David Doyle, Director of Sales and Marketing at Kwixand Solutions shares three real-life examples of process optimization success stories.
Business process optimization helps companies increase their efficiency and productivity by optimizing their operations. But what does that actually look like? In this blog post, David Doyle, Director of Sales and Marketing at Kwixand Solutions, offers some first-hand insight into how business process optimization can help businesses and gives three real-life examples of process optimization success stories.
The goal of process optimization
Business process optimization is looking at the ways and the actual steps of how the resources of a business are utilized to fulfill a core task or goal. David has a personable example to highlight the importance of process optimization.
"For instance, the entry of a sales order is often done by an individual, who enters information into the system so that the next business process can take place, to fulfill the sales order, shipping the product invoicing for the product, and then receiving the payment for the product.
So, optimizing all those components of that overall process of order entry, shipment, invoicing, and payments will ideally reduce the cost of processing that order for the business - either by reducing the amount of time it takes to complete that process or reducing the number of errors during that process, or completely automating that process. That is the goal of business process optimization," says David.
Real-life examples of successful process optimization
Success Story #1
The Process in Question:
A social services agency had clients who were government-funded and needed help to manage their financial aid. The financial aid workers needed to provide an allowance for their clients daily. As part of the process, they would need to print out a receipt and reconcile and balance it back to their original cash drawer amount on a daily basis.
This was being done manually before, and it took an additional two hours each day for each financial aid worker to do the reconciliation.
David and his team designed and implemented a basic finance accounting software package with a trust accounting component and capability. By customizing the software, they could allow each of the 20 financial aid workers to serve their incoming clients individually.
The reconciliation time was reduced from 2 hours to 15 minutes, and the accuracy went from 85% to 97%
Success Story #2
The Process in Question:
A food manufacturing company whose headquarters were in British Columbia, Canada, had its manufacturing plant based in Ohio and constantly suffered from an unacceptable number of chargebacks from their retailer customers because when they delivered their products, it didn't have enough shelf life left for the retailer to have maximum selling time.
In the warehouse, the issue was that the pallets of product were not being stacked by the best-before ship date. This was their challenge; they just were not picking the right pallets to deliver at the right time and why they constantly had to pay chargebacks.
David and his team added another step in their process that when the product was coming out of production and being put on a pallet to be stored, a label would get printed that would go on the pallet – this label had the date the pallet needed to be shipped by. It was large enough to be easily seen by the operators from their forklift.
Forklift operators would look at this label and could immediately tell which pallet they should pick to fulfill the orders by date range.
After about a year of having this new process in place, the CFO informed David that this simple change had resulted in net savings of over a hundred thousand dollars that year.
Success Story #3
The Process in Question:
A provincial construction association provided safety clothing, equipment, and certifications to people who were entering the construction trades. They needed a way to track who received the gear and what level of certifications the individual had completed, and the number of hours they had done within their specific area of expertise.
They were tracking all this manually before, using Microsoft Excel. As the number of people they served doubled, it took a lot more time to maintain this information manually. They had already hired additional internal employees to track this information and were considering more hires to keep up.
David and his team designed a solution by leveraging a manufacturing software and figured out how to track all that information and identify individuals based on their safety gear issued, certifications, credentials, and skillset.
The results of this solution allowed this organization to double in growth while keeping its operating costs low.
Process optimization is not always about the software or technology you use.
Many small or mid-sized businesses often wonder whether business process optimization always means having to implement new software. According to David, that is not necessarily the case.
"So, the interesting thing about business process optimization is that it doesn't always necessarily depend on switching out your software or technology. To achieve organizational efficiency, you need to keep your people, processes, and technology in balance. So, any business could see an increase in profitability as a result of analyzing and streamlining these elements or automating processes, so they are in sync," he says, referring back to his example where he helped a manufacturing client save over a hundred thousand dollars without switching out their technology.
To learn more about how Kwixand Solutions can help your business streamline its processes and save money, book a free consultation today.