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No business owner wants to waste time and money, have frustrated employees, and risk customer relationships with mistakes and delays. But these things happen when businesses operate less efficiently than they could.
Sometimes this happens by default—for example, when managers and employees fail to actively look for better ways of doing things. Inefficiencies also result from a lack of follow-through, when areas for improvement are identified, but no one engages in the work necessary to make new ways of doing things a part of the daily routine. Some steps toward better efficiency require precious time and resources up front, while benefits aren’t realized immediately.
This is especially true for industries in which every project is unique, and processes are honed over years of trial and error. But there are actions that companies can take to improve workflow, quality, profitability, customer care and employee satisfaction. Here are seven steps to consider.
1. Ditch the paper, go digital
Written orders are a recipe for delays, mistakes and inefficiency. Time is wasted tracking down paper forms, and sloppy handwriting can result in mistakes and loss of profit. Digital processes, such as a digital order tracking system, can speed up production, improve efficiency and minimize mistakes.
2. Centralize information
Even if a business isn’t ready to dive into a digital order tracking system, it can take steps to become more efficient by keeping information in one place. This can be a spreadsheet or a whiteboard, either online or centrally located, that shows all jobs, what stage each job is at, and who’s responsible for what. This can eliminate a lot of “steps” to answer questions.
A centralized job tracking system like a whiteboard can help, but it only works if every single person keeps it up-to-date. No matter what system is adopted, following through and having everyone use it takes discipline. It can be hard to get employees to adapt to new ways of doing business.
3. Know job costs
Many company owners can’t accurately answer the question, “Did we make a profit on that job?” Many owners may know the cost of materials and have a general idea of employee hourly rates, but are less accurate when calculating indirect costs, such as taxes, insurance and other overhead. Getting a better understanding of those costs creates a clear picture, makes prioritizing and planning easier, and drives lasting efficiencies.
4. Do less
Limit the amount of work in progress to focus on the most profitable and enjoyable jobs and customers. One easy way to figure out where to focus is to make a list of projects/customers and rank them by revenue (or profit, see step 3) and how easy they are to work with. Limiting the number of jobs in progress will ensure that the jobs a company does take on are completed efficiently.
5. Educate and empower employees
A common issue for rental companies is the double-edged sword of high employee turnover and what’s sometimes referred to as “tribal knowledge”—expertise gained from years on the job. Employees who have it often guard the information, believing it creates job security and makes them more valuable to the business. However, the practice can negatively affect productivity and workflow. When someone goes on vacation or gets sick, it can slow things down and cause production problems.
Standardizing processes and having reference materials such as project and standards boards available allows new employees to get up and running quicker. And while some longtime employees may see this as a threat, most find that better processes and training make their job less stressful and more satisfying.
6. Reduce interruptions
Interruptions disrupt workflow far too often. A good centralized source of information and weekly or daily status meetings can help ensure everyone is on the same page. Beyond that, people need time to focus, a few hours each day when no one is allowed to interrupt and they can “batch” work. This is true for everyone in a business. Consider shutting a door, using headphones, or, better yet, having the company get behind the effort with steps such as posting signs that indicate when an individual or department is in “do not disturb” mode. Reserving time at the end of the day to organize the workspace, review what went well and what presented challenges, and make a list for the next day is also recommended.
7. Organize facilities
A clean, well-organized space is safer and more productive, be it a kitchen, warehouse or sewing room. It’s a concept few would argue with, but many find difficult to undertake and maintain. A methodology such as the Six Sigma 5S approach can be a relatively easy way to get started:
- Sort: Get rid of unneeded parts and supplies.
- Straighten: Organize remaining items for peak efficiency.
- Shine:Thoroughly clean the space.
- Standardize: Clearly label/color code everything.
- Sustain: Train, refine and stick with the system.
Laurie F. Junker is a freelance writer based in Minneapolis, Minn.
SIDEBAR: Job costing: an essential business strategy
Job costing is the process of assigning costs to a specific job or project to determine if it will generate enough gross profit to cover expenses and contribute to net profit. While managers often engage in job costing after a project is over, job costing at the beginning of a project will help ensure that you don’t accept work that doesn’t contribute to your bottom line.
For more information on job costing, visit www.intentsmag.com and enter “job costing” in the search bar.