Most companies have continuous improvement initiatives ongoing at any given time. There are a variety of continuous improvement methodologies used such as Kaizen, Six Sigma, Lean and Total Quality Management that all have similarities. One of the common improvement models is PDCA:
- Plan : Identify an opportunity and plan for change.
- Do: Implement the change on a small scale.
- Check : Use data to analyze the results of the change and determine whether it made a difference.
- Act : If the change was successful, implement it on a wider scale and continuously assess your results. If the change did not work, begin the cycle again.
Of the 4 steps, the one we continue to see companies have challenges with is Check. Collecting the data, compiling and transforming it into useful measurements can be complex and overwhelming. Most organizations will use observations, time studies and spreadsheets to evaluate the results from the changes. This can work, but it is very labor intensive and difficult to maintain on an ongoing basis.
In the next series of blogs, we will show you how you can use the Easy Metrics to measure and enable your continuous improvement initiatives and identify areas for improvement.
Easy Metrics can be integrated with quickly and easily with your work flow data and provide objective cost and performance metrics on all the processes in your operation tracked by your data systems. For the following work environments, we integrate with these work flow systems:
- Warehousing/Distribution – Timeclock data, WMS data (transaction file), WES Data.
- Manufacturing – Timeclock data, MRP data, MES data.
- Customer Service – Timeclock data, CRM data.
- Transportation – Timeclock data, TMS data
From these data sets, Easy Metrics is able to show you the time spent on each process, the associated metrics for each process (example: picking – cases, locations, eaches, lines, travel, pallets, etc.), and the cost per unit to perform each process. Additionally, Easy Metrics will show you your non productive time, missing time (variance between time paid per the time clock and the time tracked in your work flow data), and cost for each. Qualitative data can also be integrated if available.
When you measure a process, cost is the most objective measurement to set as a baseline and hold yourself accountable to. As improvements are made, cost should go down.
When we work with companies on continuous improvement, we use cost per unit for each process as the baseline measurement. The specific process metrics and labor standards then are used by the company to optimize and affect change. That change then rolls back up into the cost metric, and if successful, reduces cost.
Easy Metrics takes a holistic approach and provides measurements for all cost centers. One common problem we encounter is companies will focus on a specific process to improve but then lose sight of the big picture. An example is to focus solely on productivity metrics without looking at the time and cost spent on non productive work and missing time. If you do not track the latter, you may see your productivity improve on direct labor processes, but that labor savings then bleeds over to the indirect labor processes and no true cost savings are achieved.
One of our clients, Fedex Genco, incorporated the above approach using Easy Metrics and our partner Raymond iWarehouse to achieve substantial cost savings with their continuous improvement initiatives at their Xerox facility.
Over the next month we will go into greater specifics on how to executed on continuous improvement, identify areas for change, and measure on an ongoing basis the success of your initiatives.