Observe them. Evaluate them. Improve them. Watch them work.

Systems InnovationEvery system can be improved. If you don’t believe it, you should. It’s the main premise which forms the basis for systems innovation. Even if you are fortunate enough to have a system in place that is on the leading edge of the diesel repair industry, and is better than anything the competition has, it can still be improved. You just have to ask yourself, which systems should you innovate first, and which ones can wait? It’s a matter of prioritizing them based on your customers’ needs and your repair shop needs.

The Systems Innovation Process

Here is an overview of the Systems Innovation Process:

1.   Select a system to innovate.

Choose the most important system first. This should be a system that has the greatest impact on your business. Does it impact your finances? Does it impact productivity? Does it impact customer satisfaction? Is it a system that has frequent errors, such as an estimating process that continually underestimates labor for a specific part installation? Is it a system that involves more technicians than it should? Is it a customer service policy or process that gets frequent complaints?

Eventually, all of your systems should be innovated, but the ones that cause the most problems for your repair shop, your employees, or your customers, should be given the highest priority.

2.     Observe the chosen system on-site.

Watch the system in action. Talk to the employees who operate it, and have them walk you through it. Experience the system as they do, so you can get a feel for how they operate it. Get to know the system and understand its nuances. Read the current system documentation. Take notes if you see something in the system that concerns you, or needs further review. You can address it later during the innovation process.

3.     Diagram the system.

Use a flow chart diagram consisting of boxes connected by arrows to illustrate the sequential order in which the system is operated. Each box represents a specific task that needs to be performed, and labeled accordingly. The arrows show the order in which the tasks should be performed and how they are linked together. This diagram represents the system’s workflow as it now stands. Don’t attempt to innovate or change the system at this point. You are only documenting its existing benchmarks (or steps) for further analysis and innovation.

4.     Determine the system baseline by analyzing its input, output, and cost.

The baseline is determined by quantifying and describing the system input, output, and cost.

System Input: The input of a system includes all the resources used by the system to produce its desired result. These resources may include the number of customers, employees used, parts purchased, equipment and tools required, and paperwork. System inputs have specific metrics associated with them, such as time, quality, and efficiency that can be measured and analyzed to understand their impact on the results of the system.

System Output: The output of a system is the result it produces, plus any by-products and waste it may generate. System outputs also have specific metrics associated with them that can be measured and analyzed to understand the effectiveness of the system. Outputs from a diesel repair shop system may include the number of parts installed in a day, the time it took to install the parts, the quality of the parts installed, disposal of the used parts, and profits generated from sales.

System Cost: System costs are the specific costs directly attributable to the system and its implementation. These direct costs do not include overhead costs or any other cost that is not related to the system in question. For example, if a system requires 2 diesel repair technicians to operate it, then their pay and benefits are part of the system’s labor costs. But management salaries, your advertising budget, or office staff are not part of the system costs.

With this information, you now have the baseline against which you will measure future performance of the system.

5.   Analyze the system’s workflow.

Workflow is the progression of activities, materials, and information into, within, and out of a system. Workflow has four components: 1) Task flow; 2) Material flow; 3) Information flow; and 4) Layout and traffic flow.

  • Task flow consists of the steps you showed in your box-and-arrow diagram.
  • Material flow is the equipment, apparatus, and supplies used in the system.
  • Information flow includes accounting data, operating instructions, key indicators, and management information about the system.
  • Layout and traffic flow is the physical arrangement of workstations and the traffic patterns in and around them.

The workflow includes connections with other systems in the repair shop and even connections with outside suppliers, regulators, and others. You need to look at those relationships to understand the effect the system has on the larger scheme of things in the repair shop.

6.   Apply the systems innovation checklist

Ask and answer these questions regarding your system to explore opportunities for improvement:

Output: Does the system’s result meet all your expectations and requirements? Are the by-products valuable or should they be minimized or eliminated? Are the levels of waste and rework at an absolute minimum?

Benchmarks: Are the benchmarks (the steps that make up the system) the appropriate ones? Are any additional benchmarks needed? Should any be eliminated or simplified?

Sequence: Are the benchmarks in the most effective sequence? Can any steps be operated at the same time, rather than in sequence, to reduce cycle time?

Internal Balance: Are the benchmarks within the system in balance? Is the output from one benchmark what is needed by the following benchmark, and vice versa?

External Balance: Are the outputs from other systems received in the right amounts, at the right time, and of the necessary quality? Are the system’s outputs to other systems produced in the right amounts, at the right time and quality?

Spin-offs and mergers: Are any of the benchmarks important enough that they should be spun off and developed as systems themselves, rather than merely benchmarks within the system?

Consolidation and fragmentation: Can you combine any of the benchmarks into a single step? Can any of the benchmarks be broken into separate steps.

Staff distribution: Can you distribute your manpower for better results? Is it better to have one person perform a chain of benchmarks or to have several people each performing a single step?

Movement of supplies and materials: Are the supplies and materials needed at each benchmark available when they are needed, in the correct quantities, and in the required form?

Information: When information, such as assembly instructions and product specifications is a necessary pert of a benchmark, is it readily available and easy to use and understand?

System layout: Does the physical layout and traffic pattern of the work station detract from, or enhance work flow. Are work stations configured not only for efficiency, but also for human factors like safety, comfort, and convenience?

Inspection and quality control points: Are there a sufficient amount of quality control points in the system? Are there too many? Do they interfere with the operation of the system?

Idle points and transitions: Are there any points within the benchmarks where work stops or slows? Can they be eliminated or minimized?

Equipment: How could technology help to improve the system? Does each workstation have what it needs to get the work done? Could it be done better with different or newer equipment?

Centralized vs. decentralized: Are there benchmarks in this system common with other systems, and can these steps be centralized? On the other hand, it may be better to decentralize some centralized operations for better quality control or responsiveness to the customer.

Management decision points: Does management or some other decision maker have to review and approve any part of the system’s operation? Do such decisions interrupt or interfere with the system? Can decision points be eliminated?

Gathering management information: Rather than creating new, potentially intrusive information-gathering steps, can information gathering be piggy backed onto existing document flows?

7.   Diagram the innovated system.

Decide what improvements to try, or the best configuration for a new system, and diagram it. Again, the box-and-arrow diagramming technique works best for this. Take advantage of people who populate the “old” system to develop suggestions and give their experienced opinions on various ideas for innovating the system.

8.   Estimate the performance of the innovated system and compare it with the current system baseline.

Quantify and describe the key indicators of your newly conceived system.

9.   Install and test the innovated system

This will require training, planning, and probably some on-site experimentation, followed by continued testing and observation. When the system has settled into its normal pattern of operation, you’ll want to determine the “norms” of its operation (the normal range of input, output, and costs, again expressed in terms of key indicators), and document and use ongoing monitoring as part of the system implementation process.

Effective systems are at the very heart of every successful business. And systems innovation is the only way to keep your systems effective and your diesel repair shop healthy and thriving, year after year. You have the power to create and implement positive change in your business. Use it to the best of your ability.

Please visit our blog post weekly to learn more about how systems development and innovation can benefit your diesel repair shop.