As we all look around our businesses there are things we do well, very well and things that we could possibly do better at. It doesn’t matter what business sector you are in whether you provide a product, service or both.
Ambitious companies are always striving to generate new revenue, increase their customer base, provide great service and so forth. Sometimes we focus so much energy on doing this that we forget to look at our internal processes and reap the possible rewards that this can bring. Our organisations are the only area of our business sphere where we have complete control and are likely to be most successful in increasing our revenue from a return on investment point of view. Notwithstanding the fact that changes we make internally to improve revenue are likely to be of benefit and compliment our external efforts.
This is where “Getting It Right First Time” comes in, a simple exercise that any business can undertake which if carried through can see substantial increases in both generating new revenue, and increasing your customers.
Take one of your businesses processes, it could be the manufacture of your product, the operation of your service desk, the distribution methods, or any other process relevant to your business sector.
Whichever process you have chosen it is likely that there are some things you do well, and other parts of it that you could probably improve on. Perhaps the quality could be better, the distribution could be improved or you want to look at the delivery of your after sales care and support.
You might identify several points of concern in the business area you are focusing on for this exercise, in which case tackle each one in turn. For each identified point work out the cost of not getting it right first time and attach a monetary value. Some example categories you might wish to use are, but not limited to:-
Time spent dealing with a complaint
Call time spent speaking to customer
Cost of wages
Loss of sale
Loss of long term revenue
Loss of customer
Waste of materials
Loss of chargeable time
Disruption to planned business activity
As mentioned there are other categories that you may wish to use, that may be unique to your market sector. The more effort you put into defining your measurement metrics the more reliable your criteria will be. Now annualise your result based upon the occurrence of this issue, how many times does this issue occur? You should now have a cost to help you focus on the core issue.
Now you have the cost, how much would it cost you to put right? Look at the issue and have a good think about what would be needed to stop this problem occurring, in other words to get it right first time. Make another list, and cost it out, again a sample list is given below but should be expanded on for your business.
You should now have a cost for correcting the issue, and getting it right first time. The great things about solutions is that once implemented they tend to last for a long time with minor tweaking and upkeep as opposed to problems that keep occurring if nothing is done about them. Most of the time you should see that the return on investment for getting it right first time is well worth the required effort.
As a side note and related to this you need to take into account that if you are undertaking this exercise due to a number of complaints that you have received about your products or services. That only around 4% of your customers are likely to complain. Lost opportunities of potential sales therefore need to be considered, even if not take directly as a cost.
Quite often companies like to work with an external organisation when looking internally at their business processes to remove the biased and emotion from the exercise and also because they are so busy on a day to day basis that they have little time to carry out these audits themselves. If you would like to explore this with us, we would be delighted to hear from you.