The IDEAL 5 Step Approach to Problem Solving

When you come up against a problem the temptation is to get caught in its headlights, so consumed by the problem itself that you end up in a vicious circle of fire fighting, instead of nipping it in the bud. Use the simple IDEAL five step approach to problem solving to break this cycle. 

I: Identify the problem

Start with the consequences that are causing the fire fighting. What is it you’re trying to prevent happening. Is it a regular cause of client complaints, a machine persistently breaking down or excessive overtime?   The first step on the IDEAL route is indentify the root cause/origins of the problem.  This can only be achieved through defining the undesirable outcomes, and logging or tracking those, to pin point trends and patterns.

You may need to implement some tracking mechanisms using your existing software or as simple as a hand written log by the employees on the front line.    Without some form of logging you’ll never pin point the root of the problem.  For example, do the breakdowns occur most frequently on the night shift, are all the overtime hours in one department or due to a specific product clogging up machines, or customer complaints increasing for one particular service?

Without data you’re fumbling in the dark, and managing on gut feel which ends up creating a negative blame culture, and costing you more in the long run if the problem continues unidentified.   For a comparatively low investment in time and management you are more likely to find the problem and at worst reduce it, or at best, eliminate it altogether.

D:  Define and Quantify

Now you know what the problem is, you need to get a handle on precisely how, why or where it arises.

Trace all the issues you’ve identified back to the root cause, and continue gathering information to quantify the frequency and magnitude of the problem. This may be the number of complaints, hours of machine downtime and lost production, or how many people working how much overtime. Quantify the financial cost of these causes. Look for trends and patterns over time to help pinpoint the cause.

This may take just hours, days, weeks or even months to get to grips with.  You should involve the team in analysing what’s going wrong as you’re more likely to get their buy-in once the root causes begin to emerge.  These may highlight where the team need to change working practices or procedures, which can sometimes be a daunting prospect, pushing employees out of their comfort zone.

Detailed data puts you in a stronger position to put the problem in perspective – decide whether it’s a significant issue with high hidden costs, or isn’t having much impact so leave it for now, but monitor the problem as part of your key metrics.  The decision point will be whether the benefits of finding and applying an alternative solution, begin to out weigh the costs in time and resource?

E:  Explore the Options

Once you’ve uncovered the root cause, you can begin to assess possible courses of action.  Involve your team, as the best ideas can come from those closest to the problem, but sometimes employees don’t feel it’s their place to speak out. Everybody has different perspectives.  A fresh set of eyes looking at a problem may see a solution that you might have overlooked or not considered.  Even your clients are worth seeking advice or opinions from.  At the end of the day the day, they’re your most important asset.

Draft a shortlist of options and brainstorm the pros and cons of each. Identify the steps, money, staff or time needed to put each possible solution into action.  For example, how viable is it? Will it cost anything? Are there any potential negative outcomes? Could any proposed changes create a problem further down the line (domino effect)?

“For every failure, there’s an alternative course of action.  You just have to find it.

When you come to a roadblock, take a detour”          Mary Kay Nash.

If the solution appears relatively risk free it’s always worth running a trial.  Tweak and fine-tune the changes over a short test period, to give a better idea of whether it’s going to work in the long term or not.  You may prefer to prioritise cost over time, or risk over cost.

A:  Act on the plan

Now it’s time to take action.  Use your team. Involving more people opens up a wider range of skillsets to draw from. Decide which individual would be most suited to which task and deploy them accordingly.

Throughout the process, keep your team, clients and other stakeholders up to date on progress. The more transparent you are, the more confident your stakeholders will be to follow your lead. 

L:  Look at the Consequences

Monitor the ongoing effects and outcomes of the changes you’ve made. If the problem is starting to resolve itself, or at least reduces, then you’ve achieved the objective and should continue doing more of the same.

If the problem persists, loop back to step E of exploring the other options on your solutions list and try alternatives. The more you look into the process the more you’ll be able to avoid the same problem happening again and, if it does, you’ll be able to refine your action plan to address it.

Now that you have found a way to deal with your most pressing problem, review the entire process and the lessons learned.  Debrief your team and foster a culture of “didn’t we do well” – this breaks down barriers for future problem solving initiatives. Encourage even the most junior staff to step up and be confident to suggest new ways of working.

The secret is not to get caught in the trap of “this is how it’s always been”, or “we tried that but it didn’t work”. By taking stock and applying these simple steps you can go a long way to improving the effectiveness of your problem solving.

Your Next Steps to Greater Productivity

Alluxi is here to offer you support, bringing a facts and figures approach to evolve your business and realise your goals.  As a first step towards identifying your current business challenges and evaluating where your future opportunities exist within your business, we invite you to complete the in-depth Alluxi Business Success Scorecard focussing on the 10 key areas of a successful business.

