Jul 16, 2021 | Change, Collaboration, Operations
Nothing these days is done in one place, by one person, beginning to end. There is always a process in place, a chain of events that has to all work together in a co-ordinated manner to optimise the outcome.
We all know that old cliché, a chain is only as strong as its weakest link.
This is how it is with any process; it is limited in output by its weakest link.
Therefore, rather than spending resources in vain attempts to boost process performance by doubling down on the obvious bits that work well, find the weak link, fix it, then move on.
Eli Goldratt, the brain behind the Theory of Constraints, wrote a book called “The Goal” to articulate his theories in simple form. Boiled down in the book is a story of reverse engineering the process chain in a mythical factory. The management identifies the weakest link, works with it until it is no longer the weakest link, then moves on to the next identified target, now the weakest link in an improved process chain. This is an ongoing process of continuous improvement.
As Aiden Kavanagh, one of the best ‘Lean Thinking’ implementers I have seen in my travels put it succinctly in a comment on a previous post: ‘Tune the system to the pace of the bottle neck and make sure everything else has capacity to make sure the bottle neck never stops’
Is this how your improvement initiatives work, or are you continually making investments in new shiny things that always seem unable to deliver the promised outcomes?
Header photo courtesy of Daniel Stojanovic
Jun 17, 2021 | Lean, Management, Operations
Chasing improvements in an enterprise comes down to doing the small things well, every time, and continuously improving, generating a compounding effect.
The best way to achieve this is for everyone involved to be engaged in the process, have a stake in outcomes, and understand how they impact on others.
At every level, this is achieved, not by memo, or strategic planning, but by consistent, focussed verbal communication backed by facts.
Best way to do this is to communicate often.
Not a lot at one time, but small bite-sized chunks regularly.
Daily, weekly, monthly, and so on.
At the ‘coalface’, it should be daily, which leads us to the daily stand-up, huddle, group chat, or as one of my clients call it, ‘toolbox’. Whatever you choose to call it in your workplace, it plays a crucial role in performance management.
This is a daily meeting at the beginning of a day, shift, or whatever the work cycle is, that reviews the day to come, in the light of what happened yesterday, with some acknowledgement of what will be coming tomorrow, and perhaps the next day.
Why it works
- Daily communication keeps everyone on the same page, enables problems to be surfaced and addressed before they really hurt, escalated as necessary, and contributes enormously to a culture of communication and collaboration.
- They replace the one-to-one conversations that need to happen many times, with a one-to-many conversation. This saves time and energy, while ensuring the communication is the same to all parties.
- It enables focus on the priority activities, removing some of the day-to-day firefighting and craziness that always occurs.
- It also enables quick updates to larger objectives and relevant projects to be delivered, which removes the always present rumour mill. This works equally well for the positive things as it does for the negative.
- They lead to significantly engaged employees, as not only are they heard, but they can see the outcomes of their ideas and suggestions.
In these days of increasingly remote workforces, this daily get together takes on a much wider role, in reminding everyone that they are a part of a team, and others are relying on them.
What makes them work
- Same time, same place. Having the huddle, stand-up, whatever you choose to call it at the same time, in the same place, every day creates a cadence that drives activity. Start on time, finish on time.
- Sitting down will elongate the meeting, so stand. It might be in the workplace, often it is just outside the workplace, which adds credibility to the process.
- As short as possible, no more than 15 minutes should be an iron rule.
- Everyone gets a say. Engagement comes with being heard, and the chairman must ensure everyone is explicitly given the chance to have a say.
- This can take many forms and will vary with the level of the huddle. At the coal face, a whiteboard is usually sufficient, with perhaps a photo or copy taken and kept for reference for a short time. At higher levels, the recording will vary.
- Be on time, do not ramble when it is your turn to speak. Take any follow up or extended conversation offline, the huddle is to identify problems, address the molehills, but the mountains are for another place.
- Be respectful of time, others and the process. Be attentive, with no side conversations, or banter.
