‘Without continual growth and progress, such words as improvement, achievement, and success have no meaning’
Benjamin Franklin – one of the Founding Fathers of the USA
Against a background of continual distractions, including increasing regulations and competition, one of the greatest challenges for businesses is to continue improve their performance and profitability. Improved processes lead to better efficiencies, improved productivity, greater employee satisfaction and, ultimately, profits.
At its most basic level, there are four ways to improve productivity:
- Drive better practices
- Innovate new practices
- Utilise potential practices
- Enhance current practices
In Japan, following the devastation of World War II, the concept of ‘quality management’ was developed and implemented by an American – W. Edward Deming. He became known as the ‘father of quality management’ and his work led to the amazing success of Japanese companies such as Toyota, Sony and Mitsubishi. The ‘Deming management method’ became known as the Plan-Do-Study-Act (PDSA) cycle, which imbedded learning into a cycle of continous improvement.
Plan-Do-Study-Act (PDSA) Cycle
The aims of this section are:
- Describe how important process improvement is to a business
- Introduce a methodology we used to improve productivity in our logistics business.
Our third-party logistics business’s specific niche was retail logistics. When the business was first set up, it provided floor-ready merchandising services (FRM©) to retail suppliers. At that stage, the business was not a traditional warehousing and transport business – instead, stock was processed in the warehouse in a way that enabled it to be placed in each individual retail store in a ‘floor-ready’ condition, underpinned by an electronic commerce system. Items were price and security labelled, placed on hangers if required and scan-packed to store level.
This required a more varied skill set than traditional warehousing. The production process depended on the type of merchandise – whether apparel, shoes, cosmetics or electronics. This required a flexible approach and a standard methodology. Each supervisor would organise and ‘set up’ the job, and plan and manage the FRM© process. The productivity of each job and section was measured and reviewed individually with the supervisors on a weekly basis.
The methodology was called ‘the W5H Check’ because it asked why, what, where, when, how and who. Before each job was set up, the supervisor used this checklist to maximise productivity – answering the questions on the checklist. This approach improved productivity by reducing the number of times the goods were handled, minimising lifting and walking, questioning who was doing the work, eliminating unnecessary tasks and simplifying the process.
We found that this process improved productivity over time as it was decentralised, empowered the supervisors to make decisions, and measured performance. The supervisors were encouraged to seek input from their staff on how best to improve productivity and were authorised to communicate directly with the customers. It was similar to the PDSA cycle used in the Deming method and included specific questions that required thought. The W5H Check© sparked a process of continous improvement that was driven by ‘hands-on’ supervisors who were given the authority to make decisions that were the best for the customer and for the business.
The benefits of this system included very low staff and supervisor turnover, long-term customer retention and high levels of employee satisfaction. When the business was sold, the majority of supervisors had been with the company for over 10 years.
What are the areas in your business that you could improve using the simple Four Ways to Improve test?
Do you think that the W5H Check© system would be useful in improving productivity in your business?
Are there lessons to be learnt from the example above, relating to pushing responsibility down to supervisor level?