Take 15 minutes to respond to the scorecard and get your results within minutes.  You’ll be invited to book a follow-up 1-2-1 Productivity to Profit Breakthrough Session to find out how you can implement rapid and measurable improvements.

Click here to take the Alluxi Business Success Scorecard now

The post The Stress Free Approach To Problem Solving appeared first on Alluxi Consulting.

Despite recently emerging from the global pandemic, only to be bombarded with a follow-up attack of economic challenges in recent weeks and months, I was pleasantly surprised at the resilience and optimism they exuded for the future of their companies.

The air of optimism was chiefly due to their proactive, agile, innovative out of the box approach to ‘finding a way” – working through their respective challenges to ensure they could still deliver, or pivot their products and services around the obstacles, to ensure they will survive and thrive in the short to medium term.

In conversations with SME owners I talk to daily, one of the key solutions to finding your way through this and ensure your business thrives beyond the short term risks, is looking introspectively at your business and getting back to basics.

The Levers of Productivity

Notwithstanding the pandemic, challenges facing all business over recent months are undoubtedly going to put extreme pressure on profits.  Business owners will have to look inwards at those aspects of their business they CAN influence, to maximise efficiencies, minimise costs, and pull the productivity levers even harder to maintain their margins.

When your costs and overheads increase, productivity drops and your profit margins suffer.  It’s critical to understand exactly what impact future cost increases will have on your overheads.  You need to punch the numbers through the spreadsheets, testing your forecasts, budgets and cashflows to work out which of the 3 productivity levers will work for you to prevent profit erosion.

Increase Output

Higher volumes

How much additional volume could you realistically market, sell and deliver to recover the additional costs, without increasing your prices?

Marketing initiatives are the key driver here.  During lockdown we saw some truly energetic pivots, especially from the hospitality industry where pubs & restaurants offered take away and delivery services.  This swift adaptation to the external forces closing their normal modus operandi, generated alternative forms of income to cover overheads, use up the food stocks that would otherwise have perished, and provided a hugely appreciated service to the local community.

This initiative had the unexpected, more intangible benefits of seeing locals in the community, support their village pubs and restaurants once the venues were allowed to open up as normal.

With the external cost increases in energy prices, fuel and employer payroll costs all starting to impact your overheads, or looming in the next 12 months, marketing and sales needs to be agile and focused more than ever.  A robust process review may highlight new ways of channelling your marketing to boost sales.  My last blog highlighted that consumer attitudes have shifted considerably during the lockdown, with 40% of shoppers surveyed agreeing that British food tastes better than imported. 59% of shoppers confirmed they try to buy British food whenever they can.  That shift is undoubtedly extending to any British product or service, especially with the current delays in the supply chain affecting imports, so it’s the perfect opportunity to push the buy local agenda, to your best advantage.

Resource Productivity

How much more volume can your existing resources absorb to avoid recruiting additional staff?

Getting back to basics should start with a thorough re-think of how people in the business work.  A complete 360 degree critical review of every single process, procedure and task can bring to light lots of small inefficiencies, or low value steps that, if eliminated, could sum up to significant time savings over the weeks and months, freeing up staff time to produce more, process faster, and deliver better.

The wider effect of taking the team through this exercise is it increases employee engagement as you involve them in shaping their own destinies.  You may find their jobs become more interesting or motivating as they see their productivity improve.  Not many people want to be bored, or stifled by red tape in their day-to-day jobs.

Reduce Inputs

Foreseeable cost increases that will impact on your next annual financial forecasts for all of us, include the energy tariffs threatening to increase by 25% as world gas shortages loom on the horizon.   Even if your business doesn’t rely on huge amounts of energy for delivering your products, your suppliers may be affected and they may pass those increases on to you as their client.

The shortage of HGV drivers was a key concern for the small group of manufacturers I heard from.  The impact is affecting the supply chain both nationally and internationally for imports/exports. The solutions they’ve had to implement included stock piling where possible, but this requires working capital.

Where they’re aware of delays in imports, these entrepreneurs are constantly researching and sourcing alternative local options.  The wider impact of import and export challenges due to the bureaucracy of Brexit, and new trade agreements coming online add to the complexity of running a business, and reducing the agility of SME’s who don’t always have the cash reserves to ride out the storm.

Optimum Productivity

Additionally  from April 2022, employer NI contributions will rise by 1.25%, which adds an extra £1,250 a year on payrolls from £100,000 – which can be just a small team of 5 or 6 people.   Whilst it may not be your biggest increase in costs, it’s another driver to ensure your team productivity is at its optimum.

Combined with the staff shortages the UK is experiencing, retaining your existing staff has become of paramount importance to business owners.  Employee engagement must be a key consideration, to avoid additional cost of recruitment, training and the initial weeks or months of lower productivity new recruits generally cost a business.

 To counteract all these external forces driving up your costs, you need to be finding ways to both increase your sales, and drive down or eliminate those costs you can influence.

