Newsweek Voices – Daniel Gross |

Newsweek reports that P.F. Chang’s has bucked the trend of other restaurants by not only opening new stores, it has also increased its profits by 38 percent compared to first quarter 2008. According to Co-CEO Rick Federico, P.F. Changs has done this by focusing its attention on identifying its core business processes and eliminating waste in the form of, “all elements of our business that don’t touch our guests or our products.” This is, of course, a fundamental principle of lean and Six Sigma. Practitioners of these two process improvement disciplines have long known that improving process efficiency and reducing or eliminating waste is a foolproof way to grow value for all stakeholders. These seemingly small improvements add up to dramatically better customer and employee experiences and set the businesses who use them apart from their competition.

Chang’s is one of a growing number of businesses in non-manufacturing sectors who are showing that the lessons learned by companies like Toyota can be applied anywhere there are processes involved.  When an organization directs the attention of managers and workers on improving the systems they work with, the result is an improved customer experience and lower costs of doing business, which benefits shareholders. Employees also enjoy working with processes that are more rational and less wasteful. Of course, in a down economy, employees appreciate simply having a job at all. While companies like P.F. Chang’s grow, sales in the casual dining sector in general fell precipitously. A survey by the Boston Consulting Group shows that the sector is among the hardest hit by consumers choosing to cut back on discretionary spending. For those companies that aren’t improving their processes, times are lean indeed.

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