Nothing is perfect, but almost everything can be made better. That’s the basic philosophy behind any optimization strategy. Optimizing is an activity that businesses pursue when they are generally satisfied with the entry criteria and scope of a particular process, but want to further improve the efficiency or reduce output variability.
Overview: What is optimization?
Optimization is a very broad and general concept, but its basic definition is actually very similar to the core strategy of lean management. It’s a deliberate and data-driven process designed to incrementally improve the results of a system in regards to inputs. Changing inputs can be a part of an optimization strategy, but the focus is usually on the mechanisms of the process itself.
3 benefits of optimization
Optimization yields benefits by making better use of the company’s resources and limiting the risk of failed results.
1. Reduce outcome variability
Every action, task and process has an ideal or expected outcome, and every one also has the potential to yield results outside of this expected range. The primary goal and outcome of optimization is to reduce variability at each individual stage of a process, resulting in a natural reduction in overall variability.
2. Improve efficiency at every level
Eliminating waste has several layers of direct benefits to an organization. Identifying and limiting wasted resources yields an immediate savings by allowing the company to redeploy those resources elsewhere. It also has indirect benefits to improving workflow within operating spaces and conserving worker time.
3. Better risk mitigation
Optimized processes are naturally more resistant to risk. This is why business risk management programs are often linked together with optimization and cyclical improvement plans.
Why is optimization important to understand?
Optimization is a simple concept with complex and far-reaching implications. It’s important for every business leader to understand what they are doing and why they are doing it.
Long-term capability development
Even if specific optimizations are slower or more difficult to achieve than anticipated, they are still vital opportunities for growth. Companies and leaders must develop natural problem-solving capabilities, which only happens when they actually confront problems. Optimizing individual processes is only a part of the bigger picture.
Preparing for future compliance
Improving efficiency throughout your processes can also pave the way towards future compliance. This is particularly important in industries like manufacturing that are subject to changing regulations and have difficulty pivoting quickly when things change.
Achieve management balance
There’s really no such thing as too much optimization, but it’s still very possible to do harm by over-optimizing some areas at the expense of others. The cyclical DMAIC strategy should address different problems, adopt fresh perspectives and constantly seek for new solutions.
An industry example of optimization
A family-owned heating and air conditioning company has recently grown into a regional company with dozens of technicians and trucks. Despite the growing number of customers, there is also a growing number of complaints about miscommunication and slow service time.
Company leaders decide to optimize their customer service by examining every point of contact and task that makes up core processes. This includes initial digital or phone contact, communication about needs and scheduling with a technician.
The company discovers that the logistical capabilities of the office can’t keep up with the practical demand of such a large customer base. They decide to optimize direct service by connecting customers directly with technicians after they contact the company and give technicians more control over their own scheduling. This allows for more flexibility and customized service, resulting in faster service for less cost.
3 best practices when thinking about optimization
The most important thing to remember when thinking about optimization is you need to set limits, goals and frameworks.
1. Be deliberate
Deliberate action requires planning, consistency and thorough application. Deliberate optimization means considering at least a few different solutions for each problem and considering how you should weigh different variables against each other.
2. Always use data
Optimizing without data is like taking a short in the dark at best, which means ti’s probably going to be a waste of time. You need at least a few basic metrics that reveal fundamental efficiency and quality of results between different process cycles.
3. Embrace cyclical improvement
Embracing the concept of cyclical improvements means recognizing that there will always be more opportunities to fix things. It’s easy to take big bites during an early stage and cripple your optimization efforts. Instead, focus on manageable and achievable goals with objective standards and outcomes.
Frequently Asked Questions (FAQ) about optimization
What is an optimizing strategy?
This term describes any established method or plan that is primarily designed to optimize a particular process.
What is the purpose of optimization?
The ultimate purpose of optimization is to reduce waste while maintaining or improving the quality of the results.
What is the best way to optimize a process?
The best way to optimize a process depends entirely on the value-added characteristics and key variables that determine successful results.
A drive to optimize
Optimization isn’t a one-time thing or even a seasonal initiative. It’s a mentality and deliberate effort that must be applied and re-applied consistently to produce the best results. Developing a workplace culture that values and pursues optimization can have sweeping and lasting benefits for any business.