Benefits of Improved Flow | Operational Excellence Quick Hits
Quick Hits share weekly tips and techniques on topics related to Operational Excellence. This week’s theme relates to the benefits of improved flow. We hope you enjoy the information presented!
Speaker 1: (00:05)
So we talk about achieving flow. We want to focus on the value activities from start to finish in the most effective manner. So we want to transition the organization from batch and queue processing to synchronous flow. So that results in quicker response to the customer, shorter lead times, and it improves customer satisfaction. There’s reduced work-in-process. So if you have cash tied up in materials, then we can improve cash position by reducing that work-in-process. It improves quality. So this is interesting. Every project that I’ve done, that I’ve worked on improving flow, the number of quality issues cut in half. So we did no initiatives on improving quality, we just improved flow and quality issues cut in half. Next is improved cash. So we talked about that earlier, that improving that information flow, improving the value added flow improves the cash. And if we can reduce the work-in-process, it’s a double win.
Speaker 1: (01:09)
Next is reduced costs. So our primary goal isn’t to reduce costs in companies, it’s to improve flow. But there’s so many situations where we get cost reduction benefits as a result of improved flow. Our overview for improving flow, the objective is to drive organizational effectiveness, not individual process efficiency. Improving flow means focusing on reducing or eliminating contributors to non-value added activities, don’t focus on reducing the value added time, change the mindset from cost reduction to improving flow, understand and communicate the benefits of improving flow, eliminate the metrics that induce cost reduction behaviors. I think we talked about that in the last session. How many of your metrics are cost reduction metrics versus improving flow metrics? And how many are looking forward versus looking backward? And then be great problem solvers to drive to the root cause of flow disruptions.