Tag Archives: Strategy

Is the start of a Lean Project actually Lean?- darronrobertsconsulting

After the initial scoping meeting with a new client, the next stage is the detailed analysis of the business, the Diagnosis.  If the scope of the project is operations optimisation and the tool to use is Lean Manufacturing, then I analyse the company from their Key Performance Indicators (KPIs).  Analysing the financial KPIs, profit and costs, the operational KPIs, Safety measures, Output measures, Efficiency measure, Quality measures and People measures.  I sometimes conduct a full business assessment, answering questions as to how the company is setup, the policies and procedures, how it treats its people, how it plans, purchases delivers, develops new products, is concerned with longevity, safety and the environment.

All of the analysis tells me what the company does, not how it does it.  To find the answer to this question requires spending as much time with the managers, supervisor and operators as possible.  There are always three different and sometimes conflicting views between the layers as what is actually happening in the company.  There is nearly always a deficiency in the communication system between the managers and operators.  The manager sends out a message but if it reaches the operator it is different or toned down from the original.  There is also the case of managers and supervisors being in positions from promotions, where they are not qualified to undertake the role and are not aligned with the strategic objectives.  They are doing a job, which is consistent and probably the same way they were trained by their predecessor, but which does not improve the business.

All of the above information leads me to design the project, the topics to be covered, the order of the topics the timescale and the cost of the project.  There are usually topics covered that are nothing to do with Lean Manufacturing, just good operations management and these can cover a quarter of the twelve month project run in parallel and sometimes hidden inside the other project tools.

It is necessary to align sales requirements with planning and planning with operations and the whole system to business needs.  Sounds basic?  Does not always follow as it should.  Assumptions are made that information that is send is used as it is sent, departments have different thoughts on the information and act upon what they think is right, which produces results, apparently shows efficiency but does not align with the business needs.  This is an example of one business, a steel manufacturer. Sales department were working hard to win business in what had turned into a commodity product.  The KPIs from the mill are apparently good, efficiency is in the ninety percent range but delivery performance is in the forty percent range.  There is an Operations Director, Works Manager, Area Production Managers along with Shift Managers to supervise the operators.  There is a Logistics department that contains planners using and ERP system and manual scheduling.  The problem was twofold, the business linked bonus payments to tonnage and the planners took the sales requirements and gave weekly lists to the mills rather than actually planning what was to be produced to deliver on time.  The actual problem was that the mill operators chose what to do in the order they wanted to maximise their earnings.  They used the system to their needs and not the needs of the business.  When these problems were understood and addressed the company became a little less efficient, delivery performance increase, there were more orders, the cash flow system became more efficient, profits increased and the company had a good scheduling and reporting system.

While each case is different, the general problems are quite similar.  The question is why is there no self-improvement?  From personal experience I know that when you are in a position you are blinkered and you are doing what you think is best.  You are performing to the measures and expectations put on you by you manager and change only when these measures, expectations or even manager change.  This should be a Directors role, to align the business to the business strategy, even a manager should assess his performance against the business need.  The other question to be asked is there a strategy?  Not just the vision and mission posted on the wall but a real business plan, implemented to shop floor level.  Why are the training needs of employees not recognised and addressed?  Until there is a crisis are companies happy to continue with what they have.

I have tried to answer some of these questions based on my business experience and have come to the conclusion that businesses are not perfect, even multinationals making vast profits.  These companies could be even more successful if they concentrate on doing some of the basics right before concentration on more advanced business enhancements.

So back to my original question, “Is the start of a Lean Project really Lean?” and the answer has to be no.  It is organising the company, enhancing its communication system, aligning its departments with customer needs and instruction its employees in their duties.

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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.