• Payroll is often the highest cost for SME’s and achieving target staff productivity levels described above should be the first consideration.
• Raw materials, stocks and consumables are worth reviewing for necessity and yield.
• Would smaller premises reduce your overheads, especially with flexi-working becoming more prevalent?
• Are you reducing the waste in the process of delivering your products or services to reduce the cost of materials?
• Do you really need to mail customers hardback catalogues when you could offer online brochures?
• Are all the lights and heaters switched off at night?

Some are really obvious and, what may seem, trivial considerations but if you take care of the pennies, the pounds take care of themselves.  There are a myriad of cost saving initiatives you could consider – download the free e-book 20 Ways to Be More Productive for more ideas.

In summary, the recent pandemic, combined with the uncertainty of Brexit, has given businesses a double whammy of challenges to contend with, but out of the chaos the strongest leaders will always find a way.

There is a glimmer of hope to survive the seemingly never-ending threats and disruptions hanging over businesses at the moment.  I’ll leave you with this extract from a LinkedIn article “Back to Basics – What is a Business Strategy”, by Guillem Garcia Galofre. Whilst aimed at a more corporate audience, he summed up my philosophy perfectly.

It might seem difficult to think long-term right now, but modern business history is defined by corporations constantly reinventing their business models and strategies in the face of disruption. It might not always be easy to keep an eye on the horizon when there’s so much chaos going around you, but having that beacon to guide you is what ensures that your company will outlast the chaos

Your Next Steps to Greater Productivity

Alluxi is here to offer you support through times of change and uncertainty, bringing a facts and figures approach to evolve your business and realise your goals.

As a first step towards identifying your current business challenges and evaluating where your future opportunities exist within your business, we invite you to complete the Alluxi Business Success Scorecard.

It’s completely free, and takes just 10 minutes to uncover your hidden opportunity in 10 key business success areas.  You’ll be invited to book a follow-up Productivity to Profit Breakthrough Session to discuss the results in more detail and identify how you can implement rapid and measurable improvements.

Get Your Scorecard Results Here

Photo by Paul Skorupskas on Unsplash

The post IN THE FACE OF ADVERSITY Get Back to Basics appeared first on Alluxi Consulting.

The UK print industry is in crisis. The rising cost of raw materials (paper and cardboard) coupled with the challenges caused by the pandemic and the uncertainty surrounding the impact of Brexit has left many print business with an existential concern for their short term economic viability.

With the global turnover of printing businesses dropping by almost 13% between 2019 and 2020, the short-term economic efficiency of UK printing businesses is now paramount to business survival.

In this blog, we’ll be exploring the means by which economic efficiencies can be found within UK print business without cutting labour resources – a short-sighted strategy during a time that many print businesses report struggling to access a skilled labour force.

Our suggestions for creating economic efficiencies will also ensure that when the time comes, your business is ready to scale rapidly.

Short-Term Survivability & Long-Term Scalability

The British Printing Industry Federation’s outlook survey highlighted that printing business owners had 3 key areas of concern.  The economic impact of the pandemic and the rise in paper and cardboard prices were both the joint top concerns by nearly half (48%) of the respondents.

Get Ahead of Your Competitors

Competitors pricing below cost was the third highest concern rated by 37% of those surveyed.  These concerns can be viewed as i) impactable or ii) non-impactable when determining how best to navigate your future barriers for survival.

With competitors pricing below cost, a price war will do little to keep your business afloat in the short to medium term.  Your marketing strategy needs to be shouting out much greater advantages to encourage your clients to buy from you, rather than turning to cheaper, lower quality alternatives.

Your competitors are equally impacted by these external economic influences, so the business owner who can play smarter for longer, by driving up efficiencies and productivity internally, will come out on top.

This may require pivoting your existing modus operandi from a low value/high volume, to a high value/low volume model, or moving away from the traditional paper printing to the new millennial trends towards wall murals, vehicle wraps, customized labels or packaging.

Scaling up your printing business requires more than adding the latest printing or finishing equipment. You must devote time and energy to recruiting multi-skilled employees to work across departments, identifying opportunities for growth, and marketing your business to the right prospects.

This leads nicely into the importance of documenting your processes and procedures – writing your very own business genetic code!

Design, Document & Comply

The Importance of Documented Procedures

Providing documented procedures of the work, systems and processes is one way of bringing new starters up to speed in a short space of time, and prevents knowledge leaking out of the business with each leaver.

Procedures and manuals can be quite daunting to put together initially, but once set up it’s a simple matter of updating them as changes are made, training and communicating them to all involved.

Competitive Advantage in Tendering and Quoting

When providing quotations, bidding or tendering you will stand out from the crowd, and gain competitive advantage, if you can present in writing the service levels that your clients can expect to receive, and demonstrate the quality standards of how you manage your business.

