By Kayla Matthews
You’re well aware improving your business processes means a more profitable business with less downtime. Anytime you implement a new process, you should define some key performance indicators (KPIs) to help you see if your business and employees are meeting the correct criteria. Speed isn’t always the best indicator of productivity for example.
Around 99.9% of the businesses in the United States are small businesses. When you run a smaller company, not meeting one or more goals can be completely devastating to your bottom line. Tracking your success along the way is vital so you don’t spiral into failure.
Measuring how well changes work isn’t always an easy task. Fortunately, there are some metrics offering clues to how well procedures work.
1. Flowchart
A flowchart defines the entire process and how you move from Point A to Point B. Understanding the different ways your team accomplishes tasks can help you see areas for process improvement.
Make sure you follow the tasks from the beginning to the end and take careful notes so your flowchart is complete. Then, bring in a neutral party to look at the flowchart and identify any areas for concern.
2. Handling Time
If you aren’t reaching your goals and feel production backs up, look at handling time as a measure of productivity and see where things might be sped up. If you don’t have a concrete way of measuring handling time, talk to your employees about how long different processes take and if they have any ideas for speeding things along.
If there is one bottleneck in the system, you may need to hire more employees, upgrade equipment or offer more training. Think about the capacity for each person and each machine and if it meets your current inventory demands.
3. Return on Investment (ROI)
Every brand has some products or services that have a much higher ROI than others. There are many reasons you might implement a lower ROI product, including attracting new customers who then become rabid fans who buy additional products.
Factor in all the reasons you sell a particular item and then see if the ROI measures up or not. Look at the lowest-performing items first and their processes. What kind of manpower does it take to deliver that good and is the payoff worth it? Is there any way to reduce the cost and increase the profit? Knowing your ROI allows you to make tough decisions about products that need removing from your inventory.
4. Turnaround Time
How long does it take to fulfill a customer’s order? If you make a customer wait too long, you risk losing them to a competitor. Brands such as Amazon, who deliver orders within two days for Prime subscribers, have changed the landscape on how long people are willing to wait for a delivery.
In order to improve turnaround time, you have to look at the entire process of ordering and logistics. From the moment the order comes through until it leaves your building, you are in control of the process. Look at how quickly the order gets picked, packed and shipped. You should also consider the shipping company used and how quickly they deliver or if you need to make some changes in shipping carriers.
5. Error Rates
Measuring error rates is a little trickier. Your employees may fear their mistakes will result in a lost job. Start by bringing everyone on board and explaining why you want to improve your error rates for better customer experience (CX) and that you are measuring the rates not to reprimand them but to figure out how you can all work toward a better CX for your company.
You may never be able to completely track every error, but you can track when customers call in with a complaint. Fix any issues immediately. Think about the new Domino’s Pizza ad where they say they’ll replace a pizza if it isn’t right. You should have a similar attitude. Strive to get the order perfect and look at why it went wrong in the first place so you can avoid the same issue in the future.
Pay Attention to Detail
Measuring your business process improvement isn’t an easy task. Processes are ever-changing and there are dozens of different metrics available. Focus on the things you have the most control over which will afford maximum improvement to your business.
With attention to detail and a little effort, your business will become more successful and your processes smoother.
About the Author: Kayla Matthews writes about communication and workplace productivity on her blog, Productivity Theory. Her work has also appeared on Talent Culture, MakeUseOf, The Muse and Fast Company.
Photo by Thiébaud Faix on Unsplash
