When you can’t find employees – PROCESS IMPROVEMENT
I hear it all the time: “I can’t find employees,” or “I can’t find the right employees.” What do you do in a tight labor market? There is only one other alternative – improve efficiency and productivity. But how?
Every business has a process, or series of processes, for doing the work. Also, every business has inventory, even service providers: raw materials, work-in-process, and finished goods. Every manufacturing operation has these but what about a service business? Consider Bill Fletcher, President of Unisource Mortgage, a mortgage broker. His company gathers information from prospective clients about their mortgage needs and researches the optimal potential mortgage to fit the customer’s needs and financial capability. He then arranges for the necessary legal documents for the customer to sign. Finally, when all aspects of the mortgage are in place and documents are signed, he can close the file for that customer.
Does Bill have any raw materials, work in process, or finished goods? If you answered yes to all three you get an “A.” Bill’s raw material is the information gathered from the customer and potential lenders. What about Work-In-Process? When the work begins, Bill opens a file, both physically and digitally. That file contains pertinent information about this mortgage. From the time he gathers the information until he closes the mortgage that file is “In Process”. At any given time Bill will have numerous “Mortgages in Process.” In other words, he has an inventory of uncompleted mortgages categorized as “Work in process.” Finally, when the mortgage is ready for the customer to sign, Bill has “Finished Goods Inventory.”
To improve your processes you must identify each process and the steps taken to complete the process.
Why is it so important to improve our processes? Processes take time, and the more time consuming, the more costly. Reducing the amount of time to do the work will get the product or service to the customer sooner, which they will appreciate. Streamlining the process and eliminating unnecessary steps frees up employee and machine time to do more work delaying the need to hire more employees. Improving the process should also improve the quality of the product or service, leading to greater customer satisfaction, fewer returns. Efficient processes can prevent poor quality, thus minimizing the risk of lawsuits. More work in less time results in more revenue, profit and most importantly, cash flow.
How do you improve your processes?
Starts by identifying your processes and the components of the process using a SIPOC.
- SOURCE: What is the source of the raw materials (data or physical items)?
- INPUT: What are these raw materials (data or physical items)?
- PROCESS: How are the raw materials combined to make the product or service?
- OUTPUT: What is the product or service being provided to the customer and how are you going to get it to the customer (fulfillment)?
- CUSTOMER: Who is the customer?
Assume Bill’s mortgage process includes three documents. Each document is done by a different person. Suppose Document 1 takes 30 minutes, Document 2 takes 60 minutes and Document 3 takes 10 minutes. The entire process takes 100 minutes.
What is going to happen? Document 1’s are going to be piling up on the desk of the person preparing Document 2, while the person preparing Document 3 is sitting idle waiting for work. Document 2 is a bottleneck with the entire process getting bogged down. If the goal is to reduce the overall time from 100 minutes to 90 minutes, what should be changed? The processing time of Document 2 needs to be streamlined. Perhaps some of it could be prepared by the employee doing Document 3. Until you identify specific steps of your processes, you have no way to determine how to improve the process.
Most businesses have multiple processes going on simultaneously. Pick one and start working on improving it. When you’ve improved that process it will free up time to work on improving the next process. With some time, effort, and creativity you can reduce the need for more employees.
I hate working overtime unless it improves a process eliminating the need for future overtime.