The Efficient Organization
The 97 Percent Solution
Deming, the father of the "quality movement," said that 97 percent of
what happens to organizations is predictable and is caused by the
"system," not the person. It is reasonable to presume, then, that an
organization should be able to plan for and manage 97 percent of its
operations. This includes waste in areas such as overproduction, delays,
unnecessary transportation, too much inventory, defective products,
defective design, complicated processes, outdated equipment, and poorly
much of your organization's time, money, people, systems, processes,
and technology, is adding value to your organization's product(s) or
service(s)? If your answer is less than 100 percent in any area, then
your organization is not running an efficient operation nor is it as
profitable as it can be. By eliminating activities or resources that do
not add value to the bottom line, an organization can achieve
measurable, immediate and sustainable results.
help your organization become more efficient and help grow business
quickly and cost-effectively, eliminate waste using the following steps.
your current situation. Set the standards that your organization needs
to attain by measuring your organization's performance and comparing it
to similar companies and to industry best practices.
and optimize business processes. Use diagrams and flowcharts to
visualize problem areas. By removing business barriers such as silos,
improvements can be immediate in information sharing and decision making
across the organization.
existing assets. Technology changes rapidly and your organization needs
to keep up if it is to remain competitive. Determine the overall
effectiveness of your equipment and reduce its changeover time and
downtime to remain efficient.
An organized, clean, and well-maintained workplace can help reduce and
eliminate product and service delays. A visually well-organized
workplace also packs a tremendous positive psychological boost for a
happier workforce. (If your workforce isn't happy, it's a guarantee that
your customers are also not happy!).
Pursuit of Profit
to analysis conducted by Nokia Seimens, overall industry profits could
rise by 13 percent if all service providers operated at the same high
level of performance as the market leaders. If your organization is not a
high level performer, it is likely due to waste - wasted time,
materials, or money. Profitable organizations are putting the brakes on
are a few things an organization can do to increase its profits. It can
raise its prices for its products and services, it can sell more, or it
can lower its costs. In an increasingly competitive global market,
raising the selling price probably won't help unless you've already got a
top selling brand. Selling more is a possibility, but that creates a
lot of labour intensity and perhaps added marketing expense. The third
option, lowering costs is the best option. What this means is that the
organization becomes more efficient and effective by reducing waste and
saving money - directly leading to an increased bottom line.
profitable organization is a successful organization. Its success
depends on its efficiency (doing things right) and effectiveness (doing
the right things). If you believe that you can sacrifice one for the
other, consider the following.
- If your organization is inefficient and ineffective, the business will die quickly.
- If your organization is inefficient but effective, the business will survive.
- If your organization is efficient but ineffective, the business will die slowly.
- If your organization is efficient and effective, the business thrives.
Is your organization dying, surviving or thriving?
In My Humble Opinion (IMHO)
organization's waste production starts with each individual. Think
about it. How much paper do you recycle because of re-do's due to poor
planning or sloppy work? How much work is accumulating on your desk
right now because you're either overwhelmed (or underwhelmed)? If you
aren't helping manage your organizational waste, does this make you
underpaid or overpaid? Inefficient employees are overpaid. IMHO.
"Be a yardstick of quality. Some people aren't used to an environment where excellence is expected."
About MNC Consulting Group
Our goal is to help you to dramatically increase efficiencies that immediately boost your profit margins.
is a monthly electronic newsletter discussing how leaders can be more
efficient and areas where organizations can save more money.
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