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Understand What Flows Through Your Business to Find Improvement

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I remember once seeing a cartoon which showed two people working a counter. On the wall behind them was a sign which read, “Quality Work, Low Price, Fast Service – Pick Two.” In order to deliver all three, which is what customers expect, it’s important to understand the flows of your organization.

The first flow is, of course, cash flow. This comes in two varieties, money coming into the organization, revenue, and money going out, expenses. Understanding cash flow is not as easy as it appears. Throughput accounting and Lean accounting are two methods some companies are using to try and get a better understanding of how cash flows through a business.

The second flow is the product or service flow. This starts with how the product or service is designed. The next step is how the product is built or the service delivered. How is the product or service used? Finally, what happens when the customer is done is the product discarded, recycled, or consumed.

How does information flow through the organization? How does it come into the company and how does it leave? How is it used in the organization, does it follow the work or pull the work forward? What types of feedback is received?

How does material flow in the company? If a product is built, how are the raw materials or parts brought to the point of assembly. For a service, how do the necessary information, materials, and people get to where they are needed?

How does the movement of the workers flow? Is the motion smooth or does it start and stop like rush hour traffic? Are there any wasted motions, like retrieving a paper file from a cabinet in another room or walking over to get a tool which is required for product assembly? Why is the tool at the point where it is needed? Why is the file located in a cabinet in another area?

Creative flow is important to understand. Creative energy, like any other kind of energy, can be harnessed and managed. Does a research and development department create everything and the rest of the people just do what they’re told? Or are all employees thinking about innovation, how to reduce costs, looking at safety issues, reducing wastes, and improving the environment. Are people developing skills to identify, articulate and communicate those kinds of things?

The final flow is time. Time is, of course, a factor in all the other flows. Since we can’t change time, rather than looking at how time flows; we need to see how the organization flows through time. How long does it take to accomplish things? Can the time be reduced? By reducing the time it takes to do our work, we reduce or eliminate the wasted things we do. Eliminating wasted brings us closer and closer to excellence.

By observing the flows in our work, we can see where things run smoothly like a tranquil river. Bottlenecks in the workflow create turmoil, much like the rapids in a river.

“Oh, this ol’ river keeps on rollin’, though,
No matter what gets in the way and which way the wind does blow,
And as long as it does I’ll just sit here
And watch the river flow.”
- Bob Dylan (Watching The River Flow © 1971 by Big Sky Music)

Any process, any product, any service can be made better in some way, somehow. So observe and understand the flows of your organization, it will lead to improvement opportunities.

Copyright © 2005 Chuck Yorke - All Rights Reserved

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