Mini-Course Day 7: “Fast Start to Systems Thinking”
You have designed a business system, acquired all the components, and implemented it into your operations. Now you are interested in the quality of the product or service that your system produces.
The output of a process may move to the end-user or consumer, or to the next step in a workshop or office production-path. In either case, the receiving party is the “customer,” and your system output must meet their specifications and expectations.
The customer’s idea of quality may take different forms. For example, does the product or service meet their technical specifications? Is the workmanship acceptable? Does the product function as promised? Was it delivered on time? Did the customer have a good buying experience? In short, does the product or service meet or exceed customer expectations in every way?
Any quality considerations that are critical to the customer must be critical to you, or the customer will take their business elsewhere.
What are the Quality Standards for Your Business Systems?
More specifically, quality refers to the “yield” of any business system or process—how many times the output meets the quality standards, or conversely, how many people or system mistakes cause rejects, waste, and rework.
Since the products and services produced by business systems aren’t “perfect,” certain tolerances are acceptable to the customer and fall within standards. For example, a local furniture company tells the customer they will deliver between 8:00 a.m. and 10:00 a.m. Anywhere in that range is a success. Delivery outside the promised time is a failure to meet the standard. System results are either acceptable, or not, and quality is usually easy to measure.
As I mentioned earlier, business systems with high quality or high yield have lower costs. Everything you do to improve your business systems and processes comes down to removing defects and delays—the waste of the business that drives away customers and steals profit.
| “The most dangerous kind of waste is the waste we do not recognize” (Shigeo Shingo, industrial engineer). |
A typical small business like yours produces about 3% waste in its business processes. At first, this may seem reasonable. However, this level of waste—much of which goes undetected—is what prevents many small-business owners from achieving healthy profit margins.
For example, a business has annual sales of one million dollars. Three percent (3%) of sales are attributed to the waste of time and materials throughout all the business operations. This loss of $30,000 comes directly off the bottom line! If the business in this example is striving for an 8% profit margin, or $80,000, the 3% waste amounts to nearly 40% of the profit. In other words, $30,000 of the possible $80,000 profit is lost. A seemingly small waste-factor of 3% robs the business of a large portion of its profits. Many small businesses have much more than 3% waste, and this is a major reason for failure.
Small-business processes—in the workshop, the store, the office, or the factory—with a 99% yield, or 1% waste, are not only achievable but also essential in a competitive marketplace.
Continually Seek Quality Improvement
There are many opportunities to improve quality in your business—defects and delays are everywhere. However, it would be a daunting task to correct every mistake in every business process. In fact, no one has ever done it. Nevertheless, it is essential that you improve process-quality wherever it adversely affects customer satisfaction, profitability, or growth.
Stunning improvements can be made in a short period of time!
The Box Theory™ Way incorporates a powerful method called “Six Sigma” for identifying quality problems and achieving high-performance results—defects of less than 1%.
Begin building your bottom line today by minimizing waste and maximizing the yield of your core business systems and processes. Learn how to get your waste to under 1% with the Box Theory™eCourse, and then do it using the Six Sigma and other quality-control tools in Box Theory™ Gold software.
The time is right, and the price is right (NOW FREE)! One idea from the Box Theory™ Business Systems Academy can quickly put more money in your pocket. Dramatic financial results are common!
Tomorrow we will discuss another characteristic of high-performance systems. Like a diamond, this powerful principle has many faces, and you will find it to be of great worth!
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Mini-Course, “Fast-Start to Systems Thinking”
