COMPETITIVE KNOWLEDGE
NEWSLETTER
Let's get to it:
JIT Manufacturing
The business turnaround is inevitable … Will your
continuous improvement activities yield profit margin gains?
Senior managers at large multinational companies are feeling a bit more
bullish about the future, reports PricewaterhouseCoopers in its new
"Management Barometer." The 171 CFOs and managing directors
interviewed said they expect profit margins to grow an average 6 percent
over the next 12 months. They also projected an increase in major new
capital investments representing an average of 9.9 percent of revenues.
"We may have seen the turning point in the recession in the fourth
quarter of 2001, with optimism on the upswing and executives predicting
expansion," says Frank Brown, global leader for Assurance and
Business Advisory Services.
JIT Manufacturing
And, this from the January Manufacturing ISM Report On Business®.
"The overall picture shows improvement in manufacturing activity
during the month of January. While the manufacturing decline is now in its
18th month, some
industries are starting to show significant signs of recovery as both new
orders and new export orders are improving."
Whether the manufacturing economy pulls out of its recession in the first
or second half of 2002, manufacturers that prepare for the upturn will be
the winners. Now is not too early to start your preparation for the
inevitable business turnaround.
To take advantage of the business upturn, you need to prepare now and the
Kaizen Based Lean Manufacturing™ e-Tutorial can help you and your
manufacturing team:
- Gain/maintain control of
operations during the upturn
- Achieve linear production
during order increases
- Sustain quality improvements
while increasing speed
- Lower stress level when
faced with growth challenges
- Make a difference
by contributing to company's bottom line
- Earn performance recognition and
rewards by exceeding
expectations
If you're already implementing lean manufacturing,
you'll gain many tips on how to optimize your progress. If you haven't
started, there is no better way to start than with the proven approach
found in our Kaizen Based Lean
Manufacturing™ e-Tutorial.
KBLM structures eight lean manufacturing basics as kaizen targets. Like
Vince Lombardi, who achieved success by having his team focus on the
mastery of football basics … now you can achieve success by having your
team master the basics of lean manufacturing.
Your e-tutorial comes both as a hard copy "trainer's guide" and
a CD-ROM capable of delivering lean manufacturing
e-learning…anywhere…anytime…to anyone. It contains powerful,
real-world experiences presented via 171 reproducible PowerPoint® colored
slides. These slides are made even more
powerful with expert "real-world" explanations and comments. It
is by far the best learning aid you can give your people to help them
prepare for the business turnaround.
To take advantage of the business upturn, we need to get back to basics
fast and re energize our lean manufacturing efforts. The Kaizen Based Lean
Manufacturing™ e-Tutorial will help you put in place a game plan to
optimize your performance during the business recovery. It's unique
techniques and methodology separate manufacturing winners from the
also-ran. Consider these four simple questions.
- Do you want to exceed growth and profit expectations
during the upturn?
- Do you want to avoid shop floor chaos during the
business
turnaround?
- Do you want to eliminate "end of the month"
scrambling?
- Do you want an effective performance recognition and
reward process?
If you answered yes, go to the below Webpage for a
special one time, subscribers only offer, go there now …
Lean Production
JIT Manufacturing
You are welcome to print and share this newsletter with your business
associates. We have indexed and archived this and all previous newsletters
for your reference. The below URL link will take your there:
http://www.bbasicsllc.com/ckn.htm
This newsletter has reached your desk because I think we share a common
objective---to help manufacturing teams avoid "burnout" while
achieving their full performance potential. If this is not the case,
simply send a blank email to leave-ckn@charliepage.com
and enter "unsubscribe" as the subject of your email and you
will be removed from our mailing list.
Enjoy,
Bill Gaw
bg@bbasicsllc.com
JIT Manufacturing
COMPETITIVE KNOWLEDGE
NEWSLETTER (CKN)
--- FEBRUARY 2002---
1. How
to Exceed Performance Expectations
2. What is Your Plumbline?
3. More Than Just
"Happy Thinking"
4. What's Your Game Plan?
5. The Hard Part is Change
Production Control Practices for Winners
How
to Exceed Performance Expectations
By Bill Gaw
The beginning of a new year is a good time to take stock, to determine
what you can do to improve your company's performance in the coming
months.
