Thursday, August 12, 2010

Quality Everywhere!

On several of my Virtual CFO engagements, I was asked to look at the effectiveness of key operating processes. I had the chance to roll out quality tools and approaches in a lot of different places ranging from an Amish Fine Furniture Maker to cabinet makers in Washington and Florida.  

As part of the Six Sigma quality assessment process, you need to have measures after you defined the process.  In a couple of cases we had existing data, but wanted to engage the production team.  We created a simple manual tracking chart that was placed on the job floor to measure key process milestones.  It was as simple as placing some flip chart paper on a wall with volume lines and dates.  The shift supervisor updated it at the end of each shift and added any notes.

It was interesting to note that we saw process output improvements as we started to measure the process without making any process changes. Other than the act of measuring!  We saw teams beginning to exhibit "one-upmanship" as they wanted to out perform other shifts.  For these businesses, labor and materials were key cost drivers.  Besides working faster, we identified some work flow, floor layout, supply chain, and communication issues that improved productivity and reduced waste.  Several simple paper tools were used to improve the process. On average, the businesses realized over a 20% improvement in productivity that made a noticeable improvement in operating margins and cash flow.

Feel free to contact Steve Cassady for more information on improving your processes.
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