Technology is the new magic that many, if not most, businesses
try to invoke. We’ve become such fans because it can provide benefits like convenience, repeatability of result, reduction in the numbers of humans we need to complete a process, and space savings in our production facilities. But if you’re considering waving your financial wand to automate a process or take it electronic – stop and think before you throw bundles of technology money at it.
Consider this case study – a company sold ad specialties, and among their most popular items were custom embroidered jackets. The jackets sold well, but the company was concerned about the number of errors they were incurring during order entry, each of which had the potential to cost $50 or more per jacket. So they decided to “take so many people out of the process” and computerize it.
Unfortunately, the result of automation was that they made the same errors, only they did so 7-10 times faster! Their costs associated with order entry errors grew to 7-10 times higher. The automation effort was a bust because they didn’t improve the process first – they just sped it up.
Even if you’re not looking at technology-related solutions you would be well-advised to take a closer look at processes in your business that
- Contain a lot of interpersonal hand-offs
- Consume a lot of cost in people, materials and/or time
- Cross from one department to another
- Are high in volume
- Are high in risk
- Have received customer complaints
- Involve a lot of rework
- Are processes that you’re considering automating as part of your improvement efforts.
Production processes are not the only fair game for process overhaul. How much more cash would you have available for operations if your billing and accounts receivable collection were more effective? How much more market share would you enjoy if your new product development and launch processes enabled you to be the first entry into the market with innovation?
It’s not just about what the people are doing and whether they’re doing it fast and accurately enough. You need to know the answers to questions like:
- Are the right people involved in the process?
- Are there too many people involved in the process?
- Do we have measurements to validate how well the process is working?
- Does the process involve too many steps?
- What do the materials in the process do?
To be blunt about it, if you throw technology money at your process without improving it first you’re likely to hear a giant flushing sound in your head later. That will be the sound of your investment dollars going down the you-know-what.