COMPETITIVE KNOWLEDGE NEWSLETTER 

Let's get to it:

It's a lot like hitting your head against the wall and wondering why you can't get rid of the headache. It's amazing how many companies still think that the answer to eliminating end-of-the-month surprises is more systems sophistication.

Good computer software salespersons find their best prospects amongst the companies that are experiencing factory scrap, excessive rework, high warrantee costs and customer complaints. These companies are usually
experiencing late customer shipments, low or no growth, diminishing profit margins and missed financial expectations. End-of-the-month surprises are a common occurrence.

With such problems, most companies are easy prey for the sales pitch "Our system will fix all." But what do factory chaos, end-of-the-month scrambling and missed growth and profit expectations have in common? If we do a root cause analysis, systems software will most likely score last on the Pareto Chart.

So why is it that so many companies jump to the conclusion that system sophistication is the panacea for their problems? Good salesmanship! Let's stop banging our heads against the wall.

If not software, what is the answer to these seemingly unsolvable problems? My lead article today identifies what usually appears at the top of a root cause Pareto analysis chart along with some of the techniques for improving
relevant performance and results.

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 CLICK THE LINK at
the bottom of this newsletter and you will be removed from our mailing list.

Enjoy,

Bill Gaw 

Balanced Scorecard Example

COMPETITIVE KNOWLEDGE NEWSLETTER
---- MAY 2002 ---

1. The Root Cause of Poor Systems Performance
2. Conduct a Survey to Discover Core Issues
3. Know When to Respond
4. Tame the Email Monster
5. Developing Sales Resistance

1. The Root Cause of Poor Systems Performance

MRPII/ERP System objectives cannot be achieved when day-to-day production and manufacturing control systems are driven by inaccurate, untimely and uncontrolled data and/or documentation.

If your company is typical, you'll find that converting the monthly financial forecast into reality still requires overtime, costly expediting, expensive "on-the-run" product changes and even a little "smoke and mirrors." With all the available sophisticated computerized systems, why is it so?

The answer lies in what's missing and has nothing to do with the quality of the system designs. Like Vince Lombardi, who focused his team on the mastering of football basics ... we need to focus our teams on the mastering of business basics.


There are Eight-Basics of Kaizen Based Lean Manufacturing, but when it comes to improving systems performance, "Information Integrity" is the most important. We call it KBLM Basic #001, "Infotegrity" ... the ability to communicate data and documentation completely, accurately and in a timely manner.

Like blocking and tackling in football, it's not glamorous and few want to do it ... but without tenacious and flawless continuous improvement and execution, manufacturing performance can never be optimized.

Infotegrity is crucial to computerized master scheduling and MRP computations. Excessive MRP rescheduling of released orders is costly and disruptive and is usually driven by poor input data. To improve the quality of MRP "rescheduling" messages, one materials manager focused on improving the integrity of MRP inputs. She reduced the frequency of their MRP "regeneration" and implemented a mandatory weekly review/purge/reset of all purchase and production "open" order status.

The results were amazing; reschedule messages were reduced by 85% and her planner/buyers gained time to do additional proactive parameter maintenance. Because of increased scheduling stability, there was a significant improvement in both supplier and shop On Time deliveries.

A good example of the importance of Infotegrity is the "eye-opening" result of the cumulative effect of data inputs in a computerized order release and scheduling system such as MRP. There are at least ten data input files that drive such systems with data accuracy indexes varying between 90% and
100%. Statistically, their cumulative effect (the product of their values) could yield a devastating, order release accuracy of 68.2%. That translates into a cumulative 31.8% error rate in the order release and scheduling process. In
spite of this huge constraint, American ingenuity and energy still gets the job done ... but at what costs?

Although many business gurus have identified data accuracy as important in the implementation of computerized systems, their message has been lost in the mania of systems sophistication. To remain competitive in the future,
manufacturers must improve the results gained from their business systems investments ... to do this, the fine-tuning of Infotegrity is a "must do." How do companies accomplish this task?

Here are a few of their techniques:

>>> Simplify data bases - making it easy and routine to keep data correct     and up to date.
>>> "Bulletproof" system parameter maintenance - helping to eliminate mistakes.
>>> Streamline and discipline the product documentation process - doing it right the first time.
>>> Real time auditing and corrective actions ... keeping information current and correct.
>>> Employ the right tools - point-of-use logistics, back-flushing, and the Internet.
>>> Establish the right mindset ... the quality of decision-making is dependent on Infotegrity.

Competition is getting tougher and tougher as each year passes. If we don't want our competitors to close in on our markets, we need to continuously improve product/service quality, increase productivity, lower costs and increase speed of new product introductions.

