Without proper planning even the little things can bring you undone. Everything has a consequence - cause and effect. On the other hand putting the right system in place early on will lead to success.
You will all remember the nursery rhyme "For the want of a nail".
For want of a nail the shoe was lost.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the battle was lost.
For want of a battle the kingdom was lost.
And all for the want of a horseshoe nail.
"Garbage in, garbage out" to put it in more modern terms. What you do up front with a project, or a job will determine its success.
Get it right up front - if you don't get the details of the order right, then you are unlikely to deliver the right product or service.
Indeed I had a very good example of this with one client. He was a small manufacturer, but determined to do well. Doing well was not becoming a very large business; rather he was looking to become very profitable. I was called in and told that the team on the shop floor were continually getting it wrong. Items would be delivered, and continually come back for rework and adjustment.
Now it didn't take much to track down that the problem lay at the very beginning of the process - receipt of order. Two problems kept arising here: the tradesman doing the measuring would not follow the old dictum "measure twice, cut once", straight human error. The second source of problems arose when a client came in the place an order. No checking system existed for a client and the company to agree on sign off on the order. Not surprisingly, orders were often wrong.
And mistakes like this lead to rework, which is waste. Waste which is compounded by the opportunity cost of sales lost while the rework is undertaken.
Now if they had not something about it the problem would have festered and grown, draining profits and reputation from the business. Unfixed the problem would have eventually lead to the business being lost, creditors unpaid and staff laid off.
As it was the company had some unhappy customers, shop floor employees who were being unfairly blamed (imagine how they felt about it), and a frustrated owner.
All these consequences were arising for the want of a nail, or in this case, a check at the beginning of the process to prevent the wrong order going into the system.
So what can you do about it? Do you understand your business process? How you take an order, do the work, and deliver the product or service? A simple process map showing each step can help clarify what you do.
Do you have some way of checking how well the process is working? How long it takes to pick an order, or make a repair, provide a service, where there are delays, or rework?
And do you check whether the customer is happy?
It's simple really. A basic system well thought out, and followed, that get's it right up front, will prevent a nail being lost. And it will prevent the lost nail causing a lost shoe, and a lost horse - prevent consequence building upon consequence.
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© Adam Gordon, Profits Leak Detective
Some profit losses are pretty obvious - so you fix them.
BUT, what if you don't know profits are leaking, cash out the door?
Possible leaks could be anywhere.
Are there some clues or symptoms that are tell-tales?