The 3 critical processes you must try and improve at your business

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If we had to make sure that just three processes were working as efficiently as possible in our business, which ones should we choose?

According to David Bovis three timelines developed by Toyota are enough:

  1. How we convert raw material into finished goods
  2. How we go from concept to launch
  3. How we go from order to cash

So, what are we trying to do when improving each of these?

Raw material to finished goods

The whole point of our business is that we add value to something. Whether its taking raw materials and turning out a physical finished product or providing a service that carries out some kind of knowledge work, we still need to work our way from a start point to an end point.

In a world with infinite digital storage space we end up keeping everything. Emails from ten years ago to every bad photo we ever took.

It takes real discipline to stop things piling up – whether in visible piles of stuff or paper or in ever growing digital folders.

So how can we improve this process? There are four things to look at:

  1. Maintain systems before they fail: From manufacturing systems to computer equipment, we need to look after our kit.
  2. Reduce the amount of parts and supplies: Do we need to have ten different types of notebooks in the supply cabinet or buy a year’s work of cleaning supplies?
  3. Keep things in the right place: We often can’t find stuff just because it’s not put back properly.
  4. Put stuff that needs to be thrown away in a set place: When things are ready to go, put them in an agreed place so they can be removed.

Concept to launch

This is an interesting one – especially if it’s taking a new product to market.

We need to create things that customers want more than they want the money in their wallets.

Just building it isn’t enough – it needs to be saleable – exchangeable for real money.

That means we have to work backwards from what customers really need (which isn’t the same as what they say they need) and build products to address their needs.

Everything that doesn’t do that is optional – perhaps even wasteful.

Another consideration – not always taken into account by product developers – is that customers, especially business-to-business ones – will choose an option with less risk over one that has a better price.

If something does what is needed and can be shown to be robust, it can often beat a competitor with more bells and whistles.

Order to cash

The final process to get right is the timeline from order to getting paid.

For many products, or services sold like products, we pay up front and receive the product later.

Service businesses, on the other hand, tend to invoice after the work is done.

Improving an order to cash process means looking all businesses, whether product or service, as product businesses where all or some of the payment is made earlier in the process.

Summary

For all three timelines, we’re trying to keep only what is needed – remove everything that adds waste and keep the things that add value.

It’s how we do that which matters.

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