These will clearly communicate the quality of service your clients can consistently expect from you.

Increase On-Boarding Efficiency

In my e-book 20 Ways To Be More Productive, documented procedures are included as a way of achieving productivity in the workplace, especially when onboarding new staff, or promoting someone to supervisory or management positions.  Some new managers, or even new employees, are too proud or fearful to admit they don’t know what’s going on, which leads to the inevitable drop in productivity.

This is normally a short-term problem if clear procedure manuals are provided, robust management systems are in place and the manager is given a proper handover and supported induction period.

Increase Individual Productivity in The Workforce

The administrative processes that often go unnoticed in the back office are frequently the most manual, yet neglected when considering workflow improvements.  Taking the job or print file from receipt to delivery may not be as efficient as perceived.  Manual processes invite human error, production time hold-ups and delays, especially if employees are absent from work.  Automation, visibility and accountability are key to making sure workflow is streamlined.

In order to take that leap into the future, the behavioural aspects of your work flows will make the difference in the productivity levels of each of your team members – often the most costly overhead after capital expenditure. This could put you a step ahead of your competitors without compromising on quality.

ISO Accreditation or other Quality Certifications

There are fringe benefits to documenting your processes, systems and procedures. ISO Accreditation or other Quality Certifications require written statements of your business procedures in a transparent and auditable format. Get it right and you’ll be half way to achieving that accreditation.

Value of Business

If you decide to sell your business, your systems and processes procedures will add significant value to your business for prospective buyers, providing them a turnkey solution they can walk in and hit the road running.

Which Procedures to Document in the Printing Industry

1.     Customer Service Policy

Let the clients know in clear, plain English what the turnaround times will be for each stage of their order, and define the quality standards they can expect for their project.  Even if they haven’t mentioned or asked for it in their enquiry, you will stand out if you make a point of demonstrating that quality comes first.

2. Safety – is Paramount!

Health & Safety procedures are probably the one area where operating procedures are abundant in most companies.  Similarly to above, signs and notices in conspicuous positions around the work place can keep health and safety measures in the forefront of everyone’s mind.

TIP: Signs and notices soon become part of the furniture and ignored.  It’s a useful exercise to occasionally change the position, colour or design of the notices to make them stand out again.

3.     The Receipt and Storage of Raw Materials

There’s nothing worse than production managers planning in a client job only to find their materials haven’t been ordered, not yet delivered or can’t be found in the store room.  The buying, stock room and production functions must all be talking to each other regularly to ensure smooth running and prevent downtime, or delays to the turnaround times you’ve committed to the client.

These 3 areas of the operation should ideally have one single procedure to demonstrate they are all inextricably linked to each other, and can’t work as independent departments.

4.     Machine Use

Every team member involved in production must receive full and extensive training on how to use each machine safely and efficiently. Not just the basics of which knobs to press and screws to turn, but how the machine can be fine-tuned and the print process optimised to achieve best quality.

Pining a short checklist, infographic or laminated instruction plaque above the control unit where everyone can see it is a quick simple method to ensure the procedures are followed every time.  Regular refresh sessions should be held to check best practice is not falling by the wayside, causing quality or productivity to drop.

5.     Packing and Shipping

This is often where the most damage occurs, chiefly due to lack of due care and attention handling the finished product.  Different materials may require different packing techniques, and this may take a while for any one operator to acquire an adequate level of skill to prevent damage.

Again, instruction photos, aide memoirs, or laminated photo books kept on hand in the packing area, can work to keep peoples focus on the right methods.  New trainees should be shadowed by their supervisor or skilled senior team members asked to train and mentor them, until their competency levels have reached the high standards required.

As in other areas of the operations, it’s worth drawing up a flexibility chart as part of your standard procedures and training system, showing which operators have been trained in which skills.  This will highlight gaps where you may only have one or two operators trained in one activity or skill and where you need to train additional staff members in that area to give you maximum flexibility.

If only one person is skilled or trained in a specific activity or process, this is quite high risk to the business if they’re off sick, on holiday or at worst, resign.  Maximum flexibility is required to ensure you can deliver all of your products & services all the time, and are not constrained by staff availability.

6.    Software Shortcuts & Tips

With the print industry becoming increasingly digitalised, CAD based design, and CRM software driving the business at the front sales ends, getting the staff familiarised with the software will reap rewards in reducing admin time.  If not trained properly, employees often resort to clunky excel spreadsheets to patch over their uncertainty of the software, or inadequacies of the administration processes.

7.    Novel Issue Query Elevation

Printing often involves long print runs, with significant wastage occurring at the beginning and end of the print run, which incurs costs in machine running time, labour, and material costs – all of which the client will be paying for.  Any print company who can work on reducing the wastage in any or all of these will be ahead of the game in pricing the job.

