Recently I was working with a new client, the owner of a one year old manufacturer of retail signage. It was our introductory chat. I asked him how he would describe his business model. His first words were,” I want to build a sales company that makes things.” Continue reading
Category Archives: Operations
Labor Costs, The Beer Game, Apple, and Supply Chains
Recently, via Zite, I came across a posting, “The Beer Game -or- Why Apple Can’t Build iPads in the US” by David Wu
(@marksweep) that used the famous supply chain simulation game, The Beer Game, to allegedly explain why Apple has it manufacturing operations in China.
The lessons of the Beer Game are pretty evident. Delay in the supply chain causes amplified downstream problems. The problem wasn’t that we were kids running beer supply, the problem was the structure of the chain itself. Small changes at the front end lead to massive mistakes down the line.
Because of the bullwhip effect illustrated by the game, Apple needs to have factories in China because the supply chain is there. We learned in the Beer Game that minute changes have massive ripple effects along the supply chain.
The U.S. has lost that industrial base and it’s extremely difficult to get it back. It’s not about unions, jobs Americans don’t want – it’s about delay.
These are not the lessons of the Beer Game. Continue reading
Manage Your Business As Processes
Many business owners and managers are frustrated by the poor results achieved by some portion of their business. They diligently track their business using metrics like sales, profits, customer perceived quality, on time delivery, etc. These are obviously some of the most important results any business needs to produce. Why doesn’t attention to these important metrics produce better results?
Unfortunately none of these metrics are actionable nor controllable as objects of management focus. No amount of teeth gnashing about inadequate sales will generate a single additional sale. No matter how intensely you beat on your operations to improve on time delivery will this lead to improvement.
Why is this so?
Let’s examine on time delivery as an example of the problem. On time delivery is an end result of a process, a series of ordered steps, activities, that are your production operation. This process may not be delivering adequate on time delivery to your customers. But, you cannot understand what is causing this process to be out of control without examining in detail, through what is commonly referred to as root cause analysis, the causes of this failure. Here is a brief list of some of the more common causes:
- Part shortages
- Machine down time for poor maintenance
- Production bottlenecks
- Poor part quality
- Lack of labor
- Poorly trained labor
- Poor scheduling
- Inadequate customer requirements specifications
The lesson here is that in order to improve on time delivery you really need to first determine the cause, second set improvement tasks that eliminate the cause, and third measure improvements in that function until you achieve a controlled state of adequate
performance for on time delivery.
The fundamental mind set is to see your business as a system of processes. Your task is to make sure the processes are well defined and operate in a controlled state to produce the desired results. The method for achieving in control processes is to determine the root causes of failure, set tasks to eliminate the cause, and track metrics that measure the reduction of the causative element.
Now you might be in a service business and say to yourself, “My business does not produce widgets. How can this apply to me?”
Services are also produced through a series steps. In many cases these steps are not well-defined and are further complicated by the frequent direct interface with, and frequently the participation of, the customer. It is not as easy to “see” the steps in services production as in widget production. You don’t have the machines and parts moving around with a sequence of physical transformations.
Here is a list of typical causes of poor service quality:
- Bad service design
- Mis-managed customer expectations
- Inadequate information resources in the hands of the frontline service provider
- Poor training of the service provider
- Unclear decision making scope and authority for the service provider
Learn to see your business from a process perspective. Then, apply process control techniques to drive to better results in sales, profits, customer retention, and whatever else is important.
ASAP Means “Never”
A Truly Terrible, Over Used Acronym – An Indicator of a Sloppy Culture
ASAP – “as soon as possible”, this acronym has been in use for over 50 years. Its use is ubiquitous.
ASAP is all too frequently slapped on to every memo or email where a dues date is to be found. How does this help to prioritize work? What does it say about the person making the request? Will sometime tomorrow be just as good? Maybe next week sometime? Perhaps the requestor does not really know when they need it. When does the person requesting really need it? Is this a symptom of out of control work processes? Continue reading
The 6 New Management Imperatives by Bruce Temkin – comments
Bruce Temkin has published a free book on his blog((1)), The 6 New Management Imperatives – Leadership Skills for a Radically Changed Business Environment. Mr. Temkin sets out to define a “new set of skills” for managers. These are the 6 new imperatives:
- Invest in culture as a corporate asset
- Make listening an enterprisewide (sic) skill
- Turn innovation into a continuous process
- Provide a clear and compelling purpose
- Extend and enhance the digital fabric
- Practice good social citizenship
Lists like this one are very popular. I have been known to make lists of key practices and the like. But for the practicing manager lists are frequently tough to integrate into day-to-day work. Mr. Temkin’s six imperatives falls into this problem category. Overall, the six imperatives are reasonable enough as they stand. But I want to take a closer look at each and then suggest a more global approach. Continue readingFootnotes:
- experiencematters.wordpress.com [↩]
Proven Checklist for Business Success – How Do You Put Them Into Action?
I receive a regular email titled, “Management Intelligence…… from Edward de Bono and Robert Heller”((1)) . Their most recent email was “Management Intelligence: A proven checklist for business success”. Here is the checklist they provided:
- IMPROVE basic, measured efficiencies continuously?
- THINK simply and directly about what you are doing and why?
- BEHAVE towards others as you wish them to behave towards you?
- EVALUATE each business and business opportunity with total, fact-based objectivity?
- CONCENTRATE on what you do well?
- ASK questions ceaselessly about performance, markets and objectives?
- MAKE MONEY- knowing that, if you don’t, you can’t make anything else?
- ECONOMISE always seeking Limo (Least Input for Most Output)?
- FLATTEN the organisation to spread authority and responsibility?
- ADMIT to your own failings and shortcomings and correct them?
- SHARE the benefits of success with all those who helped to achieve it?
- TIGHTEN up the organisation wherever and whenever you can because familiarity breeds slackness?
- ENABLE everybody to optimise their individual and group contribution?
- SERVE your customers with all their requirements to standards of perceived excellence in quality?
- TRANSFORM performance by innovating creatively in products and processes including the processes of management?
Again from this email concerning this list: “These questions penetrate to the heart of successful management. They have passed, and will pass, the test of time.
This list looks a lot like others I have seen, and certainly many entries would be on such a list that I might create. But, whenever I see lists like this, I say to myself, “Great, but how do I do this?” Lets just take number 15, for example, “Transform performance by innovating….”. What business processes do I put in place that assure that these results are regularly and sustainably produced? Or, what approaches and tools do I deploy to achieve number 8, “Economize…” ? Again, are there tools and approaches available that assure the we meet number 13, “ENABLE everybody to optimize their individual and group contribution?” Continue readingFootnotes: