Fiscal Year End: What’s Your 4th Quarter Play?

Fiscal Year End: What’s Your 4th Quarter Play?

In Quality Management by Frances DonnellyLeave a Comment

Fiscal Year End: What’s Your 4th Quarter Play?

We’ve just entered the 4th quarter of the calendar year! If you are like many business organizations, this is when you are planning budgets for next year while trying to make sure you have done everything you can to hit current fiscal goals.  And many of you are doing all of this in an environment where:

  • Depending on your point of view, 5 or 6  years of recovery through the ‘great’ recession is still weighing down performance.
  • Your organization is surviving because you have ‘leaned’ out teams, in some cases to bare minimums.
  • Ongoing political and economic global uncertainties are complicating the processes and decisions you make, putting your historically reliable ways of planning for the future under threat.

If you would like to look forward to the upcoming year as an opportunity (finally) for improved profitability and growth investment, one tried and true method, even in this atmosphere of uncertainty, is doing what you do with fewer mistakes.

Reducing, or even eliminating, waste caused by errors can be the low hanging fruit of success.  Yet, many organizations don’t have formal programs that can help them identify and take action on these areas of waste.

Where to Uncover the Low Hanging Fruits of Profitability

  • Waste is not easily identified or targeted. The ‘cost’ of waste often gets buried in other expense items like overnight shipping charges or excessive shop floor labor. Sometimes waste shows up as an asset on the balance sheet in the form of inflated inventory levels because there is simply no time or mechanism for reviewing such items as safety stock level calculations and automatic reorders.
  • Spreadsheets and paper. Another reason why waste is not addressed is because spreadsheet and paper based systems for recording and tracking non-conformances can have serious time delays on reporting and analyzing data.  Consequently problems have already flooded the system before they are effectively addressed making it too difficult to identify and address root causes to prevent future reoccurrences.
  • No pressure to strive for perfection. A final reason that this low hanging fruit is not addressed can also be because there is a lack of regulatory or competitive pressure for quality control process. Often, without these pressures, organizations may fail to embrace a quality improvement culture because they believe it is not relevant to their business success.  A review of any of the case studies relative to the philosophies of Lean and Six Sigma will demonstrate that such an attitude or belief is indeed short sighted.

Applying focus and energy in an accountable way to any of these hidden costs of quality can yield reliable returns and improved profitability due to cost reductions.  That profitability can be amplified when your customers demonstrate their appreciation for your quality efforts with increased sales.

If you and your team are struggling to identify and validate opportunities and investments for improved profitability in the coming budget cycle then you may find that a defined focus on reducing mistakes can be your winning strategy.  Simply doing what you do better than you have done it in the past will make your team a winner.

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