- Meeting chair. Someone must lead the meeting, have control of the conversations and agenda. That may be the same person every day, or it might rotate, which in my experience is the better way.
Usually very quickly there is a sense of team effort, and even the small wins become evident and can be celebrated. It is an incremental process, which once the ball is rolling, picks up momentum that is very hard to stop, even if you wanted to.
May 3, 2021 | Operations
I was asked a challenging question from the back of a seminar room a while ago, before the lockdown, at the end of a conversation about the importance of flow.
The questioner asked, and I quote: ‘I get the theoretical stuff, but how do I go about measuring flow in real life”
It is a good question, with a simple answer that is challenging to implement. It is all about the approach taken to measurement.
The more granular the measurement the better, but the Pareto rule applies. It is also sensible to bother measuring only things that can be changed to improve performance in some way. Measuring for the sake of measuring without the intention to manage by the results only feeds vanity and ego.
The two core measures of flow are:
In my experience, these two parameters are core to every process, in every business. Manufacturing is where they are most obvious, but they apply equally to service businesses.
While these two items are intimately connected, measuring separately enables improvement.
Inventory comes in many forms. Finished goods, Work in progress, raw materials, and in the case of service providers, projects and tasks that are waiting, being done, or completed but not delivered. In some cases, it will be measured in dollars, others, in units of some sort. Granularity enables greater scope for optimisation. For example, a factory with 3 stations in a line that has 3,000 units of WIP, 500 at the first station, none at the second, and 2,500 at the third, clearly has an impediment of some sort at the third station that requires investigation, and improvement.
Cycle time is the time it takes to move inventory from one point in the process to the next. Again, this can be measured for a whole process, or individual parts of the process.
Comparing the cycle times and inventory numbers, will give you a measure of line, or part line throughput, and therefore the productivity, and will highlight the opportunity to remove waste, and generate improved ‘flow’
This sort of analysis of flow is as valid in a management process as it is in a factory.
For example: In a sense, your debtors ledger is inventory. The faster you can get paid, the lower the ‘debtors inventory’ the better the financial results. So, ask yourself how you get paid faster?
You ensure invoices are sent with goods.
You maintain constant and friendly relationships with customers.
You send a reminder a few days before the invoice is due to be paid with a thank you in advance for paying on time.
You ‘deselect’ customers who habitually do not pay on time.
Applying the discipline of ‘Inventory’ and ‘Flow’ to every part of an enterprise will radically improve results.
None of this is too complex for even a modest business. The challenge is to give it the priority it deserves, collect the data, and implement progressively. Incremental improvements compound over time to deliver significant improvement in financial and strategic outcomes.
The header photo is of the Alligator river in NT. It flows unencumbered.
Apr 16, 2021 | Analytics, Change, Operations
‘Digitisation’ like many other ‘ation’ words has become a cliché, thrown around with no specific meaning that is consistent and generally understood.
It has many parts, ‘Industry 4.0’, IoT, AI, AR, and so on, but what do you have to do to ‘Digitise’? It is way more than upgrading your ERP and CRM systems, it requires wholesale change from the way most businesses have evolved.
Following is a partial list, gleaned from those with whom I work, and the experience that has come from those interactions.
Have a goal. Like any journey, digitisation is nothing without a goal, something to work towards and measure progress against.
Leaders walk the walk. Again, generic advice for any behaviour you want to see in an organisation, it will be absent unless the leadership displays it. An enterprise that aspires to ‘digitise’ when the leadership stubbornly refuses to digitise themselves, will not see much progress down the ranks.
Recognise digital is a culture, not a set of tools. Tweaking current business models and tool sets will not be enough, there needs to be a change in the way the enterprise engages with the world and manages itself.
Customers first. Success has always come to those who put customers first, but it has never been as apparent and such a source of competitive advantage as it is now. When a customer can actually see you putting them first, or not, they are able to make quick choices. They will either become your extended marketing team, or if not happy with you, potentially do a lot of damage.
Do not adapt, adopt. Adding bits on, making a hybrid, as you would when you extend your house, will not work. You must design the digital experience inside and out from the ground up with the objective as the guiding light.
