We are living in a world that constantly requests us to cut costs of our business. There are professionals in consulting and accounting industry who are (as they insist) specialised in cost cutting through process improvements. Then question is…. Why do we need process improvement to cut costs? Why not just not spending money or at least taking ‘money well- spent’ type of strategy? The answer is….. you are absolutely right! But there is still a problem. How do you judge the money you spent is really “well-spent”?
Process improvement is not just about money. I am telling you. If you want to commit process improvement to cut your short term costs, then think again. You may be wasting your time and money. Process improvement is rather somehow holistic and paradigm changing process. It requires cultural change of your business possibly with lots of resistance from your people. You may face a situation being questioned by your people for your leadership not leading them to the profitable way of business. I know this may sound harsh and unfair but it is the process you step on first. Think about your value and real motivation for process improvement for a while. Is it really for short term cost cutting? No. I mean really. It is to improve your entire business process for better quality of goods or services and delivering the goods and services on time with far better utilisation of resources including the one from human. What is better utilisation then? I can tell you now. Better utilisation of resource means that you put your resources into more value creating jobs NOT non-value creating jobs. Non-value added jobs are divided into two categories. First, the pure waste. Pure waste is the real enemy of business in terms of process improvement. That is why we put a lot of effort to ‘waste elimination’. The other one is non-value added but necessary for business running. This must be minimised through automation or outsourcing if it is too expensive doing in-house.
We see a lot of wastes in general business processes. Most duplicated works are waste. Rectification or warranty works are wastes. Then what do we do? Do we have to ignore our customers’ call for warranty claims? No. you can’t. But at least you can reduce the claim by applying quality control measures in your business process. Toyota did successfully years ago (let’s not talk about recent quality issue at Toyota. A lot of Lean management professionals are busy to write their own thinking about it now), and many service organisation like hospitals and councils too! But remember they took years to change their organisation’s culture before tasting the result of process improvement.
Process improvement delivers you a delicious fruit ONLY when you overcome the impatience on profit figure and resistance of your people about the cultural change. Be motivated yourself first. Then your people will follow you. Value changing will lead to change in people’s belief and eventually behavioural change. Once people start to change their value, belief and behaviour, then you will see the great benefits of process improvement. Your services and quality of goods will be far better than now with fewer rectifications, you will have more man hours without increasing number of people, and eventually you will be successful in your business.
