How to Identify and Improve Your Core Processes
Summary
Ask yourself, “Are my processes fast enough to make my customers happy?” Velocity is the speed at which your system is operating currently (e.g., goods delivered on time, responsiveness to orders). If your inventory process has a long cycle time, beginning with raw materials and ending with the customer, this could be an indication of low velocity. Let’s look at an example in play… A manufacturing company interested in ISO 9001 quality was experiencing poor customer service and very low inventory turns and needed help. The company’s perceived problem was not that they carried too much inventory but, instead, that they had poor customer service and employee performance in processing and fulfilling orders in a timely manner. As we’ve discussed, follow the money trail through the five key steps: define your business model, create a process map, examine financial statements, set velocity and determine leverage.
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