Employee power. We are talking about harnessing the intellectual power and motivation of stakeholders, and particularly employees in this exercise, without whom, it is no better than window dressing. Empowering employees is a core part of the culture change required; they go hand in hand.
Collaboration and co-creation. Progress is increasingly being achieved by ecosystems, rather than enterprises on their own. Figuring out how you collaborate to compete is necessary.
Kill the legacy. Legacy systems only hold you back, you must be prepared to move them on as you would an old piece of equipment in the factory. Often legacy systems work well, you are comfortable with them, but they no longer offer the key ingredient to digitisation, the ability to communicate with other systems and deliver useable, leverageable data.
Make it measurable. As in any project, being able to measure progress towards the goal, ensures resources are allocated appropriately, and that accountabilities are clear is essential to progress.
None of this is easy. Anyone who tells you it is has never done it. It is however essential, and like everything that is new, it pays to take small steps first, gain some confidence, understand better the costs and benefits, find some skilled help, and keep moving forward.
Header cartoon credit: Dilbert once again delivers enduring wisdom.
Apr 8, 2021 | Leadership, Management, Operations
Have you ever started to read a book, and decided to miss chapter 1?
I guess few ever have.
Miss chapter one, and you miss the foundation of what is to come. It is the first impression, creates the context in which the book is set, irrespective of it being fiction or non-fiction.
Why then do most businesses and their advisors not read chapter 1 of the business improvement handbook?
I know they do not, simply because Cash is such a low priority in these conversations. It is left behind by management clichés and fluffy words about visions and missions.
These things are all important, but in the absence of cash, beyond reach.
How much cash does it take to run your business?
How long is your cash conversion cycle?
What are the sources of the cash you are using?
What are the trends in your free cash flow?
These should be chapter 1 of the business improvement handbook.
When you know the answers, you can move on to the things you can do better to free up more cash, then to the operational, customer and strategic challenges being faced, knowing how much cash you have at your disposal to address these challenges.
Let me know when you need some experienced assistance sorting all this out.
Mar 8, 2021 | Analytics, Governance, Operations
One of the significant problems in making any change is the articulation of the need to change, and the outcomes that are expected as a result.
Overcome those two, and change is suddenly easier, albeit still really hard.
The first hurdle is the articulation.
In order to communicate and have complex ideas generally understood, you do not use technical, academic jargon backed by data, you use stories and metaphors in a way that connects with the audience.
Communicating industry 4.0 is such a complex challenge.
What is it, how will it affect me, why should I be interested?
Answering these questions is a core foundation of gaining acceptance, followed by action that becomes automatic as it gets buried in the auto-response system.
Remember the last time you put your hand onto a hot stove.
Before you felt anything, you had reacted by pulling your hand away, a totally unconscious, instantaneous, action then, it started to hurt like hell.
Think about the processes involved in this.
First: the ‘data’ that indicated the stove was hot was collected by the nerves in your fingers and hand.
Second: the ‘data’ is sent for processing to your brain, the CPU between your ears. This processing concludes your hand is in danger of being burnt.
Third: That conclusion is sent to the muscles that control where your hand is, with firm instructions to remove it immediately.
Fourth: Your hand is pulled back out of danger.
Fifth: It starts to hurt like hell, and the memory of that hurt is stored deep in your personal CPU for future reference should your hand stray again.
The astonishing thing is that the first four happen without thought, instantaneously, and the fifth is a long term ‘frame’ through which you unconsciously ‘feel’ the hurt and approach the stove warily. It is a neural network that collaborates, communicates, drives action, and learns.
Industry, or more specifically, Factory 4.0 is, similarly, a set of tools that collects, analyses and acts on data without direction, and learns from the experience, adding to the auto-response ‘memory bank’ and adjusted based on the ‘learning’ that occurs as data on outcomes is collected. The system becomes more Automatic than Artificial.
Header cartoon credit: Tom Gauld in ‘New Scientist’ magazine.