In today's competitive business environment, it takes more than quick
fixes, outsourcing and downsizing for companies to consistently achieve
their growth and profit objectives. While these options may yield
temporary financial relief, they will not lead the way to long-term
business success. For businesses to consistently exceed growth and profit
expectations, they need to fully understand and effectively execute the
business basics of profitable growth.
While many elements of these basics have been documented
and presented in hundreds of management articles, books, video
presentations and seminars, their fundamental relationship and synergistic
importance to achieving solid growth and healthy profits has not been
effectively defined and communicated.
Over the past 30 years, we were led to believe that computerized systems
would provide the solution to all our growth and profit problems. In
manufacturing and distribution, systems like ERP were to provide the
computer sophistication to significantly improve our delivery chain
performance. In engineering, Computer Aided Design (CAD) systems were to
be the high-tech innovation for improving engineering design and speeding
the time-to-market process. In sales/service, Microsoft Office was to
provide the
missing link in effective business communications while e-commerce
software was to improve order sales capture rates and order processing
speed.
In their efforts to draw closer to customers, many business management
teams have lost focus on what should be a company's primary success
target-- profitable growth. They have pursued Total Quality Management
(TQM), Enterprise Resource Planning (ERP), Business Process Reengineering
(BPR), ISO-9000, and Six Sigma with each respective guru
reassuring them that if they followed their program ... the bottom-line
would take care of itself.
Well, it hasn't happened! Like most perceived panaceas, each of these
programs received a lot of hype but produced few success stories. While
these programs contributed to better quality and improved customer
service, they accomplished little towards helping companies identify and
achieve their full growth and profit potentials.
For a measure of their shortcomings, one needs only to spend some time in
a manufacturing facility -- especially during the last weeks of the final
financial quarter. In a typical company, you'll find that converting the
quarterly financial forecast into reality still requires costly overtime,
internal/external expediting, last minute "on-the-run" product
changes and even a little "smoke and mirrors." Results are
scrap, rework and warrantee costs that negatively impact profitability and
production problems that hinder growth.
Companies have spent many thousands of dollars in
pursuing MRP/ERP and ISO-9000 certification, only to see their business
decline due to uncontrolled operating costs that produced noncompetitive
pricing. Other companies have won the Malcolm Baldrige Award for Quality
and Business Excellence and subsequently fell far short of achieving
growth and earnings expectations.
So, after introducing all these computer systems and more, why is it that
most businesses are still struggling to sustain profitable growth and are
no where close to achieving their full growth and profit potentials? The
first reason is simple --the results achieved by any computer system are
only as good as the people at the controls and the integrity of the data
they provide.
The second is complex -- most business managers
facing major day-to-day problems and constraints adopt a totally reactive
management style. Consequently, their time is consumed with
"band-aiding" and/or finding ways to work around system and
process problems -- leaving them little or no time to analyze and
eliminate the root causes of ineffective systems and processes.
How does one turn around such a classic, "cart before the horse"
syndrome? What's required is a top down, in-depth understanding of the
fundamental importance of the business basics of profitable growth and a
total commitment to their consistent and tenacious implementation.
Like Vince Lombardi, who achieved success by having his team focus on the
mastery of football basics -- we need to have our business teams focus on
the mastery of business basics. Proactive planning and tenacious execution
of the basics requires leadership above and beyond just satisfying
"day-to- day" accountabilities. Some managers can't envision the
benefits of mastering business basics, other simply can't find the time.
Like practicing blocking and tackling in football, it's not glamorous, and
like most football heroes, managers prefer to run with the ball. But
without the tenacious and flawless execution of business basics, companies
will never achieve their full potential.
While many business gurus have identified one or more of these business
basics as important to the successful pursuit of business excellence, the
fundamental importance of these basics has been lost in the proliferation
of buzz words and the mania of systems sophistication. It is time for
companies to put a hold on sophisticated systems development that cause
self-inflicted, day-to-day chaos. In its place, they should immediately
initiate an action learning program for gaining a company wide
understanding and acceptance of the importance of business basics.
Once buy-in and commitment have been achieved,
aggressive planning and
tenacious implementation must follow. In short, let's put the "horse
before the cart" -- such a program will build a solid foundation for
redefining and revitalizing a company's pursuit of growth and profits.
