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Experience Your Own Process and Challenge Those Who Operate It to Improve and Reduce Costs

Feb 1, 2008
When more speed is required, people are often shocked by how rapidly a process can be accomplished. Consider Dell Computer. The company will manufacture a single personal computer customized to order.

The customer goes online or calls a toll-free long distance number, places an order, and pays by credit card. As soon as the credit card charge is authorized, the order goes electronically into a Dell factory that has the appropriate parts in stock, and the work order is almost instantly placed in the work station queue that has the right parts and the shortest backlog.

At the same time, Dell's computers are alerting suppliers that those parts are going to be used soon and requests rapid replenishments. Assuming that no errors are made in assembly, a finished machine can be ready to go in its shipping container within two hours.

A logistics partner will arrange to pick up any other items (such as a monitor) the customer ordered from other Dell or Dell supplier locations and consolidate delivery to the customer on the same truck. In some cases, the computer and related gear arrive the following morning.

Most processes, unfortunately, don't operate like that. The step-by-step time to accomplish a task may be the same or less than Dell's process, but there are long delays between steps.

Here is a process that I heard about recently for making vehicle repairs in an aid organization operating in an underdeveloped country with rugged terrain. When a vehicle developed a problem, it sat in a garage until a mechanic had time to evaluate what might be needed.

If that diagnosis identified that a new part was required, an order was placed and a long wait began. By the time the part arrived (often weeks later), the mechanic may have forgotten that the vehicle needed that part . . . or no one may have let the mechanic know that the part had arrived. Once the repair began, it might turn out that yet another part was needed. Such a discovery caused the whole process to begin again. The organization found itself with a continual shortage of vehicles due to so many being gone for lengthy repair visits to the mechanic's garage.

Someone who didn't know the repair process decided that this was an opportunity to create a breakthrough solution for reducing the start-to-finish time required for these repairs. The new person met with those who worked with the process and spent a few hours with them walking through how the process was implemented. The outsider could soon see that most of the delay was in idle time when no repairs were occurring because a part was missing.

The outsider convened a meeting of those involved in the process and challenged them to cut the elapsed time for each repair by at least 96 percent. Within another few hours of mutual consultations, a few simple changes accomplished that improvement.

Who were the geniuses who figured out those helpful changes? Why, all those advances were suggested by those who worked with the ineffective process.

Here are some of the key adjustments:

-An analysis of past repairs showed that over 80 percent of repairs requiring long delays were on the highest mileage vehicles. By replacing vehicles before they reached that mileage, those repairs could be avoided and fleet availability could be 50 percent higher. Greater availability, in turn, meant that fewer vehicles would need to be purchased. With continuing economic analysis, an optimal trade-off could be made between earlier replacement of vehicles and making more repairs on higher mileage units.

-Recording what parts were on hand revealed that few parts needed to be ordered. The problem was that the person who ordered parts wasn't aware of what was on hand because there had been no physical organization of the inventory. Instead, parts were stacked up randomly. By analyzing the frequency of parts usage, it became possible to stock the parts needed for 90 percent of all repairs. This adjustment reduced the delays for needed repairs on newer vehicles.

-Most of the internal misunderstandings were caused by lack of communication among four individuals located in different parts of the compound. Putting in telephone links and computer records helped eliminate many of those problems. A clever card system used on the windshields of vehicles further aided in communicating and understanding what needed to be done to a particular vehicle.

-A preventive maintenance program also reduced delays by alerting the mechanic to the need for parts in many cases before the parts failed.

The successful improvements were well received by those in the process and those who relied on these repairs being made. The enthusiasm generated by the improvements led other operating areas to do similar reviews aiming to shrink time durations. The repair people also committed to regular upgrades of their process by reusing the meeting techniques that led to these large changes.

Why hadn't the repair organization improved sooner? No one had raised the question before of eliminating unnecessary delays. The potential solutions were there all of the time.

What breakthrough cost-reduction solutions are awaiting your attention?
About the Author
Donald Mitchell is an author of seven books including Adventures of an Optimist, The 2,000 Percent Squared Solution, The 2,000 Percent Solution, The 2,000 Percent Solution Workbook, The Irresistible Growth Enterprise, and The Ultimate Competitive Advantage. Read about creating breakthroughs through 2,000 percent solutions and receive tips by e-mail by registering for free at

http://www.2000percentsolution.com .
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