To maintain ones' competitive edge into the future, management's focus must be shifted from systems sophistication to systems Infotegrity. In short, its time to put the "horse before the cart." Information Integrity is no panacea, however, I'm convinced that a company with simple, unsophisticated systems and a high level of Infotegrity will outperform a company that has sophisticated systems and low Infotegrity. What about those company that have both? I buy their stock! 

Balanced Scorecard Example for Winners

2. Conduct a Survey to Discover Core Issues

Sometimes it is easy to feel that things are going well. We are on top of our tasks, processes are in place and running smoothly. Customers are happy. All is well.

Then there are times when it is easy to tell that things are not going so well. We see room for improvement everywhere we look. We hear complaints from customers, co-workers and those in authority over us. We have the feeling that things are broken but don't know where to start the repair process.

At times like these conducting a brief survey can instruct you on both where to start making improvements as well as just what really needs fixing.

Here are five steps to create and implement a brief survey.

1) List the top 10 areas where you have reason to be concerned.

2) Write a survey with one question about each area. Don't make the questions of the type that can be answered yes or no. Begin your questions with phrases like "How do you feel about" or "What has been your experience with". These phrases encourage participation instead of a simple one word
answer.

3) Use a variety of mediums to distribute your survey. Don't simple mail it or hand it out, but use email, your web site, even an email autoresponder to distribute the survey. Put a link to the survey in your email signature while you are surveying.

4) If you get lower than desired response, offer a premium for answering. Make the gift something that has your name and contact information boldly displayed and the gift will do double duty. ;)

5) Live with the results. Even if the results point out a completely different answer than you expected, honor the voice of the people being surveyed. Vox populus, vox Deus.

Remember that news organizations poll as few as 150 people to produce survey results. Creating your own survey is the perfect way to ensure that you are meeting the real needs of your organization.

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3. Know When to Respond

Do you need more time? Are you tired of phone calls and emails about petty issues that interrupt important work? Here's one solution.

1. Categorize your projects, things to do, and even your customers into categories 1,2 or 3. Category 1 means you're making money or preventing a loss. Category 2 means you want to follow up, just not this moment. Category 3 contacts can wait until the end of the day.

2. Use every method you can (email filters, caller id, etc.) so that you only answer category 1 calls.

3. Use high tech, low touch tools for rapid response. If you get a voice mail asking a common question, create an email or fax to answer and use it every time the question arises. Email autoresponders are an excellent tool for these 'frequently asked questions'. This saves endless hours over
the course of a year.

4. Monitor the feedback you receive from this new way of doing things and change where you must. If clients complain move them to the A list, but only if their value to the company warrants it. The least profitable customers often
want the most hand holding.

Cell phone companies promised us freedom. What they gave us instead was "always on" communication which turns out to be just another way of filling up our time. You don't have to answer every call. You are free to choose. Choose wisely, and you'll add hours to your day.

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4. Tame the Email Monster

Email crept quietly into our lives a few years ago. At first, the notion of email was fun, new, exciting. "I'll EMAIL it to you", we said to one another, wanting to be efficient and up to the moment. We understood technology. We got it. We had email.

Fast forward to today and you find a completely different picture. Today, we're drowning in email. We get more and more spam (not the fine Hormel product) every day. Our inboxes are jammed with notes from family and friends, orders and price requests and unwanted solicitations to buy herbal viagra.

Today I bring you GOOD NEWS if you are swamped by email. You CAN tame the email monster that lives in your PC by using the five tried and true methods below.

When you take control of your email, you will find that you free up AT LEAST an hour a day. Some people have found that they save more time than that!! Use that time to work on the goals you've been setting, and soon you will find the time you need to grow your business.

What could you do with an extra one or two hours a day? Use the suggestions below and you just may find out!!

1. Group email tasks together. Have you meant to send a client a note about a story you saw in the newspaper? Need to send a special sale email to your prospect list? Do it all at ONE sitting. It may take an hour or more, but if you can be DONE with your email, you will have the mental freedom to move on with your day.

With the possible exception of client email (see tip 2) checking your email more than twice a day may be overdoing it. Use your goals as your guide. Reading email may be fun, and even seem like work, but in most
cases it can be a time waster. Limit yourself to checking twice a day.

2. Learn to use filters. Every good email program (Outlook, Outlook Express, Eudora to name a few) have the ability to FILTER email into various folders. In most cases, the help menus in these programs actually help. ;)

Filtering works like this. When an email comes in from a particular email address or with a particular subject line, the email doesn't go into your inbox, but rather to it's own folder. This way, you can see at a glance if an email has come in from an important client, or perhaps a request for pricing. The key here is to avoid scanning a large group of emails that will distract your
attention, and be able to go quickly to those messages that matter most.