Involve everyone from the front line operator, and production floor managers, feeding up their suggestions and ideas for novel ways of working to reduce the costs by introducing a formal feedback loop.  A written process for this communication process, where ideas and suggestions are regularly reviewed and implemented (where feasible), embeds it as part of the “company way” rather than a less efficient and sporadic chat over the coffee machine that probably won’t result in tangible action.

Managing Change

Company policies and procedures should define how information is created, managed, updated and archived in carefully mapped out computer drives. To avoid Information Chaos, as a business you need to decide what your system or process will be, map it out and document it in detail – then write the manual.

You can then use that manual to communicate and train each staff member involved in those workflows, making sure everyone understands the importance of the practice you want them to adopt.  Staff are more likely to comply with the best practices and achieve greater productivity more quickly if they feel some ownership towards them.

Check-in and monitor staff at regular intervals and do an audit every quarter, or half yearly, to keep your processes sanitized.  If the processes or systems change, which it should do if you’re continually looking for ways to improve and avoid chaos, that’s ideal – you just update the procedures accordingly and communicate the changes through a Tool Box Talk or monthly training update session.  Just keep the procedures fresh and up to date.

Access to the Data and Company Knowledge Base – Don’t let it get personal

A regular problem I witness is the down time or hidden delays caused by employees making information their own, rather than treating it as company property. You may be searching for your 2021 Sales Records in Joe’s laptop, but instead you find a folder called JOESTUFF full of dumped word documents, excel spreadsheets and other paraphernalia with no clear company naming format to easily find what you need.

This makes it impossible for anyone else in the process to find, if the employee is on holiday, off sick or even worse has left the company.  Sharing through cloud based software allows controlled access to those people who need it, and for one source document to be updated by multiple users at the same time, avoiding confusion caused by having infinite versions.

Redefine Your ‘Company Way’

Defining your Company Way, brings major benefits in laying down the DNA of your future business processes, systems, procedures and policies.  When designed to ensure standards and quality of service will be adopted uniformly throughout the business, new staff members will begin to deliver value more efficiently, and existing staff will be more sensitised to best practice.

Getting these documented in writing, or added to your company e-library, makes onboarding new employees quicker and stress free.  They will have a crib sheet guiding them through how to do the job, so you know it’ll be done to your preferred best practice, defining the “company way”, and avoiding you paying for a new recruit to reinvent the wheel.

Don’t think this has to stifle creativity.  If the team feel there are better and more productive ways of doing something, then they should be encouraged, and a forum created, for ideas to be nurtured.  The processes or procedures manuals can be updated and improved on as the jobs evolve and the business grows.

Without processes and procedures, individual employees tend to muddle their own way through, which may not be the most efficient, best quality and is not easy for someone else to pick up if they are on holiday, off sick, or leave the company.

Those businesses that don’t develop and document their processes and procedures are invariably the ones receiving countless customer complaints, have a burnt-out frustrated team, and a business owner who spends their life fire-fighting.

Don’t fall into that trap.  For a few weeks or months of putting in time and energy to apply yourself to designing how your business is going to operate, building the right job roles to deliver that model, and positioning yourself to manage and lead rather than do, you will reap the rewards.

Find your Escape Velocity and you can reach your strategic orbit the business needs you in, to deliver the long-term goals, achieve your financial aspirations, and the work-life balance you deserve.

The Shortcut to Defining Your Company Procedures

Alluxi is here to offer you support through these times of change, bringing a facts and figures approach to evolve your business and realise your goals.

As a first step towards identifying your current business challenges and evaluating where your future opportunities exist within your business, we invite you to complete the Alluxi Business Success Scorecard.

Take 10 minutes to respond to the scorecard and see how your business scores in 10 key areas.  You’ll be invited to book a follow-up Productivity to Profit Breakthrough Session to discuss the results in more detail, and identify how you can implement rapid and measurable improvements.

Click here to take the Alluxi Business Success Scorecard now

The post THE KEY TO SCALING A BUSINESS IN THE PRINTING INDUSTRY – Process Management appeared first on Alluxi Consulting.

As we begin to emerge from the Covid lockdown restrictions, you may be thinking about ways to change your business once again.

Will you go back to the office? Will you continue to work from home? Or you may be erring towards a hybrid between the two.

Perhaps you’ve tried new ways of working over the past year that have been very effective. Perhaps you have seen your business in a fresh light.  More likely you’ve been severely stressed by the whole situation, either due to lack of work, or too much as you’ve been trying to keep the business afloat with a skeleton staff, whilst having to furlough employees and save costs.  It’s been a distressing time for every business owner and their employees.

But, as we’re beginning to ease out of lockdown, now is the opportune time to seek out the positives, emerge stronger and more resolute, towards a better, improved future.  It’s an opportunity to shake off the old (bad) habits, and decide what needs further refinement and evolution. Where can you make things more efficient and easier to run? How can you make yourself and your team more productive?

