Introduction to Continuous Improvement
Whether you are a startup, mid-sized company or large corporation, valuing continuous improvement is integral to your organization’s success. Guiding your business forward through today’s evolving trends and intense competition will be critical for sustainable growth. How can you keep your company on top? What organizational practices can you employ to continuously improve? Is continuous improvement possible? Is digital transformation the answer to your common problems?
Cherry Bekaert’s Digital Advisory receives many questions from our clients about improvement. Some see uncertainty on the horizon and want to reposition themselves ahead of potential headwinds, while others show interest in the fruit that improvement produces. However, this harvest requires ongoing effort and expertise. Some organizations hire talent in-house, while others outsource talent with extensive experience working with management teams to guide efforts.
Continuous improvement increases companies’ agility and often begins with a top-down commitment. At its best, however, continuous improvement utilizes both top-down and bottom-up approaches, so that is integrated within company culture, decision-making processes and innovative initiatives. This “operating platform” can take years to develop, though the start to each company’s journey will often draw from the same core challenges; business moves sideways, upward trajectory is minimal, problems reoccur and new capabilities are paramount to future success.
Outline of Different Methodologies for Continuous Improvement
As you examine the need for digital and flexible solutions, improvement methodologies, such as Six Sigma, Lean or a combination thereof, can be good places to start.
What exactly is Lean/Six Sigma? At the risk of oversimplifying, here is a brief introduction to each methodology.
Lean Methodology
Lean emphasizes value and how much a customer would willingly pay a business for what it produces. Lean aims to eliminate waste, from the perspective of the customer. Lean highlights speed and flow results, especially within those processes (value streams) that generate customer value. Lean is also a philosophy that encapsulates the continuous pursuit of perfection.
Six Sigma Methodology
Six Sigma pertains to understanding and controlling variation in process outputs. The practitioner follows a disciplined process to define, measure, analyze, improve and control the process outputs by discovering relationships between inputs and outputs. Once these relationships are uncovered, improvements dial in gains and controls help institutionalize them. Six Sigma is also a philosophy that recognizes the pursuit of near perfection.
We focus above on Lean/Six Sigma. There are other methodologies as well, including PDCA (Plan, Do, Check, Act), Total Quality Management (TQM) and Kaizen. An experienced practitioner should offer options that help match practice methods and culture.
Continuous Improvement: How to Get Started
Great change management and leadership begins with a case for change, innovation and digital improvement, often asking next questions such as how big or how wide? An organization will never run out of ways to improve. However, it is important to begin with a well-sized effort that is committed, but not overwhelmed. This is where partnering with experienced advisors can really help the management team to focus resources on the best strategic opportunities, define and organize efforts, and establish operating practices that yield results.
Every business should review its capabilities. What are customers saying? Employees? Other stakeholders? Are internal measurements aligned with customer needs? Is there balance? Many times, initial efforts begin with customer-facing challenges, such as delivering shipments to customers on time, ensuring they are complete and intact, or enhancing billing processes. Customers seek an ease of doing business. Internally, we need to understand what causes flow to stop; manufacturing losses, machine downtime or material shortages, for example. Improving flow and shortening lead times is critical to providing faster services to customers, while minimizing working capital.
Cherry Bekaert is Here to Guide Your Business on the Digital Continuous Improvement Journey
Consider that an organization early in its improvement journey may have 5-20% of its revenues failing to create customer value – confined in poor outcomes. Our team of advisors can help expose these opportunities, design a roadmap for improvement and charter projects that enable a 4-10 times return on investment. If you are evaluating where to invest cash for return, consider an investment in core operations.
Cherry Bekaert offers unique insight into cost, business practices, performance metrics and key management decisions. Utilizing an agile and flexible approach, we will help examine your business operations with a focus on people, process, technology and culture.