What are these business basics and how does one go about mastering them?
For starters, you can go to our CKN Archives and reread the articles on
the eight-basics of "Kaizen Based Lean Manufacturing™."
They're free and only a click away at:
http://bbasicsllc.com/ckn.htm.
Next you'll need to institute an educational program for your business
teams. To obtain advanced training materials to help structure your
company's "Return to Basics" e-learning program, check out our
e-tutorials at:
http://bbasicsllc.com
Production Control Practices for Winners
What
is Your Plumbline?
When homebuilders begin constructing a new house, they run a plumbline.
The plumbline tells the builder, during each phase of construction,
whether or not he or she is on target in the most important area of all.
Is the house square?
If the builder forgets to check the plumbline, or disregards it
completely, all of their hard work will be in vain.
What is your plumbline? Is YOUR house square? It's all too easy, in the
rush to produce orders or make quotas, to forget WHY we do what we do.
While there are a number of core values that can act as excellent 'plumblines',
let's look together at three of the most common.
1. Quality
Is quality at the core of your values? If not, you may end up with the
'quick buck' and no more. To build a lasting business, quality must be
your mainstay. When cars from Japan began to dominate the American
landscape, there was considerable uproar over "Buying American".
Even against the tide of such strong emotions, Japan won the day and
successfully sold (then produced) their cars here. Why did this happen?
Quality. When quality issues become 'front burner' issues, few obstacles
can hold us back.
2. Profits
Why are you in business? If you said "To make a profit" you're
right. Even companies which were founded for purely altruistic reasons
must meet certain bottom-line considerations or they will be forced to
stop providing goods and services. While sentiments like "I don't
care what it costs, just do it!" sound good in the movies, the real
world calls for very careful financial stewardship. How straight is your
financial plumbline this quarter?
3. Customer Service
Customer service can be tough to define, much less measure. Yet define and
measure it we must. Do you KNOW how your customers feel about the service
you provide them? If not, try asking them. In an increasingly competitive
world, losing customers is bad business. We hear that it costs at least
four times more to make a customer than to keep one. Why would anyone be
cavalier in this area? It's interesting to note that companies who could
arguably afford to lose a customer or two (Wal-Mart and McDonalds spring
to mind) go well out of their way to avoid losing even one customer.
Customer service never costs, it pays.
Whether it's the first of the year or the first of the day, knowing how
straightly your plumbline is hanging, and taking immediate action if it
gets off-center, is good business indeed.
Production Control Practices for Winners
More
Than Just "Happy Thinking"
The economic climate today is very real indeed. Real people are losing
real jobs. Corporations are seeing very real drops in their bottom
line.
No one need remind us that manufacturing is in it's 18 month of decline.
Yet there are voices in the land that tell us to simply whistle a happy
tune and all will be well.
FACT: It's just NOT that simple.
While it is always a good idea to maintain a positive attitude, what does
it take to navigate through hard times?
There are many factors involved in succeeding during difficult time. Begin
with these three and you will be well on your way.
1. How is your focus? It's all too easy to
lose focus in tough times. The question today is WHERE is your focus. Are
you focusing on the problem, the solution or how this challenge effects
your goals.
Henry Ford once said "Obstacles are those frightful things you see
when you take your eyes off your goal." It was true when he said it
and it's good thinking in 2002 as well.
2. How is your energy? This is an area that
people often miss. Are you so beaten down by circumstances that you barely
get through the day? If so, join an ever-growing crowd. Elongated times of
difficulty (and 18 months more than qualifies) WEAR on us. They rob us of
the energy and enthusiasm for problem solving that we once had. The good
news? Our mental energy is a renewable resource. Take some time today to
evaluate yourself in this area. We've all heard about the miner who stops
three feet short of the rich vein of gold. It's easy to become that miner
when all you do every day is pound the rocks.
3. How is your execution? Have you let more
costly workers go in order to trim expense? Have you eliminated positions
and consolidated responsibilities? We make these moves knowing there may
be a performance effect, but sometimes we fail to follow up and measure
that effect. If this describes you, take action today to find out exactly
where you stand.
While 'happy thinking' alone will not solve real world problems, attacking
those problems methodically (and with a can-do attitude) will equip us
with the information needed to change for the better.
Production Control Practices for Winners
What's
Your Game Plan?