This is your chance to really optimise your operations and ensure the best possible work-life balance going forwards. If you can rethink your systems and processes and get them in place now, it’ll free you up to set aside time to focus on the projects and growth plans that will take your business to the next level.

In the past you may have felt unwilling to delegate or outsource, thinking no-one else can do things as well as you can. Maybe you feel a lack of clarity on which roles would be required in the business and when to recruit or outsource (and how many hours). And how often have you felt that taking a holiday, or time off for health reasons, has been difficult as it causes your business to grind to a halt?

As the world starts spinning again and business begins to pick up the pace, how will you ensure that you don’t just get stuck in the gravitational pull of the day to day operations of your business, finding yourself back at square one?  This could be your perfect opportunity to break that vicious circle, dedicating a solid percentage of your time to focusing on a more strategic orbit to rebuild your business, on stronger, more solid foundations.

Your Sacred Time – spend it wisely!

My previous blog Live to Work or Work to Live explored how to stop and take stock of your current business situation.  Review all the day to day tasks and activities you’re involved in and evaluate how much value they’re contributing to your bottom line.

The proactive and important tasks to prioritise in planning your day or week are those that lead to generating revenue.  If not, they need to be streamlined, automated, delegated or avoided all together.  You need to reduce the amount of your sacred time you’re sacrificing to the reactive, urgent or low value jobs in your schedule.

In this blog I’m going to expand on this theme, but from a slightly different perspective of rethinking, or designing, the job roles that your business may need to recruit or outsource, to let you eliminate them from your To Do list and calendar, all together!  You will free up more time to dedicate to your ideal business design and growth.

Task & Time Tracking – Yes, It’s a Valuable Exercise!

Whether it becomes a permanent system, or just for the sake of getting to grips with what you should or shouldn’t be doing, the first step you HAVE to take is logging the tasks you are working on, and the TIME it’s taking you to complete them.  We all hate it.

Lawyers, Solicitors, and Accountants are renowned for logging work in 6 minutes chunks (that’s 10 slots an hour they have to account for), but despite how petty or detailed this may sound, there’s method in their madness.

Productivity requires output to be measured against input.  That is, how much work you or your team produce, or turnover generated in the time you’re paying someone to do it.  If your qualified accountant is costing your business upwards of £20 an hour, you should ideally be getting some sort of reporting or feedback as to how they’re spending their time because if their output is not billing sufficient turnover to cover this outlay, then it’s costing your business money and eroding your profits.

So if you’re a business owner, either working on your own, or with a small team of employees, you’ve got to understand the nitty gritty detail in order to start designing your escape route out of the detail and into your strategic orbit.

Hours Tracker App – no I’m not on Commission

If you’re not already using a similar technology or your existing software doesn’t have the functionality, one simple solution I’ve been using for the last 6 years is the Hours Tracker App.

I’ve unashamedly included a screen shot of a recent weeks’ log to demonstrate what it gives you (whilst protecting the innocent – there’s no client information visible).  This was during lockdown, so not exactly pumping out 10 hour days.

The app is so easy to set up with different tasks and Client jobs, to monitor the time you spend on their projects or services.  The set up would be completely dependent on the key activities for each job role you’re needing to track.  Once it’s set up though, it’s a simple case of tapping the screen to log in or out.  If you set up location finder it will even log you in and out automatically if you go to visit a supplier or client’s premises, so you don’t have to worry about logging time when you’re out on the road.

You can add activities and times manually.  I sometimes spend 5 or 10 minutes at the end of the day adding bits and pieces that I may have forgotten to log at the time.  The minute by minute detail isn’t too critical, it’s the bigger picture of how much time you’re spending on specific clients jobs or your key, goal achieving, PROACTIVE tasks that’s important to monitor.

At the end of each period, whether you want to see it weekly or monthly, regular reports can be emailed to your inbox with a complete summary.  It’s also extremely powerful to look back at how much time you’ve spent on the things that you probably shouldn’t be doing.  The most common time thieves distracting you from the proactive, high value work that’ll generate revenue are emails, business administration (paperwork, filing etc), accounts and bookkeeping, order processing and invoicing.

The time logs will give you a reality check as to where you may be spending a disproportionate amount of your valuable time on low value work.  In turn this will sensitise you to scheduling and planning your time better to focus on the proactive, valuable stuff that’s going to make you money.

But the question still remains as to how to get this reactive work completed so you can get into strategic orbit.   The main advantage to collecting this information, even if it’s just over a month or two, is that you’ll have the foundations of determining what job roles you may need to bring onboard, or what to outsource to make better use of your own time.

Recognising the Threshold Point

And this brings us neatly to the beginnings of designing your Business DNA processes and structure. The time logs serve to identify whether the amount of time you’re spending on the low value administrative tasks have reached the threshold point of undermining your value to the business.  Using the information of the tasks needing to be done, how much time you roughly spend on them, you can establish what resource to buy in to free yourself up.  It may prove a bit of a wakeup call when the stats show you the reality.

