What I want to share with you today is how you can improve your turnaround time so that it improves your cash flow, your efficiency and also therefore your profitability.
Just In Time
In the 1960’s and 70’s, especially Toyota in Japan developed what we call the ‘Just In Time’ (JIT) manufacturing system which I’m sure you’ve heard all about in the past. Its main job was to cut away waste in the manufacturing process.
So without getting too fancy, in your practice you’ve got work coming in, it sits on a desk, we call the client and get no response, they don’t phone back, we shift the work from this side to that side, then more work comes in, and what we have is all this cash piling up on your shop floor. And that is cash that really wants to be in your bank account so that you can build your practice/business with your money.
Today I want to show you how to easily measure your turnaround time because when you do that it’ll improve your efficiency, it’ll improve your cash flow and it will take stress away from you and your team.
The 6-Step Turnaround Time Process
Step 1: Allocate a champion. You need somebody that’s not you to be responsible and drive this process.
Step 2: If you have some fancy software to do this on, fantastic! If you haven’t then no problem, using an Excel spreadsheet works fine. It can really be as simple as that.
Step 3: We want to log when ‘books in’ arrive. Now when is that? Create a definition and figure it out with your team when exactly that point is.
Step 4: The next step is we need to log when the ‘books out’ happens. And again, figure out a definition with your team of when exactly that point is. So now you have a ‘logged in’ and ‘logged out’ point.
Step 5: The next step is to figure out the difference. How many days between when the books were logged in, and when they were logged out. Once you have that you need to track that number.
Step 6: And the final point is that now you know what the number is, set targets! If you know that your number is 60 days, set a target of 50 days.
And that is a fairly simple, straightforward 6-step process that will help you decrease your turnaround time in a matter of weeks/months.
So one question for you, in your practice right now are you already tracking your turnaround time? And if not, well what’s stopping you?