Death by a Thousand Cuts

By not regularly reviewing and assessing your processes, you can slowly kill your business

There are certain things we just know we need to do, like going to the dentist twice a year, or having your vehicle serviced regularly. You also know that if you put it off, or just don’t do it at all, the consequences are inevitably more painful and much more expensive. The same can be said about checking on your processes.The first step is, of course, having processes in place and having these mapped. If you are not sure why this is important, please see this article. This, though, is not enough. You must also ensure that the mapped processes are a true reflection of what is happening in your business.So what happens if your processes are drawn up, but languishing in a drawer somewhere, never properly put in place, and never reviewed?Well, your business will suffer death by a thousand cuts.  You may think you have the process in place but, through various means, little changes will have crept in. Each of these small changes does one of two things: makes the process more efficient, or introduces an inefficiency –  a tiny cut, if you will. If it is the first, great, you just need to update your documentation to reflect your now more efficient process. Unfortunately, it is much more likely to be the second.An example of this could be that staff do not always check the batch number of new stock coming in. This could lead to stock being returned by your customer, or stock aging, which means it needs to be written off.These tiny changes become bad habits, which snowball into other inefficacies. A new person may be brought on and, instead of learning the correct process, they take on their predecessor’s bad habits instead. Or, maybe, the process is no longer in line with requirements. This may be because skills, requirements, or technology has changed.So what can you do to counteract this?

Training

The first step is to ensure that during the process training, employees are aware not only of the steps of the process, but also why each step is important. This can prevent steps being skipped and other shortcuts.The second step is to ensure employees understand the up- and downstream processes. This way they can gain a better understanding of their importance in the supply chain. It can also aid their understanding of why each step is important.Finally, training is not a case of once and done. Training should be repeated on a regular basis. This means that the training needs to be reviewed, as often as annually, depending on the nature of the process.

Process Reviews

First, ensure employees’ knowledge is tested, after they have completed their training. This could be as simple as a quick question and answer session, or a practical test on training equipment.The next step is to regularly assess the process. There are four ways this should be done:

1. Walk the floor – management, from executives to supervisors, should be seen on the floor regularly. This way things can be picked up fast. It also shows employees that management is interested and invested in what they are doing.
2. Peer reviews – this is where a peer, someone who has the same or a similar job, observes the process, by shadowing the operator.
3. Internal audits – these are formal reviews, where someone outside of the department goes through the process.
4. External audits – this is a requirement for certain certifications, such as ISO, and several audit and consulting firms offer this service.

In each case, the observer should have a copy of the process flow at hand. They should note down their observations, which should lead to recommended corrective and/or preventative actions.Other benefits of doing regular process reviews include having a fresh pair of eyes, which can easily spot inefficiencies, and peers exchanging knowledge and advice.

Process Assessments

The best way to assess your processes, beyond reviews, is to measure them. This means checking process results, trending these results, and having in-process checks. It also means closing the loop on your processes.To illustrate this, let’s look at the forecasting process. One of the in-process checks would be ensuring the forecast is submitted in time. The process results would to be to check the sales vs. forecast, commonly referred to as the forecast accuracy. Trending the forecast accuracy will show whether you are improving or not. For more information about key performance indicators, see this or this article.What may start as a couple of cents being lost here and there, can go from a drip to a constant leak, and end up as a flood of money pouring out of your business. The only way to prevent and manage this is with robust processes in place, that are regularly assessed and reviewed.