The most obvious starting point for most SME business owners, is administrative support.  Flexibility is key in finding a suitable candidate that can offer a range of skills including the paperwork, data and bookkeeping, invoicing, order processing – essentially, the back office admin that is essential to keep the work pushing through and the cash flow buoyant but can be delegated to a cheaper resource than yourself.  You don’t have to fall into the trap of perceiving every job has to be a full-time permanent position.  If you have measured the time required for all the tasks you want to bundle into creating a specific job role, that same detail will highlight whether this is 1 day a week or even just a couple of days a month, and you can calculate the salary and advertise the job accordingly.

The important point here is that with the information you gain from logging task and time you are gathering valuable intelligence to build your business in a controlled and efficient way, to enable you to step away from the day-to-day minutiae and find time to work on strategic projects.

Define Your ‘Company Way’

The second major benefit of documenting and tracking the time spent on tasks is taking the opportunity to draft a step by step procedures of HOW you want the work to be completed.  Where do you want the data storing, how do you want documents filed, what are the time frames you need things done by to avoid backlogs building up, or to achieve your client service delivery expectations etc.

This lays down the foundations of your future business processes, procedures and policies designed to ensure standards and quality of service will be adopted by new staff members.    Getting these things documented in writing (such as a Company Handbook), makes onboarding new employees quicker and stress free.  They will have a crib sheet guiding them through how to do the job, so you know it’ll be done to your preferred best practice, defining the “company way”, and avoiding you paying for a new recruit to reinvent the wheel.

Don’t think this has to stifle creativity.  If the team feel there are better and more productive ways of doing something, then they should be encouraged, and a forum created, for ideas to be nurtured.  The processes or procedures manuals can be updated and improved on as the jobs evolve and the business grows.  Without procedures, individual employees tend to muddle their own way through, which may not be the most efficient, best quality and is not easy for someone else to pick up if they are on holiday, off sick, or leave the company.  Those businesses that don’t develop their processes and procedures are invariably the ones receiving countless customer complaints, have a burnt-out frustrated team, and a business owner who spends their life fire-fighting.

Don’t fall into that trap.  For a few weeks or months of putting in time and energy to apply yourself to designing how your business is going to operate, building the right job roles to deliver that model, and positioning yourself to manage and lead rather than do, you will reap the rewards.  Find your Escape Velocity and you can reach your strategic orbit the business needs you in, to deliver the long-term goals, achieve your financial aspirations, and the work life balance you deserve.

YOUR NEXT STEPS TO GREATER PRODUCTIVITY

 Alluxi is here to offer you support through these times of change, bringing a facts and figures approach to evolve your business and realise your goals.

As a first step towards identifying your current business challenges and evaluating where your future opportunities exist within your business, we invite you to complete the in-depth Alluxi Business Success Scorecard delving into the 10 key critical success areas.

Take 15 minutes to respond to the scorecard and get your results within minutes.  You’ll have the opportunity to book a follow-up Productivity to Profit Breakthrough Session to find out how you can implement rapid and measurable improvements.

Click here to take the Alluxi Business Success Scorecard now

The post ESCAPE VELOCITY – Reaching your Strategic Orbit appeared first on Alluxi Consulting.

Is there Hidden Opportunity in Your Business?

There’s a saying that ‘What you Don’t know Won’t Hurt You’.  In business however, what you don’t know could be significantly impacting your profit potential.   When working with business owners, Alluxi’s key focus is to illuminate hidden opportunity in your business – stripping away layers of inefficiency and misconception, to highlight and exploit your true productivity potential that can translate into greater profitability.

As a first step, the Alluxi Launchpad Workshop, including a free Alluxi Business Success Scorecard, provides a taster of the Alluxi toolbox and techniques. In a short half day workshop, we do a deep dive into the detail of your business.  It doesn’t take long to expose where greater productivity can be achieved, and how to maximise the profit potential for your business.

In this month’s blog I’m bringing live examples that turns on its head the belief that ‘What you don’t know won’t hurt you’. From SME’s in three different industries, these short case studies demonstrate how looking at things from the perspective of a productivity expert, quickly uncovered additional profit potential – which may not otherwise have come to light had we not had the discussion.

Covid Restrictions Unexpectedly Created Greater Efficiency

As much as the pandemic is causing chaos for most businesses, for the care company I’ve been consulting to over the last 2 years, a compliance requirement from the Care Quality Commission (CQC) unexpectedly boosted this dynamic organisation towards greater productivity.

Providing domiciliary care, the business was required to minimise the number of individual carers visiting vulnerable clients, to reduce the potential spread of the virus.  Some clients receive up to 4 visits a day between dawn and dusk, each requiring different services and skills from their pool of resources.

