Standardized Operations and Process Improvement

Improving company operations through systemization and standardization should become a core competency of any organization. This involves creating documented “best practices” employees are expected to adopt, and then working with employees to constantly improve those “best practices.” One should work to build an organization that learns and improves over time. This is the type of organization that can grow profitability faster than the natural erosion inherent in maturing markets (see Chapter 5 on Maturing Markets). Even if a market is not mature yet, reducing waste, and focusing on value-adding activities can always enhance the bottom line.

Employees can be resistant to this kind of standardization, and standardized processes tend to slip back to non-standard operations if standards are not enforced. Because of this, standardizing processes does not work without the total support of the entire management team. Companies that successfully standardize (and make the other cultural changes discussed in this book) generally lose around 1/3 of their workforce, and some of the people who leave are invariably people companies do not want to let go. Companies must be willing to let go those who are not onboard with standardization. Companies must also be willing to fire with cause any employees who work against what will become the new cultural norms.

Standardized operations are operations that are done the same way, every time, regardless of who is doing them. Once operations are standardized, they can be improved upon, particularly if critical measurements (see the chapter on Statistics Based Management) exist to measure changes against.

Many question the level to which operations must be standardized. Frankly, it depends on the operation. On a manufacturing floor, line workers can standardize what they do to a very granular level. Small things like turning the wrist 45 degrees after grasping a tool, can make a difference in cycle times, quality, the comfort and safety of the worker, and a host of other issues. In other parts of the company, such as in the office, natural variance may make it more difficult to standardize to the same degree as on the plant floor, but it can be done.

Luckily, the quality and granularity of standards can be improved over time. Workers should, in fact, be encouraged to constantly look at standards and ask how they can be improved, and there should be rewards for those who come up with changes that show measurable improvements.

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