Tag: goals

Customer Experience

Do you know what is the best thing you can do to achieve Customer Satisfaction?

If you have a business, then you know how important it is to know how much the customers like your service or product. They are the best source for learning about improvement opportunities, their ideas tell you what needs to be improved, and sometimes they even suggest solutions. You need to listen to the Voice of the Customer, if you and your team understand this, you won half of the battle, already.

I remember a situation years ago when one of our most important clients was complaining about a recurring problem. The plant was consistently delivering late, causing them problems with their customers. The root cause analysis pointed to the packaging department, where the team was encouraged to have larger runs. Their goal was to avoid changing products to minimize downtime.

In a different case, the warehouse team was ignoring the 360º inspection before shipping to save time. The customer was receiving products with defects. They wanted to achieve the goal of two hours trucks turn around. The problem with these two examples is that neither of those team leaders understood the relationship between what they do and customer satisfaction.

As a business owner, you need to ensure that your business strategy and goals are aligned. Your team must know the priorities. Encourage asking questions when they have doubts. Talked with them about customer expectations and how their work affects them.

The best thing you can do to achieve your customer satisfaction goals is to accept that your team is first. It has to be a priority for you to train and develop your people. Provide them with the tools and information they need to do their job and opportunities to learn more and grow. If the team feels appreciated, they will be your secret weapon to achieve success. When you take care of your team, they take care of the customers.

Standard Work

What is ​Standard Work?

You need to measure what you want to improve. A metric is a measurement you use to track and assess the condition of a process. It gives you information about how the process is working and provides a baseline for improvements. After each improvement cycle, the resulting value is the new goal for your process parameter.

You use the current value of a metric or process parameter to know whether the process meets the goal or it needs adjustment. For example, the safe internal temperature for cooked chicken is 165° Fahrenheit. That value is the process parameter goal. If at the end of the process the actual temperature is 165° or more, the chicken is safely cooked. If it is less than 165°, you need to adjust. In this case, you adjust the process by cooking the chicken a little longer until it reaches the goal. How do you get the expected results every time?

In this example, you have a recipe. That document states all the ingredients and the instructions to cook the chicken. It includes the oven temperature setting and a range of time to cook the chicken. Also, it includes the process parameter goal, the cooking temperature for the chicken. This goal is the standard, a target established by an authority as a measure of quantity, weight, value, or quality that will determine the success of the process.  If you follow those instructions, every time the chicken will be cooked and will taste about the same.

Standard Work (SW) is a simple written description to perform a task. SW is the safest, highest quality, and most efficient way to execute a particular task. Once you establish SW, it becomes the only acceptable way to do the process it describes. It contains the sequence of steps to complete the task, the rate at which products must be completed to meet customer demand, and the standard amount of work in process inventory.  The sequence of steps contains also vital information that can break or make the process, such as the process parameters, and their goals.

Update the standard work every time a process parameter or the steps change. Training for Supervisors and employees is critical to ensure everybody follows the standard. After training, it is time to improve again!

Business Performance

Metrics and KPIs, Do you know the difference?

Metrics and KPIs are not the same. How do you know if your business is successful? Do you use metrics? Or do you use key performance indicators? What is the difference between them?

Metrics and KPIs

A metric is a measurement you use to track and assess the condition of a process. These measures give you information about how the process is working and provide a baseline for improvements. KPI stands for a key performance indicator. It measures how well the business is doing against a goal. Key performance indicators are strategic, and metrics are tactical.

Example of what metrics and KPIs are

Let’s use the Yummy Broths restaurant that specializes in soups as an example. One process for Yummy is cooking a plate of chicken soup. To measure the status or condition of this plate, the owner can use the cost per plate, sales per day, or the quantity of the ingredients per batch. One goal for Yummy Broths is to increase the gross margin by 20% before the end of December 2020. The owner decided to track the cost of goods sold (COGS) as the KPI.

KPIs are metrics, but as the name indicates they are key metrics. Not everything is key, otherwise, nothing is. KPIs are like vital signs for the business. Metrics are tactical because they measure the daily business activities that support the accomplishment of the goals. The KPI will let you know If something is wrong, other metrics will help explain why.

The restaurant owner decided to increase profit by reducing the cost of goods sold rather than increasing revenues. The standard is 31% of the sales or less. When the COGS reaches 40%, Yummy Broths owner knows that something is wrong. He knows that for his business profitability, inventory cost is vital. One way to control it is by making sure cooks use the right amount of ingredients to prepare each recipe. Looking at the ingredients used, he realized that compared to the standard, the ingredients per batch are off. Cooks are using more quantity than the recipe asks for. Now he can take action to correct the performance against the goal. Meeting the ingredients per batch standard will support achieving the COGS.

Selection and follow-up

There are two critical things about KPIs, selection, and follow-up. Select indicators that aligned with the business objectives. Always look for the best way to measure the progress towards the goal. Also, since they are critical, monitor them weekly. Do not wait until the month-end because it will be too late to do something if you need it.

Now that you know the difference between metrics and KPIs, go check if you selected the right metrics to measure your business goals.

CI Basics

What is Continuous Improvement and why you need it?

Continuous Improvement is a business management system designed to create customer value with fewer resources.

Do you want to increase the net profit of your business? One way to do this is to reduce the operating expense. How do you do that? Where do you start? Have you ever considered a continuous improvement strategy?

What is continuous improvement?

You want to learn and practice Continuous Improvement (CI). CI or Lean is a business management system designed to create customer value with fewer resources. This system is a group of principles, best practices, and tools. Lean was born from the necessity to be more efficient and be able to operate with fewer resources. For that reason, it is the ideal tool to reduce costs.

Although CI was born from the necessity to become more efficient, it is not a cost reduction tool. It is a peoples’ system which means that the focus is to develop the team skills and help them grow. When you take care of your team treating them with respect and helping them to develop their skills and contribute they take care of your customers. Also, they will help you to improve processes and minimize costs.

Contrary to common perception, Lean or CI is not for manufacturing companies only. CI works in the office, retail, warehouse, mechanic shops, medical and other types of businesses.

How can it help you?

With CI tools, you can draw a map to see how the information or product flows in your business and identify inefficiencies or waste. Once you know the problem, you can start working on solutions. There are various mapping tools used to assess the process flow and identify waste. Some of them are value stream map, process map, and swim-lane map. Also, there are tools for housekeeping and organization, inventory control, and process standardization.

Do you want to reduce operating expenses? Do you want to start the year knowing what to do? Subscribe or follow this page to learn simple and effective process improvement solutions.