|
Turning
Points
By Tom Pryor
 U.S.
News & World Report magazine named Dr. W. Edwards Deming as one of
the "nine hidden turning points in history" [1], along
with the birth control pill and the Apostle Paul.
Dr.
Deming, considered the father of Total Quality Management, proved statistically...
getting the first 15% of a process correct, ensures at least 85% of your
desired outcome. Deming's finding is especially important to people living
in a hectic world with limited time to achieve meaningful improvement.
Three
recent examples provide a good depiction of the importance and impact
of focusing on the first 15% of a process:
- A
Good Plan... For Texas-based home builder Tommy Goff, starting
at 6 a.m. Monday with a well-prepared process plan was mission critical
to winning a $100,000 wager. Goff bet friends that he could build two
homes from ground up in 96 hours. If finished by 6 a.m. Friday, Goff's
friends agreed to pay the Make-A-Wish Foundation $100,000. If the homes
were not ready for move-in by the deadline, Goff would pay the charity.
Goff's ambitious process plan worked. "The Sears representative
was giving us a hard time, so we scheduled him to install the appliances
at 2 a.m." [2] he laughed.
When
asked about the quality of the 96-hour homes, Goff replied, "They're
built like all the other houses, except we had a lot of people doing
it."
-
A Good Start... A recent
Activity Based Management study ICMS completed for a home healthcare
provider found significant dollars spent on the non-value activity "Resolve
Problems". During his search for the root cause of the waste, the
business owner found the beginning of the Order Fulfillment Process
repeating intake errors, i.e., wrong social security number, wrong address,
wrong Medicare codes, etc. Because customer orders flowing out of Customer
Service cause a series of activities to be performed in the Warehouse,
Delivery, Billing and other service departments, mistakes proved costly.
The business owner met with Customer Service employees weekly to mistake-proof
the process. An average of 400 errors per week soon dropped to 100,
resulting in fewer FTE's per order, improved profit margins and better
cash flow.
"Operational
innovation may appear unglamorous or unfamiliar to many executives,
but it is the only lasting basis for superior performance."
[3]
-
A Good Riddance... Getting
rid of outdated policies and procedures that guide and govern a process
can have a significant impact, including cross-country flights. Every
on-time departure begins with a plane and a crew. But for American Airlines,
planes all too often sit at the gate without the assigned pilots or
flight attendants connecting from another aircraft. American recently
announced a change to the takeoff of flights. Pilots and flight attendants
will now be assigned to a single plane all day rather than moving among
multiple aircraft. "We're trying to make one flight less dependent
on another to minimize disruptions and be more cost-effective."
[4] Unlike life, in business horizontal wins and vertical loses. American's
management of processes instead of functions will result in rewards
for the company and its customers.
Notorious
conversions always grab public attention. That's one reason why the Apostle
Paul is on the list of historical turning points. On the road to Damascus,
Paul was transformed from a sinner to a saint who then wrote a majority
of the New Testament, started churches and mentored leaders.
Do
you or your organization need a Damascus Road transformation? Focus on
the first 15% of your day, the first 15% of your processes and the top
15% of your customers. The results may be a turning point in history.
[1]
U.S. News & World Report, April 22, 1991
[2] Fort Worth Star-Telegram, "Home-builder wins a bet", Jane
Holleman, June 11, 2004
[3] "How
Operational Innovation Can Transform Your Company", Michael
Hammer, Harvard Business Review, April 2004
[4] Fort Worth Star-Telegram, "American hopes test will bring savings",
Trebor Banstetter, June 11, 2004
Please
send your comments or questions to TomPryor@ICMS.net.
For more ideas for turning around your organization or to talk to an expert
on Activity Based Management (ABM), please call ICMS, Inc. at 817-475-2945.
E-mail
a friend this article:
This
free e-mail is a service of ICMS, Inc.
Read
other ABM articles
|
