Tag Archives: Scorecard

Successful Lean Implementation is satisfying- darronrobertsconsulting

Some consulting projects start quickly from the initial client contact to the project kick off; some take considerably longer.  I first made contact with this current client through an invitation to visit them based on a recommendation of a colleague in a neighbouring business where I had successfully  completed a project; that was September 2008.  After visiting the company discussing the requirements with the owners, interviewing the managers and spending time visiting the shop floor, I produced a proposal for a Lean Manufacturing implementation project.  Various difficulties within the company resulted in the project kicking off in December 2010.  In that time I kept regular contact with them, helped them through different funding options, staff recruitment and gave them advice, knowing that I would win the project when the time was right.

The company is a large manufacturing business producing products for local and multinational F.M.C.G. and food industries. There are five operation processes from raw material conversion to finished product.  Initially, while the company were making big profits, they were inefficient in their production, wasteful of resources, even more wasteful of raw materials and weak on front line management.  The efficiency of the business  was measured in terms of the Key Performance Indicator, (KPI),  Overall Equipment Effectiveness, (OEE), which on a scale of zero to one hundred, they were in the mid-twenties.  Work needed to be done there.

There were two major problems in keeping the efficiency low, the incentive bonus scheme was wrong and the planning was weak.  Operators were getting paid for working at one quarter efficiency and then getting bonus payments on top of this for hitting specified machine speeds.  There was no incentive to improve their productivity, linked to the weak first line supervision, no reason to make them.  The planning issue compounded the inefficiency, planning was basically a weekly  list given to the each department.  The department chose the order that they produced in, which in itself is fine if it is customer focussed, not fine when it was used to make the operators lives which were easy, even easier.

My projects are based on people, many companies are more than willing than willing to spend millions on equipment and then neglect their most valuable assets, their people, this company were no different.  The project starts with interactive workshops, for management and for supervisors, producing the same results with the message delivered in different ways.  So the project begins in earnest “Top Down – Bottom UP”  Managers have to start managing and taking responsibility for the business; the supervisors have to start interacting with the shop floor operators and implementing the new Lean ways of working.

We taught the basics of Lean Manufacturing, the building blocks of continuous improvement, 5S, 7 wastes, Visual Control / Visual Management and Standardised Working, one at a time in a focussed area.  The learning’s were rolled out to the rest of the plant when tangible results had been gained.  Also introduced was a business scorecard to measure five KPIs.  Each of these KPIs were given an owner, responsible initially for measuring and displaying the data.   This was not as easy as it sounds, the senior management wanted us to improve them, but they were not giving really getting involved, the were watching from a distance.  So in this case I could not create a crisis.  There were times when there were mutinies, actions were not being completed because supervisors did not see the value in making operators do different things to what they currently were doing!  What was really happening was that they were unable to manage their people.  This is where Management Consultants are required, shop floor actions, me doing what I was asking the operators to do, easy.  Then reinforcement, follow up and measurement.

After the basics had been partially implemented, the measured KPIs were moving in the right direction and there was more of a culture of acceptance of new ideas, the management took a big step and altered the incentive bonus system.  They did not go as far as they needed  to do but increased the set targets. This was an improvement, but needs revision at a later date.

So I have just conducted the third quarter review.  The efficiency has more than doubled.  I will expand this, there is more than twice the amount of finished goods produced in the same time, with the same resources!  This means that the fixed cost per product is halved.  One of the five process has been totally eliminated by a team modifying a previous process.  There is a real twenty-five percent reduction in the manufacturing lead time.  The expanded set of KPIs are improving, there are enhanced business systems, the ISO procedures are actually implemented and used not just stuck on a shelf collecting dust.  Managers are starting to manage and supervisors are now active in the operation and developing and improving the business.   The Return On Investment, (ROI), for the cost of the project was less than six months!

The is still much to be done, the next step is for the company to take control of the planning system.  They have to use their visual management system to monitor the performance hour by hour and take action when there are problems.  This allied to the fact that the senior managers are now getting involved in the project will give a huge boost to the company’s efficiency.

So back to the title, “Successful Lean Implementation is satisfying”, it gives me great pleasure to see business take on board the consulting advice that I give them and really improve their business.  I am not a consultant that does everything for the client, I am a consultant that teaches the client to do things for themselves, guided of course , in the direction that I want them to take.  The biggest joy is seeing the people develop both personally and professionally.  I had to work hard to win this project, saying that, the results so far were well worth the effort.

Business Performance Management – Deployment – darronrobertsconsulting

When I was specifying a Management Consulting project about eighteen months ago, one of the topics that needed that need to be covered was Business Performance Management or Deployment of Objectives. I had worked with the company for a year and understood what they wanted. To grow, both organically by increasing sales of the current product families and to diversify their product portfolio.

I had planned to develop a typical Business Scorecard, encompassing the four different categories of business, Finance, Customers, People and Processes, with sixteen to twenty Key Performance Indicators (KPIs), split between the categories. Each of the KPIs would have an accountable owner and a responsible person for producing the monthly results.

The Reporting structure would have been developed, whereby each of the Business Functions would hold weekly Plan – Do – Review (PDR) meeting. The KPIs were to be broken down in to departmental measures and deployed through this Action meeting. The results would then be measured and displayed in their Visual Management area, with a simple Visual traffic light decal to quickly indicate the status. The monthly departmental report would have been written and sent to the company secretary to compile the agenda for the Monthly Management Meeting, (3M).

The 3M would be held at the same time, the same day and the same week of each month. The meeting would have been attended by Senior Managers and Department Managers. This would have been an action meeting whereby the Business Scorecard would have been discussed with actions required to bring the KPI back on target or actions required to take advantage of the better than target performance would have been taken outside of the meeting to be deployed. The meeting minutes would have been written and discussed at the next departmental PDR meeting.

What has happened in reality, here in the Middle East, is that we have had the Revolutions and an Arab Spring. The face of business has changed for the near future at least. All thoughts and plans for growth have been postponed, some indefinitely. There is an on-going pessimistic feeling which is adversely affecting business in some parts of the region.

The strategy is now for one of survival, of reducing costs and becoming very efficient, producing orders as quickly as possible and getting them to the customer ontime, to reduce the time of the cash flow cycle. Weekly and monthly meetings have become daily meetings, such is the necessity of the situation. Survival means becoming the best there is in a shrinking market and having enough funds to continue.

This illustrates that the Business Performance Management process is dynamic, both for business who have to change their Strategy quickly to survive and for the Management Consultants, like myself who have to be able to respond to the client’s needs and provide them with the Consulting Expertise to enable them to adapt to the situation.

The only positive to be taken out of this situation is that if the company survives, the actions taken will definitely make it stronger and it will be better prepared for business after this crisis has ended.