Efficiency increases represent the best way to increase company profits in a slowing economy. Doing the right kind of improvements can bring about almost immediate increases in productivity while reducing costs and waste. Through efficiency improvements, your company’s balance sheet can look better in short order. Done right, it’s win for both you and your employees. Here are 6 ways to increase your company’s efficiency.
Any attempt to improve company efficiency needs to have employees on board. The push for efficiency needs to be completely understood by the employees. Start off with an employee meeting. Don’t immediately call the meeting, but rather give employees a few days of lead time and ask them to come with ideas. Put up a whiteboard for employees to leave anonymous suggestions for improvement in the days before the meeting.
At the efficiency meeting, ask for suggestions and bring up the ideas from the whiteboard. Make sure that the employees know that you are serious about their suggestions. Sometimes the best efficiency suggestions come from employees. This shouldn’t be a surprise. Employees want to do their jobs better and know what’s keeping that from happening.
Time is money. A process that takes just a few seconds longer than it should may not seem like a lot, but multiplied by hundreds, or even thousands, of times per day it can turn into hours and hours of lost time. Streamlining employee processes realizes cost savings while also reducing the task complexity for your employee. That’s a double win.
You can streamline employee processes by contracting for a time and motion study on your processes with an Industrial Engineer. The engineer will evaluate your process and recommend time-saving reductions. Likewise, you can just ask your employees for ideas on how to streamline their job. Maybe you’re requiring a process that doesn’t affect quality or usability can be eliminated entirely.
Every company has waste. It might be in the form of inventory shrinkage, wasteful power usage, scrappage, or a myriad of other forms. While companies can’t reduce all waste to zero, they can reduce it as much as practicable. Working with employees on the importance of reducing waste is imperative. Incentivizing waste reduction represents one way to implement this. Have employees offer suggestions on waste reduction and maybe even appoint one employee to be a waste czar on a rotating basis.
The goal of your company is to make more money. Focus on increasing your company’s throughput by breaking bottlenecks. For many companies, order fulfillment can be a bottleneck. Orders need to be delivered to customers quickly and cheaply. Order fulfillment services can fulfill orders without taking away company resources and can provide significant cost savings. Your company can focus on production and leave the fulfillment to an expert order fulfillment service.
Bottlenecks also occur in the production processes. If you have a factory that requires multiple production steps, then one department seeing a productivity jump may not have any effect on the system as a whole. In fact, it could be a negative. Try to find the departments that are bottlenecks and break those bottlenecks. To remove your bottlenecks, add capacity at the bottlenecks or incentivize those departments to increase production.
Out of date technology represents a major efficiency cost. Slower computers execute commands slower resulting in lost time. An older machine can not only be slower but can be more prone to breakdowns. You’ll want to evaluate your current technological assets and see which ones are causing slowdowns. You’ll want to know which ones have actually become a bottleneck to production.
Upgrading technological assets isn’t just about buying new equipment or new software applications. If employees aren’t taking advantage of the new equipment or software, then you are not getting the full advantage. Bring in trainers to help your workers understand how they can best take advantage of the new technology.
Employees come to expect regular pay increases. One way to increase efficiency is to tie pay raises to efficiency improvements. If your employees are seeing regular efficiency and productivity increases, then pass part of this increase onto them in the form of a regular pay increase and bonus. Ensure that the standards are from the start so that your employees know exactly what they need to do for a pay increase.
You’ll want to make sure that you have a good way to measure any increases in efficiency so you’ll want to meet with your teams to figure out what is measurable and which metrics are best utilized. Decide on the metrics and make it clear what benefits employees will get when they hit the goals.
Increasing efficiency allows your company to do more with less. It represents a great antidote for any company in a slowing or growing economy. These 6 ways can help your company become more profitable.
Dixie Somers is a freelance writer and blogger for business, home, and family niches. Dixie lives in Phoenix, Arizona, and is the proud mother of three beautiful girls and wife to a wonderful husband.