Tag Archive: metrics

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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Strategies to Keep Your Project on Track

November 20th, 2015
project teamwork

The most successful projects are well-managed and kept on track. A strong plan and focus-oriented strategies will keep the team motivated and on task.

As easy as it seems to keep a well-planned project on-track, it isn’t! In working with hundreds of project teams over the course of my career, I’ve found that projects do not fail in formulation; they fail in execution. The best results follow those projects that are well-managed and kept on-track. Results are not just substantial in terms of monetary gain, but are also important to customer satisfaction and loyalty. In today’s Amazon-impacted marketplace, a leg up on the competition can be a vital competitive strategy. What are you doing to ensure success?

There are several powerful strategies to keeping a project on track. Some of the most impactful are as follows:

  1. It starts at the top: As with success overall, keeping your project on track starts at the top. Leaders can make or break success. Thus, selecting the best project manager is key to success. Of course, it is beneficial also to have the best project sponsors and executive support; however, the 80/20 of success is putting the right leader in place.
  2. Put time in upfront to understand the project plan: Although it is a common desire to jump into the project and start performing tasks, it is significantly more successful to take the time to develop a strong project plan. Make sure to coordinate with all relevant parties and incorporate input. Ask questions and consider potential issues. Be clear on your plan, and results will follow.
  3. Focus on the critical path: One of the secrets to success relates to focusing exclusively on the critical path. It is easy to get deterred on all the project plan tasks as they all seem important; however, the most successful projects consider the 80/20 as the critical path. In essence, the focus is on the tasks that are most likely to hold up the project from progressing at the optimal pace and those which are likely to impact whether results occur.
  4. Follow up with task owners: Following up with task owners can ensure success. I’ve found that a quick check in with task owners to remind them of upcoming tasks, especially critical path tasks, can be invaluable to making sure the owner is prepared to start on time and that they have the resources available to successfully complete the task. Ask if there are any concerns and work to address them prior to the start date.
  5. Embrace project supporters: Whether a project sponsor or a peer to the project team, project supporters are integral to project success. Identify project supporters and keep them in the loop. Make sure to provide information so that they understand how they help to contribute to the project success. Make it easy for them to support your project.
  6. Celebrate successes: An important part of any project is to celebrate small wins along the way. Don’t wait for the project to be completed to celebrate success. Success breeds success. Find people doing right. Look for indicators that the project is moving in the right direction. Recognize the progress and celebrate the contributions of the team.
  7. Simplify: Complex project plans do not deliver success. Contrary to popular opinion, I’ve found that more often than not, success stems from simplification. Simplify to the tasks required to deliver your end result. Avoid complexity. It will become easier for the team to understand and execute.
  8. Monitor metrics: Do not wait until the end to evaluate project success. Identify milestones. Keep an eye out for critical path milestones. Monitor progress towards these milestones. For the critical milestones, develop interim checkpoints so that you can monitor progress along the way. That way, you’ll have the opportunity to adjust as needed.
  9. Don’t take your eye off the prize – results: Although it is easy to get caught up in a maze of tasks and to-do’s, don’t take your eyes off of your desired end results. Keep them in mind and focus on those actions that will contribute specifically towards delivering end results.
  10. Communicate, communicate and communicate: Just as in real estate where location, location and location are the three most important attributes of a new house, communicate, communicate and communicate are the three most important attributes in keeping your project on track. If all team members, supporters, sponsors and other related parties are not aligned, the project is likely to veer off track.

Since executives count on projects to deliver the vast majority of improvements to company performance (such as growing the business, increasing margins, and accelerating cash flow), keeping the project on track is essential. Those who follow these ten strategies will succeed significantly more often than those who don’t. Why take a chance on what’s vital to business success?

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Why My Best Clients Focus on Responsiveness

November 10th, 2015
accelerate cycle times

As customers continue to demand shorter lead times, it becomes imperative for manufacturers and distributors to become more responsive and improve order fulfillment cycle time.

I’ve been working on my book The Amazon Effect lately, and it brings to mind the critical importance of responsiveness. There is no doubt that a large part of Amazon’s success is due to responsiveness – quick deliveries, Amazon Prime within 1-2 days with no freight, Sunday deliveries, same day deliveries and now they are even looking at options to deliver in hours or minutes.

