Process Improvement Landmine: Your Process or Service Cost Savings May Be One of More Stakeholders Monetary or Livelihood Loss

We must improve our manufacturing and service processes.  The Darwinian globally competitive world we live and work in demands it.  But if you involve appropriate stakeholders one or more might be on the losing end and, directly or indirectly, impede the efforts.

One example may be a contracted service provider whose arrangement with you might be a specified cost structure.  And internally to their organization, they undoubtedly have revenue targets they must achieve.  While some improvement efforts might be ‘win/win’ where you save money and the provider does not lose out, that is not always possible.  If not your cost savings are their lost revenue.

Another area is your employees and this one is nothing new to anyone.  Dependent upon the project, labor savings may be a focus of the effort.  Of course any stakeholder who sees his or her job (or their co-workers also) will probably, indirectly, undermine the effort.  If one or more of the areas of focus are unionized, there’s a whole different set issues at play.

So as you lead a process improvement project of any type, remember members will be tuned into their favorite radio station WII-FM, which is what’s in it for me.  There have been (well deserved) criticisms that project leaders focus too much on the technical and financial aspects of a project.  Of course they are critically important.  But so is the WII-FM dimension which can undermine things if they are not identified and addressed. (January 12, 2014)

Voice of the Customer: Make Sure You Get Input from ALL Before You Determine Critical to Quality Criteria

Voice of the Customer (VOC) is a key tool in the process improvement toolkit.  The consumer is the ultimate customer and pays for the product or service your firm provides.  But there are a number of other customers in the product or service delivery chain, frequently with competing expectations.

      For example, take a manufactured product which goes through a number of steps in a supply chain before it reaches the consumer.  A consumer seeks to maximize value for their hard-earned dollar, will frequently seek a low price, and may switch to a competitor.  In this instance, a low price could be a VOC.

A distributor of your product will seek to stock and sell a product which provides maximum profit to their firm.  If the distributor’s profit is from a percentage of their selling price to a retailer, they will seek to maintain (or increase) the price, if commission is their only form of compensation.

This is an example of potential conflicts with various external customers.  There can just as easily be internal examples also.  So it is important to gather, review, classify and prioritize VOC information from every customer involved with the processes that deliver your product or service. (January 1, 2014)