Cash is King, Lean Six Sigma sit at the Roundtable

In today's tough economic conditions, many businesses are focused on generating and keeping cash to minimize borrowing. Three obvious areas of focus, as evidenced by your local, national and even international news, are reducing spending, eliminating inventory and cutting headcount; but the challenge is to maintain clients and provide excellent customer service despite fewer resources. In today's uncertain economy, businesses are looking to simplify their supply chains, including minimizing their supplier base. Only those suppliers with superior product quality, a proven track record of on-time, in-full service performance, and unparalleled customer service and responsiveness will survive.

So how does one eliminate wasteful inventory in order to save cash yet continue to deliver exceptional service? Now, more than ever, is the time to align your business improvement methodologies to drive a customer-focused mindset. Meet with your best customers and "Lead Users" to truly understand how your product or service helps them achieve their "desired outcomes"; meet with lost customers and non-cutomers to understand your competitors' strengths and weaknesses. Networking, not retrenchment, is vital in today's troubled economy for survival - - and growth.

Once you understand your customers' wants and needs (and potential customers' unmet, unarticulated needs) you must work to lean out your value streams to eliminate non value-added activities, reduce waste, and improve speed while improving the capability of your key business processes and products to eliminate defects and improve reliability. Understand that inventory is the outcome, planned or unplanned, of unstable and/or mis-aligned processes. Not all inventory is bad. Some inventory may be unavoidable depending on fluctuations in customer demand, your ability to forecast, and your own internal constraints that prevent quick reaction and response. You must work to understand all the forms of inventory in your supply chain (for example, raw materials, components, packaging, work-in-progress, semi-finished goods, sub-assemblies, finished goods, quality hold, rework, scrap, etc.), and the root causes of each inventory type (e.g., unknown requirements, inadequate specifications, unstable inputs, incapable process, lack of robust design, etc.).

Together Lean, Six Sigma, Total Quality and an engaged workforce all play important inter-connected roles in improving operational effectiveness and customer satisfaction, for short-term survival and longer-term growth.

Revalidating the Value of ISO in Tough Economy

Is your management team questioning the costs and value of ISO registration? In these tough economic times many organizations are turning every stone looking for areas to cut costs, including the direct and indirect costs, real and perceived, associated with ISO registration. Certainly, if your customers demand ISO registration as a requirement to do business the value of existing business and the opportunity to bid on new contracts is much easier to quantify. But what if your customers do not require ISO registration?

• Does your organization use ISO to manage and continually improve its operations?
• Is ISO registration used as a competitive advantage?

Here are some additional areas of opportunity one might consider when re-validating your QMS registration:

1. Protect the corporation
   - Prevent defects due to workmanship errors resulting from a lack of documented procedures and ineffective training.
   - Prevent manufacturing escapes due to ineffective traceability & identification, and control of nonconforming product.
   - Prevent design flaws and defects due to inadequate controls in the development and management of change processes.
   - Assure claims substantiation in product design, and verification of statements, expressed and implied, on all product packaging and promotional literature.
   
2. Deliver the brand promise
   - Ensure that your systems and processes are stable and capable to produce and deliver products and services that consistently meet customer requirements.
   - Build strong customer relationships through trusted, reliable, predictable performance.
   - Assure competitive advantage by offering value-add products and services.
   
3. Legitimize your QMS effectiveness through accredited 3rd party assessments
   - Ensure the effectiveness of the your organizations' key business processes as well as the six required documented procedures of ISO (document control, record control, management review, internal auditing, control of nonconforming, and corrective & preventive action).
   
4. Minimize and eliminate the need for customer on-site audits, the distractions they bring; and protect your trade secrets.
   - Similarly, minimize the costs associated with supplier audits by requiring that your suppliers and outsource (contract) manufacturers be ISO registered.

Opportunities for cost reduction associated with ISO registration may be realized by working with your registrar to move to an annual surveillance audit, and/or possible reduction of audit days as the result of any organizational downsizing. Too, perhaps you can share internal auditors with a sister operation.