"When things get tough, the tough get
going."
"Whether you think that you can, or that you
can't, you are usually right."
"A good offense is the best defense."
What is the common denominator in these three sayings?
If you said they are all clichés, you are right. If you said all are
true, move to the head of the class.
Let's look at each in turn and see what impact these mindsets might have
on your business.
1. "When things get tough, the tough get
going."
It may sound trite, but HOW and HOW FAST you respond to changes often
determines the outcome of that change. When downturns come, what is your
company's reaction? Do you bury your head in the sand and hope it will go
away? Do you hold endless meetings to analyze and discuss the problems.
Or do you boldly formulate a plan and take decisive action?
Companies who prosper in a downturn engage in strategic thinking, make
plans and allocate resources, evaluate those plans and budgets, and do
everything they can to maintain as much market share as possible given the
new realities they face. Does that describe your company?
2. "Whether you think that you can, or that you
can't, you are usually right."
Let's be realistic. You know that no amount of happy thinking will
magically solve problems. Yet having a positive outlook and forward
looking goals are vital to success and employee moral. It is critical to
communicate to employees that you know the reality of the downturn, have
made plans to adjust, and are confident of a successful outcome. If your
company is suffering from employee morale problems, consider if you have
communicated this message as thoroughly and as often as possible.
3. "A good offense is the best defense."
When times get tough, companies can often fall into a defensive posture.
Few companies indeed can survive, much less thrive, when their focus is on
keeping what they have now vs. going out and getting more.
Playing offense works. Even if you have to trim budgets, staff and
production, stay forward thinking.
Companies on the offense are always looking for opportunity. When they see
opportunity, whether it's the opportunity to move into new markets or
reduce spending, they aggressively move toward the opportunity.
A company playing defense says no to these new opportunities with the
rallying call of "focusing on their core business". While core
focus is important, so is being opportunity minded. Opportunity minded
companies are brought more ideas and, at the end of the day, have
more options.
Which company sounds like success to you?
While taking these three ways of thinking won't change the reality that
people are buying less, they can change how your company responds to
market conditions. During a downturn, that may be one of the most
important changes that you can make.
Production Control Practices for Winners
The
Hard Part is Change
As business people there are many things we have in common. We are all
pursuing profits. We all make budgets and plans. We all occasionally
review our performance to see where we can do better. We manage employees,
balance inventory levels and are responsible for a wide variety of tasks.
Yet the thing we manage most was never part of our job description.
Often, what we really manage is change.
Each one of us will manage change this year. These changes will force us
to make many decisions, some of which we did not anticipate making.
Preparing for those decisions is vital to our success.
Far more difficult that the most difficult worker we will ever regret
hiring, change is very hard to manage. We live in an era of change. Change
seems to be everywhere, from the 'geeks' we hire to run our computers, to
the computers we buy to run our warehouse operations, very few things are
the same today as they were in 1999.
While change is inevitable, it can be managed. How can we best manage
change? While there are no pat answers, these three tips may help.
1. Know the facts. How many times have we
been promised nothing short of the promised land only to be disappointed
by the results? We must listen less to sale reps and more to our own
analysis of the information presented.
2. Only change when not changing costs you money. Change
for the sake of change is foolishness in most cases. So what if company X
has the latest RX 2002 Turbo? You may not have the RX, but do you have a
healthy bottom line? How's your long term debt looking? Are your
production ratios in order? Are your customers happy? The answer to these
(and other) questions may uncover the need for the RX, but unless they do,
keep the brochures filed
away.
3. Know yourself and your company's tolerance level
for change. Each company has a 'stamina' for change. Beyond a
certain point, we simply can't go on effectively. Change doesn't happen
overnight. When you do plan a
change, there is a period of waiting before the change takes place. Then
there is another period of waiting before the change becomes profitable.
When change is forced upon you, there can be a period of chaos before
work flow returns to normal. Are you prepared for these periods? How will
your profits be affected when these things happen to you? Is there
anything you can do to shorten these waiting periods?
When it comes to change, knowledge is power. The more you know, the better
the quality of your decision will be. Let your decisions about change be
bottom-line driven, made with full knowledge of all the options, and made
in harmony with your individual style. When you manage change in this way,
change may become your closest ally.
