practices into the company process, but that is a subject for a whole book. Right now you need to focus on implementing process excellence to streamline your organization.
When costs can be saved through reduction in defects or waste, the process is improved, and profits are maximized.