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What is the theory of Process Improvement?

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Process improvement is about changing the tasks. Tasks may be eliminated or combined. The order in which they are performed may be changed and also the location where they are performed or the people doing them may be changed. The method of accomplishing the tasks may be changed, which will often occur by changing tools and equipment. When these changes are well formulated they can produce positive results in two ways, - better results and lower costs.

Better results will mean greater value has been created in the form of quality. Costs are lowered when fewer resources are expended. The total cost of labor, materials, equipment, facilities and energy required to achieve a given result are reduced when process improvement is successfully performed. Because costs are down it is possible to drop prices a portion of the drop in cost and still realize an increase in profits. This increase generates more business and once again more value is created, this time from volume.

Where knowledge and understanding are used well, we get better results and lower costs. The key that makes all of this work is that we are smart enough to increase the amount of value that we create, not by working longer hours but by using our hours more wisely. We work smarter not harder. The result is that everybody wins. Customers get better products and services at lower costs. Stockholders share in greater profits. Wages go up for both management and employees. When this theory is widely practiced across a society, individual earnings are up, prices are down and standard of living rises steadily.

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