Balancing Process Improvement and Layoffs for Operational Efficiency and Cost Reduction

Dear Seniors,

In this market situation, I am sure almost all of you are being pressured to cut costs, and one place everyone looks is headcount reduction.

Why is it that companies don't look at improving processes to enhance efficiency and reduce costs? Qimpro Consultants (www.qimpro.com) has been doing this for years and gives you the option to hire consultants to help with this or, if you prefer, get your teams certified using self-study courses from Qimpro College.

BestPrax Club also offers you the opportunity to explore best practices in other companies to benchmark against and utilize Creativity Labs to innovate for solutions. With all these tools available, why are we still considering laying off people who are the company's most valuable resource?

I would love to hear your thoughts on this.

What's the creditworthiness of these people?

Will you teach the businessman and entrepreneur how to do business?

This is ridiculous and absurd.

Badlu

Hi,

Let me share my views on this regarding Process Improvement vs Layoffs.

In my understanding, Process Improvement should be the preferred approach instead of opting for Layoffs. It would be beneficial for every company to periodically assess their operational efficiency to reduce operational costs rather than resorting to Layoffs. During Layoffs, there is a risk of losing valuable human assets that cannot be easily replaced.

Employees can focus on capital expenditure to navigate through economic downturns. However, in extreme circumstances, Layoffs may be necessary, but these situations can also be minimized.

I encourage further discussion and insights on this topic.

Regards,
K. Jayavel

Hi Badlu,

I think you have misunderstood what they are doing. No one will teach you how to do business but will help you make your processes more efficient. Improving efficiency helps reduce costs that you never knew were there, and also that you accounted for in your budget. Also, benchmarking with processes in other companies (even cross-industry) shows you how well a process you are doing can be done. Keeping those targets in mind can help you improve your process.

There is always room for improvement, and if you are the best, you need to innovate to provide your customer better, cheaper, and faster services/products. For credibility, their "About Us" page on Qimpro says enough to prove they are credible, and also the article by Dignity Magazine on the MD (see the homepage) gives a lot of information. BestPrax Club was also formed by Qimpro and shares the same respect in the industry.

Please let me know if this helps clear things up or if I have misunderstood what you were trying to say.

Dear,

Process improvement is an ongoing process and every company goes through the same. It is not time-dependent nor recession-dependent. Layoffs occur when one feels that the working capital is not flowing smoothly and wants to cut expenditure. In the books of account, manpower is considered an expense with no provision for depreciation, unlike machinery where depreciation is accounted for. Therefore, even if a machine does not operate at optimum efficiency, the company can still be profitable. On the other hand, an employee, even if efficient, is seen as an expense, and during tough times, expenses are usually the first to be cut rather than tools for making a profit.

Companies that go on hiring sprees during good times should evaluate their numbers carefully. Regular training should also be provided to employees to keep them up-to-date and maximize their value.

Thank you.

Hello All,

No doubt, we understand that the layoffs are very sensitive to the organization as we may lose critical resources/human assets. But let me tell you, as HR professionals, we can minimize the numbers for the layoffs. If there are some unproductive resources in the organization, we may warn them. If we don't find any improvement, we may then ask them to leave. Because if somebody is not contributing at all to the organization, it is a huge loss to the company.

Thanks... Please share your views on this.

Badlu & Monaisha

If an employee is unproductive, whatever you call it, who should be held responsible is my question. Who hired him? What is T&D doing? What are the Management and HR's doing? If you talk about disciplinary action in case of layoff, it's fine. Otherwise, it's a failure for any company to hire so many and fire so many. Then the company should think of its top management.

So, I just want to tell you that either you have not understood the point Jogesh is discussing or you are not interested in retaining the resources in your organization. Try to be creative and support such concepts that can give us better results in such difficult situations because this can happen to us. Because no one is safe and secure.

Dear Jogesh,

It's a good point that during times of recession, one should concentrate on trainings and efficiency improvement methods, like Toyota did when there was a high order of recession. They did not lay off even one staff, whereas all their competitors did. Focusing on process improvements generally, and especially in these crisis periods, is a good idea, whereas most top managements neglect this area and look for shortcuts like layoffs. Very few Indian companies truly practice Six Sigma, and others just make a fashion statement that they are Six Sigma companies.

While I agree that process improvements should be carried out, I would not be very specific about you joining Qimpro college. You may learn these tools, and the respective companies only have to adapt to their situations by deputing their internal process analysis experts for improvement because they know their processes better than anyone else. I also personally know Mr. Suresh Lulla of Qimpro and was a student of his. After learning the tools, we deployed our team of BBs and GBs for improvement, which was beneficial to the organization. You need the top management's blessings for these things. They should believe in these things, and only then can you derive the real benefits.

Regards,

Jayaram.

This is misleading to the middle management and first-line management. Process improvement is a top management business with 10 to 15 years of experience in business management who analyze and redesign the entire business process, including organizational development specialists. This is not a generalist role; it's a specialist role in top management with a consultant profile that requires high-end business expertise.

Best regards,
Badlu

Dear Jayaram,

You are absolutely right that you need "top management blessings" for a quality improvement to be successful. The change has to be driven from the top.

Dear Badlu,

I am guessing you are trying to say the same thing as Jayaram about Top Management.

While Top Management must be involved in the transformation process, they are not the ones to actually do everything required for the change. For this, you need to have a team to execute.

For this to happen, you can either hire someone to train the team or use people who are already certified in Quality improvement, Process improvement, Six Sigma, etc.

Learning about quality improvement, Six Sigma, process improvement, etc. is the first step. Also, having knowledge in these makes you more valuable to companies. That is why I mentioned Qimpro College to get yourself certified. It is an option to train yourself at your own pace in these valuable subjects. A big problem in companies is also not being able to get an entire team together at the same time for training. This is also taken care of with this and you are not dependent on the company to get you trained.

Interestingly enough, BestPrax Club has also designed a tool called the Barometer that enables an organization to rate the quality of management performance. This rating can be alone for individual business elements of the International Quality Maturity Model (IQMM), or collectively for all 12 business elements.

This can be done online at your convenience from anywhere. At the end of the assessment, you get a feedback report.

The Feedback Report to the organization, for a business element, will highlight:

1) Overall score

2) Sub-element scores

3) Noteworthy practices

4) Areas for improvement

5) Potential for improvement

6) Remarks by the BestPrax Review Team

This is itself a good place to start to find areas to improve.

I personally think this is a great idea. HR training departments should look at investing in their employees to get trained on process improvement to help find ways to reduce costs with this. The investment in employees will be much less than hiring a consultant and I'm sure it can be made up tenfold. The Qimpro college courses seem to be really cost-effective.

This is a good option to try on ten employees in each company to start with considering the export industry in India itself is looking to axe ten million jobs by March (Export units to axe 10 mn jobs by March: Report - The Financial Express)! If this saves one million jobs, it is amazing.

If top management doesn't join the Quality Improvement process at this time, they really should not be in their positions.