Continuous improvement through using metrics

Question: Is there anything you could have done different to influence your continuous improvement programme in your business?

Most businesses implement some sort of continuous improvement programme from the first day of trading. There are a variety of continuous improvement methodologies used such as Lean and Total Quality Management that all have similarities. One of the common improvement models is PDCA:

·        Plan: Identify an opportunity and plan for change.

·        Do: Implement the change on a small scale.

·        Check: Use data to analyze the results of the change and determine whether it made a difference.

·        Act: If the change was successful, implement it on a wider scale and continuously assess your results. If the change did not work, begin the cycle again.

Of the 4 steps, the one we continue to see companies have challenges with is Check. Collecting the data, compiling and transforming it into useful measurements can be complex and overwhelming. Most organizations will use observations and spreadsheets to evaluate the results from the changes. This can work, but it is very labour intensive and difficult to maintain on an ongoing basis.

Using Metrics to measure and enable your continuous improvement initiatives and identify areas for improvement can actually be a very easy and fruitful exercise. It is important to identify the real drivers of your business, within its specific industry, and metrics can help in this regard.

Overview

Metrics can be integrated quickly and easily with your work flow data and provide objective cost and performance metrics on all the processes in your operation tracked by your data systems.

Metrics takes a holistic approach and provides measurements for all operational and cost centers. One common problem we encounter is companies will focus on a specific process to improve but then lose sight of the big picture, e.g. a company will focus solely on productivity metrics without looking at the time and cost spent on non-productive work and missing time. If you do not track the latter, you may see your productivity improve on direct labour processes, but those labour savings then interacts with the indirect labour processes and no true cost savings are achieved.

Business Diagnostic Instrument

The Business Diagnostic is a South African designed instrument based on South African and best practice information and data obtained from South Africa around the world. It is suitable for use in small to medium sized companies. The Business Diagnostic defines the essential business drivers that allows for an objective assessment of the status of a business and the setting of objectives and metrics (or KPIs) for growth. It is intended to become an instrument of self-assessment and do-it-yourself for owners, directors and their senior teams.

The diagnostic  assessment is a system that allows owners and teams to establish the overall health of their business, in terms of their current and past performance. It also provides a benchmark by which one business can be fairly compared to another, even if they are in completely different industries. Documentation and supporting information to guide a user to arrive at an overall score for their business is available. This score, known as the “metric” is the primary indicator of the state of health of a business. All responses and the report generated remains confidential and are shared in anonymous status.

Methodology

The methodology of the Business Diagnostic is protected intellectual property and proprietary to Lohbauer Associates CC. The system involves a process of calculating a series of carefully weighted, pre-calculated scores which serve to analyse a business. Research and development of the product has involved piloting with a wide range of business types and sizes to ensure compatibility and accuracy of results. It has also been adapted to be industry and sector specific.

Where to from here?

Contact us for a no-commitment consultation and estimate on what it might take to get your programme aligned with a self-measurement and industry relevant assessment. Contact Reinhardt Lohbauer at [email protected]