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Continuous Improvement Programs: Reducing Discrete Manufacturers’ Stress

 

Continuous Improvement Programs: Reducing Discrete Manufacturers’ Stress


Dec 12, 2017
Manufacturing and Distribution

Continuous Improvement
Manufacturers of all sizes are being pressed to identify ways to improve efficiency and agility, two critical elements in the battle to grow profitability and competitiveness; they’re also focused on developing the processes that allow them to deliver on customers’ evolving demands. To these ends, many are realizing that overall operational excellence—optimum quality in all areas of the business, including processes, people, and products—must be made a company-wide priority. One of the best ways to achieve this kind of operational excellence is by leveraging the power of an enterprise resource management (ERP) solution.

Today’s manufacturing customers expect quality products supported by greater responsiveness, faster order fulfillment, a range of customization, predictive maintenance programs, and more. All this is pushing manufacturers to quickly evolve into agile entities that can design, build, and ship products quickly—products that are in line with their changing needs and expectations. But satisfying customers doesn’t stop there; once a product is delivered, follow-up, issue resolution, and loyalty-building are critical to ensure the next order. For manufacturers, continued satisfaction also means offering “smart” products that relay performance metrics back to the manufacturer, allowing for proactive maintenance and ongoing product improvement.

Achieving this level of agility isn’t easy. It requires a strategic foundation, investment in equipment and infrastructure, the development of new products and processes, workforce training, the incorporation of digitized systems and processes, and more. One underlying goal must guide execution of each facet of agile transformation: exceptional quality. 

A recent report published by Forbes, “The Rising Economic Power of Quality: How Quality Ensures Growth and Enhances Profitability,” shows that organizations that have established continuous improvement programs (sometimes referred to as “excellence” programs) are more likely to engage their workforces, partners, and customers in the continuous improvement of their products and services. And, as a result, these organizations see an increase in revenues and a boost in their bottom lines. The study goes on to conclude that a company-wide focus on quality is responsible for repeat business because the value of the products and/or services these companies offer is of greater value to the customer. 
                
What Can a Continuous Improvement Program Do for You?

The Forbes study concluded that:

  • Quality has a direct impact on profit growth.
    The research shows a direct connection between the success of continuous improvement initiatives and the success of organizations as a whole. Organizations that establish and put focused efforts into continuous improvement programs are more likely to see higher levels of productivity than those ignoring their programs. Gains from quality initiatives are seen in operations, customer service, and production, all of which lead to increased customer growth and sales, and gains in efficiency. 
  • Lack of workforce preparedness and outdated processes are the greatest quality issues faced by organizations.
    When workers aren’t properly trained and the processes being used are not designed for efficiency, productivity dips—and when productivity dips, profitability suffers. Despite their impact on quality, the amount of time spent dealing with quality issues is rising.
  • A spirit of collaboration and open communication is more essential to quality success than other initiatives.
    Everyone involved in manufacturing a product or providing a service must feel free to speak up when issues arise and have the ability to offer suggestions for improvements. Surprisingly, this is one of the most powerful contributors to quality improvement. 
  • Quality measurement is widespread, but more data is needed.
    The ability to obtain the right data at the right time is a continuing struggle for many organizations. Accurate, accessible data from across the organization and its supply chain are imperative for any continuing improvement. What gets measured gets improved.

  • Digital transformation means new ways to approach quality.
    Implementing Internet of Things (IoT) capabilities that allow machines to talk with one another and with humans makes agility and quality more possible, and easier to measure and report. 

This last bullet is an especially important component of any continuous improvement initiative because digital capabilities are key to pinpointing and understanding the weaknesses in your products, processes, and people. The best way to get a global, real-time view of the performance of all facets of the company—from HR and Sales to Warehousing, Inventory, Operations, Transportation, and Customer Service—is by implementing an ERP system

Data generated by equipment and systems in your organization quickly reveal weaknesses and guide appropriate resolution. As the saying goes, “What gets measured gets improved,” and knowing how you’re performing across the organization allows you to focus corrective efforts and achieve the quality that will lead to greater profitability.  

To help you better understand the links connecting data, insights, and improvement, here a few of the articles we’ve written about the capabilities of an ERP system:

Author(s)

Suzanne Koss
Suzanne Koss, CPIM
Partner
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