QualPro Helps Retail & Manufacturing Companies with Process Improvement

Feb. 4, 2009 -- A multi-billion dollar

packaging manufacturer reduced manu-

facturing waste by half and decreased

machine setup time by 35%, providing

millions of dollars in additional profit.

Across industries and geographies --

chemical plants in Texas, paper com-

panies in Maine, telecommunications

companies in Illinois and Colorado, and

refineries in Alaska -- a cost-effective,

breakthrough approach to improvement

called MVT (multivariable testing) has

produced similarly dramatic gains in

productivity and quality.

How is this possible? By testing im-

provement ideas in advance to deter-

mine whether they will work.

There’s no shortage of ideas for improv-

ing productivity and quality. Everyone

from top consulting firms to executives

and their frontline employees generates

such ideas in abundance. Unfortunately,

only about one quarter of those ideas ul-

timately work. In a study of over 14,000

performance improvement projects,

MVT found that only about 25% of the

ideas for improvement succeeded, no

matter their source. About 50% of the

ideas made no difference, and the re-

maining 25% actually hurt performance.

These results confirm something most

people have long known -- good ideas

can come from anywhere -- and they

point to something that we’ve often

failed to do -- test ideas in advance to

determine which ones will work.

Some of the core concepts behind MVT

originated during World War II. I first de-

veloped the overall process while I was

working in the U.S. government nuclear

weapons manufacturing facilities in Oak

The Fast Track to Performance Breakthroughs:

Testing improvement Ideas in Advance

Ridge, Tennessee. Today, through the

evolution of the process, we can quickly

and accurately test 20, 30, or 40 im-

provement ideas simultaneously. At no

risk and almost no cost, we can quickly

determine the precise combination of

actions that will result in rapid and dra-

matic performance breakthroughs.

This determination is no small feat.

Consider a management team con-

fronted with 20 separate improvement

ideas. An exploration of all possibilities

results in 1,048,576 possible combina-

tions. The probability that the single

most perfect combination is already in

place approaches a million to one. For

30 ideas, the odds are a billion-to-one,

and 40 ideas represent a trillion-to-one

probability that the “right” combination

has already been found. Yet finding

the right combination is precisely what

sophisticated testing methods can do.

For example:

• Using this testing approach, one of

the world’s largest chemical com-

panies implemented a combination

of improvement ideas for yield and

capacity that generated $35 million

in cost savings at a single site in

three years.

• A $10 billion retailer tested 18 ideas

for profitably increasing stores sales

and found a combination that would

increase retail sales by $175 million

and retail margins by $85 million.

• A $30 billion manufacturer tested 32

ideas across 5 vertically integrated

sites and was able to reduce the

average defect level of a component

used in solar panels from 3000 to

just 2, resulting in increased capac-

ity in a critical growth business

• A major online professional services

company identified 160 ideas for

improving the performance of sales

representatives, tested 20 of those

ideas, and implemented 4, resulting

in a 29% increase in new business

revenue.

These and many other companies have

achieved such results simply by putting

together two longstanding “technolo-

gies”: the harvesting of ideas from all

sources and an efficient process for test-

ing those ideas.

Those who doubt that such apparently

obvious conjunctions can have such far-

reaching impact should consider the cell

phone. Cell phones combine telephony

and radio technology, both of which had

been around for more than a century

before they came together in a decep-

tively small package that has profoundly

altered the way we live and work.

The path to breakthrough performance

lies not in hiring unpredictable and

expensive experts. Rather, it lies in the

ability and willingness to put two and

two together -- improvement ideas and

testing.

Dr. Charles W. Holland is the founder

and CEO of QualPro, Inc., a business

performance-improvement firm in Knox-

ville, Tenn. that specializes in helping

businesses accomplish their goals

through the use of MVT® (multivariable

testing) and is the author of Break-

through Business Results with MVT.

In a study of over 14,000 performance improvement projects only about 25% of the ideas for improvement succeeded, no matter their source.