Steps To Operational Improvement

July 20, 2017

Operational improvement in a business does not happen automatically. It is an orderly process that involves critical thinking and problem-solving attributes. Although there are many areas in any business that can benefit from various changes, everything needing improvement in a business cannot realistically happen immediately and at the same time. 

Process improvements and effective problem-solving are weaknesses that exist for many small businesses and SMEs. Therefore, it is critically important for business owners and managers to be aware of this potentially negative environment and make forward progress by taking a step-by-step, methodical approach to problem solving. The general process consists of:

•    Breaking down areas of a business and potential issues into component parts
•    Using a logical process of analysis
•    Combining old information with new information and new ideas
•    Drawing conclusions
•    Making recommendations

When this process is used, many positive benefits follow.

•    Clarity is gained about problems and issues with possible solutions
•    Spontaneous, irrational, and emotional decisions are avoided
•    The probability of a successful outcome increases

The difference between success and failure in business is how issues are handled when they arise and what is done to prevent recurrences. A proactive, forward-thinking approach to business prevents many problems from occurring in the first place although in reality all problems can never be completely eliminated from happening. With this being the case, it is important to understand that problem solving is then a continuous process in business meaning problem solving does not start one day and end on another day. One problem or issue does start and end; however, as one situation is solved or improvements made, other situations will occur that have to be handled.

The efficient approach to problem solving in a business is to discover the biggest problem or issue that has the largest financial impact with the least disruption to the business and then take action. When a problem is identified, the following are steps to take:

•    Identify the specific problem with as much detail as possible
•    Identify the cause
•    Investigate all the facts
•    Brainstorm alternative solutions
•    Evaluate internal resources and strengths available within the business
•    Think several steps ahead
•    Understand all options
•    Select an appropriate solution
•    Implement action
•    Measure the impact of action taken

Measuring is the final step in the process but very important. If the action taken is not measured, then it cannot be determined with any degree of certainly if the action had a positive effect as intended, no effect, or a negative effect not intended. Some items of measurement (depending on what the problem or issue is) might be:

•    Measuring returns
•    Reducing production time
•    Lowering cost of operations
•    Reducing inventory, waste, errors, accidents, billing errors, etc.

Businesses should focus on prioritizing what will be most beneficial to improve efficiency, increase revenue, and lower costs. Continuous operational improvement is an important factor in business success and long-term growth.