Imagine if when your email came in you could tell in 10 seconds which ones were important and which could wait. Would you save time this way?

3. Learn about autoresponders. Autoresponders are easy to understand once you've heard it explained. Autoresponders are like filters on a higher level.
Instead of just moving messages to a certain location, an autoresponder actually REPLIES to the email with a set message. Many of us use the autoresponder feature in our email programs for vacation messages. Some
autoresponders can personalize the response (Dear Audrey) when they reply. You usually subscribe to a service to use an autoresponder although some high end email programs carry this feature. Some services charge
a modest fee, while some are free if you allow them to place a small ad at the top of your message.

                                   =====> HOT TIP <=====

Want to REALLY save some time? Here's a power tip for you. If you find that you are frequently asked the same questions over and over (can you ship, do you have a website, how do I place an order?) put the answers to these questions in an autoresponder!! This way you can say on your website, or in your email signature, "For answers to all your questions, send a blank email to <autoresponder email address> This will save you a ton of time if you take the time to set it up once.

4. Use multiple email addresses. Why have everything come into one inbox and have to sort it by hand? The key to saving time is SORTING your email so you can quickly look at the important stuff. Try using a different email address for orders than for general correspondence. Or have a separate email address for customer service. If you use filters, you can set up a filter on these addresses and voila, there's your email all organized and ready to read.

5. Use templates. A template is a pre-written response that you can send out manually. Similar to an autoresponder, but more flexible. With a template, you can simply reply to an incoming email by using the template and 99% of your message is typed for you! Most of us spend a LOT of time typing the same information into different emails? Why do that when that's what the computer is for! Most good email programs contain templates. You can add a pretty background, insert the text you want and even sign your email with one click of the mouse. Use different templates for different
purposes (one for sales, one for personal, etc.) and you save even more time!

One thing appears certain. We will deal with more email in the future. Last year's Anthrax scare in the United States put using email at the top of the list for ways to communicate. Now, we're using email more than ever.

Email is great when used as a tool. Email is horrible when you become chained to your computer, fearing if you don't check your email you'll miss something.

Take control of your email today, and get back the time you need to meet your goals and run your business.

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5. Developing Sales Resistance

How many things have you bought over the years that you simply never use? If you are like most consumers the answer is 'quite a few'. The odd thing is that businesses are no different in this respect than consumers. How many training manuals, pieces of software, or studies and reports are gathering dust in your company? In most companies the answer is legion. When you calculate the dollar value of these 'dust collectors' you can expect to go weak in the knees.

How can we avoid wasting precious financial, time and manpower resources on manuals, software, etc. that doesn't get used? I believe the answer is sales resistance.

By sales resistance I do *not* mean 'never buy anything for any reason'. That would be foolish. What I *do* mean is to buy the appropriate tool at the appropriate time. The key here is the word 'appropriate'.

The reason we buy tools for our businesses is to meet a perceived need. When we miss the mark and buy 'dust collectors' I believe we have mis-perceived our need. Let's look together at four ways to prevent this situation from happening.

1. Drill Down To The Root Cause Of The Problem.

Much like putting a band-aid on a broken arm, we sometimes buy tools simply to be making an effort at resolving a problem. The key here is to understand the root problem and the symptom both. We must be willing to take the time to 'drill down' to the root cause. Once we do that we can appropriately match the right tool to the problem we face.

2. Get Wise Counsel

Making decisions in a vacuum is bad business. Find someone to consult with who has had similar experiences. See what they did, how that turned out, and then apply their experience to your own situation. It's all too easy to make vital decisions while away from the office simply because you are not on the line of fire. Making decisions in a relaxed environment is wise, as long as you have sought wise counsel beforehand.

3. Get Testimonials.

Testimonials? Isn't that simply a sales person's tool to convince us to buy now? Yes and no. By testimonials I mean proactively contacting customers of the company from whom you plan on buying. Of course the company will point you at their happiest customers, but they can't control the questions you ask. Be sure to contact real users that have experienced root problems similar to yours. Did it work out for them? If so, you greatly increase the odds that it will work in your situation too.

4. Plan Before You Buy

Sounds simplistic I know. But so many of us defer the decision to take action until we simply can't stand the situation any longer. It's at this point that we are prone to errors in judgment and making unwise choices. Professional sales people will tell you that customers buy on emotion and defend their purchase with logic. That's fine, but make sure to avoid a situation where your emotions mis-guide you simply because you want the hurting to stop.

Developing sales resistance will make you a level-headed buyer and save you untold thousands of dollars (and heartache) over the years.