- February 5, 2021
- Posted by: marciadwilliams
- Categories: Digital Transformation, Supply Chain
Are you feeling the pain? A yes answer could be great. For example, when you are working out, feeling some pain means that your body is obtaining results. If you are feeling pain in your business, it could mean that you are growing, and growth is good. Regardless of organic or acquisition growth, you have new opportunities in front of you. In order to make the most of such opportunities and continue growing, you will need to identify ways to reduce the growing pains and make it sustainable.
Defining Your Problem Before Looking At Options
Where do you start? There are so many options out there, so many different paths you could take that you, as a leader in your organization or business, might feel overwhelmed or confused. The Paradox of Choice addresses this seemingly counterintuitive response to variety. This theory by psychologist and author Barry Schwartz indicates that too many choices limit a person’s freedom.
Nailing Your Objective And Measuring Your Baseline
To avoid or reduce this confusion, start by defining your objective in a specific way. For example, to increase the number of disinfecting wipes produced by 10% in 90 days, while maintaining high-quality standards. Note that there are percentages in your objective. It is not enough to indicate that you would like to increase the number of disinfecting wipes.
Once you have a precise definition of your objective or the issue that you are going to address, you will need to have a measurement system. After all, how are you going to know you have improved if you can’t measure the growth? Or if each time you measure, you get different results? To evaluate progress, you need a measurement system with reproducibility and replicability, meaning that different operators would arrive at the same number of disinfecting wipes and that regardless of the moment, the operators would get the same number of wipes. With a solid measurement system in place, you can now define your baseline. You know how many disinfecting wipes you currently produce, no matter who is measuring it or when.
Have you noticed that you haven’t looked at the options offered yet? Is it time now? Not before you map out your processes with key steps, inputs and outputs. You might feel some frustration when you read or hear about process mapping. You are also probably wondering if all that work is worthwhile. It is if you want to avoid burning your money. When you get to the exercise of building a process map, it is important to include as many inputs or variables as possible. For instance, all the resources involved, including raw materials, labor, systems and spreadsheets.
The funneling effect is a process in which by applying different tools, you prioritize the key variables or inputs and then laser focus on them to define improvements. Let’s continue with our disinfecting wipes example to see how this works in practice. Some of the variables to consider are the raw materials such as the kind of nonwovens, liquid and type of packaging, among many other variables that are part of the production process of wipes, which includes cutting and sealing machines as well as the forecast and planning systems.
By analyzing the impact of each variable on your objective, you go through a funneling effect. You start with many and then only focus on the few that have the highest impact. Why would you add more sophisticated machines with a higher throughput rate when there are availability issues with canisters? This would not have the intended impact on achieving your objective. To avoid wasting resources, it is fundamental to identify the key variables with the highest impact on the challenge you are solving.
Looking At Options
Once you have prioritized your variables, you can analyze the different options available. In our example, you wouldn’t purchase or upgrade technology that is not needed; instead, you could identify ways to shorten the lead time of the canisters with new suppliers or change the packaging from canisters to flatpacks. Once you have selected an option to pursue, you can measure to determine if your objective has been accomplished. How does the new production volume compare against the baseline? If it meets your defined objective, it is time to ensure that the improvement achieved continues over time with a solid control plan in place.
DMAIC To Keep Scaling
This data-driven approach also helps solve the issues that prevent you from scaling by focusing on the key variables that have the largest impact on your operations’ growth. By following this DMAIC process — define, measure, analyze, improve and control — in the Six Sigma methodology, you can scale your business without burning your money. Ready to start scaling?