2 Foundations for Improving your Operations

As an operations manager, your responsibilities aren’t limited to just keeping things running. Whether you’re a post office manager, leading of a team of software developers, a production line supervisor, or a head chef in a busy restaurant; the role of “Operations Manager” must also make time for “improving” the operations of your organizations. Here are two essential foundations to upon which all operational improvements should be built.

How to improve your operations?

Designing, implementing and using a complete set of “Key Performance Indicators” and implementing “Visual Management” practices are two universally applicable foundations from which to go about improving your business operations.

Measuring key performance areas.

Before we can even consider improving an area of our operations such as quality, costs, or delivery, we have to first know our performance across each of these essential dimensions so we can have a clear picture of which dimension to focus on and be able to measure any improvement. This means having some performance metrics, at least one for each of the major dimensions of performance, such as a full set of KPIs (Key Performance Indicators), sometimes called a “Balance Scorecard”.

Taking an example, let’s imagine that you’re a post office manager and you’re interested in setting up some high-level KPIs. Here are some potential metrics you could track: 

  • Output: Number of letters that are sorted each week
  • Quality: Number of errors or returns
  • Delivery: Percentage of letters delivered on time
  • Costs Wage bill per week
  • Customer Satisfaction: Number of complaints per month
  • Safety: Number of injuries per month

You can’t improve something if you can’t measure it, and if you aren’t already measuring “all” the key dimensions of performance, you can’t really know if you are actually “improving” your overall operations or just “swapping” one area of performance for another. Just improving quality by spending more time and increasing costs isn’t really an improvement but rather a tradeoff. A quality improvement would mean seeing quality improve “whilst” costs, delivery, and output would remain at least constant.

Visual management

“Visual Management” is the process of creating systems to generate and present important information “visually”. Its goal is to communicate essential information quickly and effectively.

DISCOVER THE “FORGOTTEN FUNDAMENTALS” OF OPERATIONS MANAGEMENT”

Human beings are visual creatures, almost 90% of all the information we process is through our eyes. We can process images thousands of times faster than the equivalent text and we find it much easier to remember and act on visual information. Visual management uses this simple biological fact to create systems that generate and present important information visually.

Using the previous post-office example, having gone to all that effort to design and implement those KPI to get benefit from them, we need to share the knowledge and making them visual is a great start! Using visual management principles, our post office manager would be wise to actively and clearly present the KPIs to the full workforce using a mix of easy-to-read graphs or showing some of the real-time data up on a big screen.

Visual management’s goal is to show the situation and performance of all the essential areas of the operations instantly. Can you “see” how many essential inventory items are left in stock? Are your “work-in-progress” locations organized to make it easy to “see” how much work each work-station has queued up at each moment, making it much easier to balance the workflow?

In Agile management they love their Kanban boards, whose primary benefit is to enable the full team to “see” which processes are queued, in progress, or completed. Agile management aside, the ideas of visual management come especially from Lean manufacturing, and here are some of the great visual management tools that they use:

  • “Poke-Yoke” mistake-proofing
  • Kanban bins for inventory control (not to be confused with Agile’s Kanban “boards”)
  • KPI dashboards to visually present performance data
  • Using Color for clarity, organization and impact
  • Going to the Gemba to “see” problems and the current performance
  • Holding meetings around a big whiteboard with recent performance data presented and with space to communally draw out problems

Assessing your visual management practices

Here is the acid test for how well your operations are set up for “visual management”: Head to the center of action in your organization and imagine you are a manager from a “different” company. Look around your operations and try to gauge how performance is going just by “looking”. What can you see? Does it tell you if your important processes are performing well or not? 

If you could tell immediately, then you are well on your way to having a well-run visually-managed operation. On the other hand, if you can’t, then working on improving your visual management practices would be a very beneficial place to start.

So what were those foundations of improving your operations again?

Improving your business operations requires a strong base upon which to build. A good set of Key Performance Indicators for all key areas of operational performance in order to know your baseline, help select and track improvements and know you are truly “improving” and not simply making “trade-offs” is essential.

Secondly, using more “Visual Management” so everyone can “see” how things are working in real-time brings a level of clarity and simplicity to your operations. This quickly reveals problems and therefore key areas for required improvement.

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