Like a lot of entrepreneurs, you may suspect that there are inefficiencies in your business if you're experiencing things like declining profits, difficulty meeting demand or even revenue losses.
The good news is that you can quickly boost productivity and profits with a three-step approach to operational efficiency.
- Benchmark your performance against other companies in your industry. You can do that by evaluating how well it's doing on key performance factors, and by calculating its value creation index (watch the video to get instructions), which measures how much value is being added inside the plant.
- Identify and eliminate waste by targeting issues like bottlenecks and poor production planning. You can start to eliminate waste by using the 5S approach: Sort, Shine, Straighten, Standardize and Sustain. It's also essential for supervisors to spend more time on the floor in order to provide better support to employees and to target opportunities for improvement.
- Monitor and manage performance by setting up dashboards and implementing daily team meetings.
Apply these 3 steps to create a culture of continuous improvement and you will soon start to see improvements in productivity, cost containment, employee morale and profitability.