I work with a cross-section of manufacturing and distribution clients. Aerospace and building products industries have been a focus area of late as both are growing. I work with the best and help make them even better. What I’ve seen is that these clients prioritize responsiveness. Speed matters!

For example, one client in the building products industry turns around a vertically-integrated manufactured product within 24 hours as a worst case scenario. The vast majority leave their facility on the same day they are ordered. This is one of the reasons they are #1 in their particular industry. Another client in the building products industry delivers within 2 days, and 80% are actually shipped within one day. It is obvious that one of the reasons their customers continue to order from them is their rapid delivery. Everyone is geared to this end. In a third example, another building products industry client also ships within 24 hours. In their case, they are upgrading their system to better support this continued focus as they continue to double their business every few years.

My aerospace clients sing the same song yet lead times are longer with these more complex products. For example, in one aerospace manufacturer of items in the cockpit, customers are demanding quicker deliveries. Although their lead times can range from 13 weeks to 9 months, demands for radically reduced time frames continue to occur. In another aerospace client that produces door frames and larger parts of the plane, they won new business partially because customers knew they could support increased volumes on quick lead times for their industry. The aerospace industry is quite collaborative; thus, supply chain partners work together to reduce the overall supply chain lead time.

What metrics can we use to measure responsiveness? Typically cycle time metrics rule the day in this area. I find that order fulfillment cycle time is the best measure of success.

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Overriding Metrics for Supply Chain

October 6th, 2015
Concept, chain, globalization.

Do you have your finger on the right metrics for benchmarking your company’s performance? SCOR methodology may help you take a more strategic approach.

In today’s marketplace, the Amazon Effect has taken hold and expectations are elevated. My firm completed research on this topic and I’m writing a book on The Amazon Effect – the bottom line is that if you aren’t paying attention to these elevated expectations and how you’ll raise the bar to meet them and go beyond, you’ll be left in the dust by those who will.

To avoid being left in the dust, focus on the key high level metrics for the supply chain – reliability, responsiveness, agility and cost and asset management efficiency. If you are not reliable, you can’t even get in the game. Amazon is known for responsiveness. Same day delivery, Sunday delivery, drone delivery pilot programs – they constantly push the envelope. Amazon is also known for agility – if the customer changes his mind, how easy is it to stop or change an order? Quite easy! What if you receive a defective product? How easy is it to return? Think about how prepared you are for changing conditions and how quickly you can respond. Certainly, we all think about cost – no one can afford to add cost to their product as customers are unwilling to pay for anything that isn’t viewed as high value. And, asset management efficiency relates significantly to cash flow – the faster cash moves through the process steps, the better.

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Can SIOP Replace Budgeting?

September 4th, 2015
Budget concept

SIOP can do the heavy lifting of the budgeting process by filling in the blanks on operations and inventory line items.

SIOP (sales, inventory & operations planning) can easily replace a good portion of the budgeting process – with better results! Why? Well, SIOP is a monthly process of reviewing and agreeing upon the latest sales forecast/demand plan for the next 12-72 months and the resulting master schedule (production plan). When you compare the master schedule vs. capacity and staffing levels, the required staffing needs will become clear. Options are reviewed as these gaps could be filled through promotions, temps, full-time hires, contractors, consultants or via off-load. Machine requirements will also emerge – upgrades, new machines, etc. Skill development needs will be unveiled. Based upon the demand and supply plan, an inventory plan will also be created. And the list goes on.

When you have a monthly executive review of this type of information, it becomes a great way to align the areas of the organization on the same page.  It also captures the same type of data that is the basis for a budget. Thus, the SIOP demand plan can be the basis of the budget. It could be tweaked from there with Board of Directors or other additions. The information captured as to the required staffing and capital needs will be captured in the budget. The inventory plan will provide a good basis for cash forecasting.

The areas that will have to be added into the mix will be those not directly related to operations. Thus, overhead rates might be affected by SIOP in that the need for additional support could arise, the specific budgets will need to be developed in additional detail. SIOP can also bring up the need for additional buildings or off-site storage; however, those specifics will need to be added in later. There will be other details which have to be developed separately; however, the budget basis could easily be 60-80% of the way to the desired state. Wouldn’t that be a great advantage! If you are interested in learning how to implement SIOP, email or call. 

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