Can organisations 'do more with less'?
As the saying goes "If ain't broke, don't fix it."
In organisations, when processes work, there is less urge to investigate whether it can be improved or not. After all, change can be both scary for employees and disruptive to ongoing activities. But in a country that is alternating between national and local lockdowns, it's clear that for some organisations, 'the way that they've always done it' has been forced to change out of necessity.
It could be argued that for all firms, merely surviving this period is their most important concern and so changing their current processes to 'just work' for the ‘new normal’ will do for now.
However, for some businesses who may be faced with reduced revenues and smaller workforces - now may be the perfect time to find out if their internal processes can be optimised to cut costs. Can organisations do more with less? Business Improvement may provide the answer.
What is Business Improvement?
Within business improvement - increased productivity, improved quality and lower costs are all benefits which are generally associated with the manufacturing industry. However, business improvement principles are universal. In a nutshell, practices like Lean and Six Sigma rely on employees working together to improve organisational performance by methodically removing wastage in a process. Essentially, the customer/end-user is the focus of the product or service, and processes that aren't satisfying the customer or serving another key function are removed.
Why are Business Improvements necessary?
An Erratic Environment
Firstly, the pandemic has directly affected how most organisations operate. According to the UK Office for National Statistics (ONS), in April 2020 - nearly half (46.6%) of people in employment did some of their work from home. The ONS also suggests that businesses currently trading, 43% experienced a drop in profits compared to 2019. Likewise, the Bank of England's DMP Survey indicates that in Q2 of 2020, sales dropped by 30%, business investments fell by 33% whilst unit costs rose by 6%. Consequently, many companies have been forced to run differently day-to-day and they're doing so with tighter budgets caused by falling revenues & rising costs.
Firms that are still trading today have found a way to make things work. When the furlough scheme eventually ends, some businesses will be forced to make redundancies. Perhaps, the burning question is, "How will organisations satisfy their customers, stay ahead of their competitors, and maintain consistently high levels of output with even fewer resources?"
Secondly, advancements in technology have disrupted the way that organisations operate. Due to the internet, customers are more well informed and well connected through social media. If they have a poor experience with your product or service - they can leave negative online reviews, which could damage your brand image and in turn, affect future sales. As a result, it's vital that companies react quickly to satisfy customer expectations.
Again, innovation has made it easier for new companies to break into industries that would normally have high barriers to entry. For example, the development of mobile apps has allowed Uber to become a major player in taxi services and food delivery, despite not owning any vehicles. When new companies threaten the status quo in a market, it's important that the existing firms innovate to survive.
Business improvement can help companies add even more value to the internal processes which already provide them with their competitive edge. As a result, it becomes harder for newer competitors to close the gap. For example, companies with highly efficient supply chains will find it easier to win a price war with their rivals if they can find a way to lower their overheads to protect their profit margins.
Where is this being used?
Business improvement methods are not just used in the manufacturing industry to increase product quality & reduce defects - these practices are applicable in a wide number of sectors.
In healthcare, they are being used to improve patient outcomes, the patient experience, and clinical effectiveness whilst simultaneously reducing the length of stay in some cases.
Local Authorities & Third Sector organisations i.e. charities have used these methods to make significant cost savings. According to a Local Government Association report - Telford & Wrekin Council's review of their transport system identified savings of £1.2 million over a 3 year period with anticipated savings of £0.9 million annually thereafter.
In the transport & logistics sector, companies like DHL have identified that reducing wastage in their supply chain can lead to cost savings of 10 to 20% by consolidating their inventory & transportation and reducing their warehouse costs.
Equally, for companies within customer service departments i.e. insurance, retail, telecoms, and utilities - these improvement methods can be used to structure internal processes where fewer employees are needed to deal effectively with higher volumes of inbound customer queries whilst successfully lowering wait times.
Who would implement it within your organisation?
That would depend on the size of the organisation and its needs. Smaller SMEs may nominate a single person who is involved in their operations to review & deliver improvements across the entire firm. By comparison, in larger companies, team members from each functional area i.e. back office, logistics, operations, or the warehouse could be used to investigate those processes.
Through apprenticeship funding, companies in the UK can build business improvement knowledge internally by developing the skills of their existing employees. The following apprenticeship programmes are available;
L3 Improvement Technician
L4 Improvement Practitioner
L5 Improvement Specialist
L6 Improvement Leader
How can you fund Business Improvement?
Government funding is available to all UK-based businesses which could cover some, if not all the costs. Further details can be found below.
SMEs with an annual wage bill below £3 million can benefit from a 95% subsidy on total apprenticeship costs, for example, a L3 Improvement Technician course would cost just £200.
Provided that there are sufficient funds in the their apprenticeship service account, companies can use their levy funds to fully cover the costs of these improvement apprenticeships.
In some circumstances, the cost of these courses could be fully covered by an Apprenticeship Levy Transfer.
Who Are System Group?
System Group is the UK's largest transport and logistics training provider. We deliver commercial courses and a range of apprenticeship standards including business services, business improvement, logistics & supply chain, leadership & management, and transport.
How Can We Help You?
We can help levy-affected companies and SMEs access apprenticeship funding to develop both existing employees and new members of staff.
We use an online learning platform to deliver our apprenticeships remotely, which means that your members of staff can receive apprenticeship training without breaking social distancing measures. Our Skills Coaches are available to provide continued learner support during this time.
We can also provide a complementary resourcing service to recruit apprentices for your entry-level programmes.