What’s Driving HUGE Results in Manufacturing & Distribution

December 8th, 2015
manufacturing systems

You can’t take a magic pill to drive HUGE results in your manufacturing or distribution company, but rather look to the tried and true methods that drive business growth and productivity.

As the year winds down, it seems like a great time to “take stock” — what is “hot”? I am not a fan of fads — although many fads such as lean manufacturing are right “on the money” from many respects, there is no magic pill in going down the lean path. That’s true with most other touted manufacturing programs – Six Sigma, Theory of Constraints, SIOP, and the like. Instead, what really works?

If I look across my clients which span $5 million dollar family-owned companies to $50 million multi-generation companies to $100 million dollar private equity backed companies to $25-250 million dollar facilities of multi-billion dollar companies, what’s “hot” has much in common. As my mentor from early in my career used to say, he paid attention when I said “HUGE”. I never realized I used that word until he pointed it out to me. Thus, here are those that consistently drive HUGE results:

  1. Blocking & tackling – Seems quite boring; however, it is consistently the most overlooked secret to success. Interestingly, one of my speeches this past year was requested solely for this reason — inventory accuracy never goes out of style! What are you doing to make sure your basics are in place?
  2. Planning – It is surprising how often I am brought in for this topic. Lucky for me, it is a definite strength — and often desperately needed across-the-board. Whether planning relates to demand planning (customer forecasts), master scheduling, detailed planning, kanban systems, planning the constraint, project planning, cross-functional planning, or just referred to as “make sure the right items are in the right places at the right time with minimal inventory, maximum efficiencies, excellent service levels and shortened lead times”, it is hot!
  3. Leverage systems & data – Systems help to automate, reduce errors, improve efficiency, grow the business without adding hard-to-find and expensive resources and better support customer needs. As supply chains have become more complex, it is a “must” to properly leverage systems if you want to grow profitably. Also don’t forget your data. Your system collects more data than imaginable. How can you analyze or utilize this data for success?
  4. Top talent – I’d be remiss if I didn’t mention one of the tenets ALL of my clients have in common — the need for top talent. As supply chains have become more complex, global, surrounded by risk, tied down in rules and regulations, and the like, it has become even more important to retain, find, train and develop top talent. I mention them in this order because I cannot tell you how many clients I’ve run across that have a superstar employee that is overlooked. Perhaps they need a tool, or to be turned loose (empowered), given permission to focus on a particular project, or provided training or mentoring in enhanced communication skills or use of language. Provide it, and suddenly your profits skyrocket. Why not take a look around you or hire someone who can help you find these stars in your midst?
  5. Metrics – I’ve also found that my best clients put the “right few” metrics in place. Are you tracking responsiveness, reliability, performance, agility and cost (return on your assets)? Which are important for your business? It is easy to get caught up in measuring useless metrics because we’ve always done it that way or because the boss requested it. But why? Metrics should provide us with a guide of how we are performing vs. what is important to success. Success is not the same across companies — or even industries. What does it mean for you? And can you tell whether you are making progress?

Although this list doesn’t sound sexy, it can be extremely sexy to investors, Boards of Directors and employees on a bonus plan tied to performance.

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Keeping the Big Picture in Mind

December 4th, 2015
project strategy

It’s natural to get lost in the day-to-day project details. Schedule weekly reminders to make sure team members are keeping sight of the big picture.

I’ve been focused on an ERP system go-live this week with one of my key clients, and it reminds me that it is easy to go down the rabbit hole in details and forget the big picture. Whether we are implementing a system, racing around to satisfy customer orders due to growth or service problems, rolling out new and improved processes and programs, or something else, remember to take a step back to keep the big picture in mind. For example, if you question your current workload, how much of it would be focused on what is essential to the big picture? Is it possible you’ve gotten off track? Of course! It happens all the time – and no one is immune!

Recently, I was working with a client on a project. We agreed on our strategy upfront. Then we got lost in the details. There was debate and confusion surrounding the details. This alone is not a note of concern as debate over how to best handle details can be productive and end up at a better result.  However, in this case, we got so lost in details that a strategy change was made without the full knowledge of the core team – it was well-intentioned but occurred without clarity and alignment.

It turned out that the strategy change had complexities (of course) and so frustration resulted. When talking about details, we each thought we were on the same page of the strategy but we weren’t. Somehow, we made our way through the details to a successful end result according to the new strategy even though we were still on two different pages. The new strategy was “better” from several respects but it created diversions from other critical tasks. Thus if some level of success resulted from this level of confusion, imagine what could have been achieved if we had taken a step back to review the big picture!

Hindsight is always 20/20 but the smart executives learn from all experiences.  In this case, remembering to check the big picture and sync up would have been a great benefit. The great news is that it is easy to turn around – schedule time in your calendar. Ask your team members to put reminders into the weekly process. Why not have a “win” that generates 10 fold the level of success by following one simple rule – remember your big picture.

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Observe to Rule the Roost and Improve Performance

December 1st, 2015
improve performance

Sometimes the productive road to performance improvement is to just observe and ask questions. From observation, ideas emerge, issues pop out and you can take directed action to make positive change.

It is interesting how effective the powers of observation can be! Take a step back and observe what is going on around you. The Japanese are experts at this in lean manufacturing ­— they simply watch what is going on around them and ideas emerge. I also asked an investment banker/turnaround expert for his top tips for success as he had a 99.9% hit ratio. He said, “Walk around the facility, observe, and the issues will pop out at you.” Talk about a multi-million dollar walk!

  • Focus: Distraction can be a deterrent to success. Stay focused on a topic or a work process until you’ve seen how it works. Eventually, ideas will emerge.
  • Pay attention to waste: Similar to lean thinking, pay attention to waste of all sorts. Just ask yourself common-sense questions. Why are you performing this step? Why are you checking? Why is scrap piling up?
  • Look for the bottleneck: What is the weakest link in your chain? If materials are moving through your facility, they cannot move faster than the slowest or weakest link. Identify it. How can you focus energies on just this step?
  • Watch trends: If you watch often enough and/or look at key metrics, trends will form. What is out of sync with the prior trend? Did something change? Is it an outlier? I’ve found more million dollar solutions by noticing trends earlier than the competition than any other method I can think of.
  • Ask: Business is not a solo act. You can learn vast amounts by simply asking your employees, peers, manager/Board, customers, suppliers, etc. Collaboration is cornerstone to success.

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