Detection of improvement opportunities

Undoubtedly, the most successful companies today are not satisfied with remaining on time. They aspire to achieve a more transcendent goal, surpassing the success obtained with new challenges that bring out the best of them in their maximum expression and let the world know it.

<<< Continuous improvement with Lean + Six Sigma + TOC >>>

Sometimes the road will not be easy because there will be twists and turns, good results, and others not so good, and perhaps bad decisions will endanger a business, but even from mistakes we can also identify opportunities for improvement.

That is why the objective of this article is, from the identification and analysis of problems, to help you get improvement opportunities so that your company can grow by producing significant changes.

Whether you have an important company or a growing SME, when looking for improvement opportunities, you must take into account these 6 steps to carry out the process.

1. Identify a problem.
2. Analyze the situation.
3. Detect improvement opportunities.
4. Assess the impact.
5. Prioritize the needs.
6. Implement. 
   
   

1. Identify a problem.

It is the initial step and the most difficult because it implies assuming that your company has a problem and you must face it if you do not want to run the risk that the same problem (which can perfectly well be a symptom) acquires greater dimensions and becomes a kind of unstoppable snowball.

To detect a problem, there must be formalized processes that reveal it at some stage of the process. Any problem means a delay in terms, less effective results, loss of productivity, and also hidden expenses when its long-term effects are minimized.

There are several methods for easy identification of problems. One of the most effective and used is the Ishikawa diagram. Next, we will tell you what it is about.

Ishikawa diagram. 

Also called fishbone diagrams or cause-and-effect diagrams, consists of a graphic representation of a kind of fishbone, whose relational structure shows the different phases of a problem to be analyzed. It represents the cause and effect relationships between the several variables involved in a process.

In general systems theory, a causal diagram graphically shows the inputs or inputs, the process, and the outputs or outputs of a system (cause-effect) with their respective feedback for the control system.

The Ishikawa diagram is most often constructed using the 5 factors, major groups of influencing factors.

• Medium. It refers to the environmental conditions that influence the process, such as time, temperature, humidity, or cleanliness.
• Manpower. Anyone involved in the process throughout the production chain, including all support functions.
• Method. It defines how the process is carried out and what requirements are needed for it, such as quality procedures, work orders, work instructions, or drawings.
• Machine. All machines and the necessary equipment to perform the task, including tools.
• Material. The raw materials, the purchased parts, and assemblies that go into the final product.
  
  

2. Analyze the situation.

Once you have identified the root problem, it is time to move on to the second stage in detecting opportunities for improvement. We refer to the analysis of the situation.

What has caused the problem and what could be the consequences in the short, medium, and long term if action is not taken immediately? What actions can we take to solve the problem? What are our options or alternatives? What will be the cost to find a solution? These are some of the questions that must be answered during the analysis to move on to the next stage.

For example, a delayed project. Why is it delayed? Do you lack resources to continue? Is there an absence of employees to carry out the project? Is the plan not executable?

3. Detect improvement opportunities.

They usually say that opportunities arise from crises, that is why the key to an opportunity for improvement can be found in the identification and analysis of problems. In this sense, discovering a problem can help you not only to find solutions for that problem but also to understand hidden needs that can add value to your company by optimizing all your processes.

An example of opportunities for improvement could be the following: you have a website for your company in Spanish, so you attract potential customers from Latin America, but suddenly, many of the countries where you have customers entered a financial crisis and stopped buying your products or services.

So one solution could be to translate your website into English to attract customers from an English-speaking market. The opportunity for improvement would be the feedback that you will be able to establish with first-world countries, which will not only increase the profitability of your company but will also make it known in the market. It will allow you to broaden your horizons and grow.

<<< Deming Wheel: What is it and how does it contribute to your company? >>>

4. Assess the impact.

You reach a stage in which you have already discovered opportunities for improvement based on the identification of a problem and its respective analysis, but you have not yet implemented any measure, because first, it is necessary to evaluate the impact that its implementation would have.

Going back to the example of the website in English: the impact of such a transformation implies a significant investment in qualified personnel to adapt the site to the new language and maintain it over time.

5. Prioritize the needs.

Based on the impact that the opportunities for improvement could have, you will have to prioritize the needs to establish a parameter of achievable objectives to be attained in a given time. One tool that can help you prioritize is the Kaiser method.

Kaizen method.

The Kaizen method constitutes a cycle of continuous improvement and its key objective is to eliminate activities that do not add value to the production chain. This management tool has enormous potential to improve the productivity of companies.

It is based on an ancient philosophy that seeks to produce sustainable changes over time, in such a way that small improvements are generated every day so that, in the end, the objectives we pursue are achieved. In a few words, it is about small improvements that can be done every day to obtain a big change in a short time.

The Kaizen method is governed by the principle that a series of continuous improvement events is superior and more effective than a single large change. To achieve this, you must focus on your daily work, optimizing time in your workflows, separating what is important from what is not so important.

6. Implement.

The last stage in the management of improvement opportunities corresponds to the implementation of the improvement itself. In this instance, the problem was identified, analyzed, an opportunity was discovered that was evaluated and the priorities on which to focus were taken into account to make the final decision to implement the solution and improvement.

Generally, in the implementation, technologies are used for the management of processes to make them more efficient. Consequently, if you have more efficient processes, it will be easier to manage improvement opportunities for your company in a relatively short period.

Among the tools that you can implement to guarantee continuous improvement, the WCM management system stands out, which can offer benefits to all the areas of your company.

WCM System.

WCM is a management system that includes all manufacturing processes (quality, maintenance, administration, costs, logistics, etc.), defined to increase the performance of companies and standardize it worldwide, with a strong focus on cost reduction.

The objective of this management system is to constantly attack, reduce and eliminate significant losses, generate savings, improve cash flow, and optimize processes and results.

<<<ISO 9001 Certification: Its consequences in the continuous improvement of processes>>>

There are many more improvement opportunity management tools and methodologies. Here, we only made an outline of the most important ones and the stages in which you can apply them. In any case, do not forget that whenever there is a problem, no matter how difficult it may seem to solve, there is an opportunity waiting to take you to the top.