With over 100 staff in the field on any one day, some without transport reducing the geographical range they can cover, the logistics can be complex.  Adding the extra parameter of minimizing the number of people visiting any one client into that mix, those logistics become even more problematic. 

Initially I was asked whether a spreadsheet could be created to coordinate, manipulate and manage the different combinations, postcodes, and visit types through pivot tables.  As I already had a broad understanding of their planning software, I suggested we review the possibilities of using the tools already available to them, rather than re-invent the wheel using a clunky, fragile and potentially corruptible spreadsheet.

A short Zoom call, brainstorming the functionality of the software with the MD, Registered Manager and one of the Coordinators, resulted in a list of queries the registered manager could approach their software support company with.  Within 2 days of setting up “clusters” on the system for specific postcode areas, a pilot was carried out in one small geographical zone.  This quickly achieved the desired results of reducing the number of different carers attending each client, reducing the COVID risk, and the concept was successfully rolled out company wide. 

Now, the upshot of adapting the working practices to comply with regulatory requirements, even though it’s only been functioning for three months, has provided new insights and benefits from a commercial perspective.

Because the system has been set up to schedule care visits in much smaller geographical zones, the travel time and mileage costs are significantly reducing.  Additionally, as volumes grow, the time now freed up can be optimised to schedule in more clients.  Carers are paid per visit so this will boost their income and the business can offer their existing team more hours each week as demand grows. 

From a less tangible perspective, there are the longer term benefits of reducing recruitment and training time. Clients receive a more consistent service, and probably build a better relationship with their carer.  The team enjoy enhanced job satisfaction as they, in turn, get to know their clients better too, as well as the opportunity to increase their earnings if they wish.

Overall, it’s a three way win – for the clients, the staff AND the business.

Productivity vs Creativity

Behind the technical development work, web design involves a large degree of creativity, and the perception exists that maintaining productivity levels stifles creativity.   Working with the Directors & Project Managers of a thriving web agency, the surface issues highlighted that projects were running over budget, eroding the profits.

The Project Managers were spending too much of their working day updating and manipulating spreadsheets to try and keep on top of scheduling the outstanding work.   Although their existing software had extensive project task lists and the amount of work remaining to be completed was visible, estimates of how much budgeted time was still required to finish the job were not visible.  The project management was task focused, but not time managed.

This lack of reporting systems or logging time, meant information was not readily available to monitor how much time was spent on each project.  Individual projects could not be managed to ensure they achieved the required profit margin.  It was also not possible to tell whether sufficient jobs were completed in a week or over the months, to recover the overhead costs of running the business, until the financial reporting was completed a couple of weeks after each month end.  By that time it was too late to act, and address the inefficiencies.

As our work evolved, and their understanding grew of how productivity directly affects profitability, the Directors quickly recognised it would be a key measurement needed in the business.  They would need to track and monitor the time spent on the design, development and launch of the web packages, as well as the management and administration time involved in delivering the projects.

Despite our best efforts to establish productivity measures by asking the team to log in to projects on the company software being tested at the time, the software simply didn’t have the capability to provide meaningful productivity measurement reports.  We had to either revert to manual tracking and reporting mechanisms or look for a different software.

As manual tracking would add, rather than detract from, the already overburdened administrative tasks, the business owners took the bull by the horns and did their research.  Having only implemented a new software package the previous year, they took the brave decision to adopt a completely new software, that would deliver the productivity reporting, and start over again.

This has paid dividends (no pun intended), with information now being available to report on the levels of resource dedicated to the projects, compared against budget.  The team can be better managed to focus on what’s behind schedule, where too much time has started to accrue on individual projects, or where more projects can now be started as the work is being finished more productively. 

Additionally, as the time logs begin to provide more meaningful information as to how long each part of the project is actually taking (rather than estimating), this can be fed back into the budgetting for more accurate quotations in similar projects, for future quotations.

The company has the luxury of using this reporting and the data to decide whether to increase the profit margins by maintaining their pricing structure but using less resource, so achieve higher margins, OR maintain their current profit margins, and pass on the productivity improvement to the client, making themselves more competitive in the market.

The important point here is that had they not known the detail of how much time the programmed tasks would take, they would not have had the facts and figures to drive and inform their strategy decisions.

Hidden Figures

A prospect of mine, launching a radical new Accounting practice, approached me to deliver the Alluxi Launchpad workshop.  The business owner is hugely ambitious, and determined to bring accounting into the twenty first century.

Despite having a robust strategy document, there was no financial road map to match sales volumes or financial forecasting, and stress test whether the business would be profitable in the first year or two of trading.

In a few short hours, through the Launchpad Workshop, we created three foundation tools to focus and galvanise the business owner into action over the coming months.

1. A working business growth plan was delivered which the Director can update with real time information to immediately see the future impact of sales volume growth and resource costs on profitability.
2. A resource requirement plan will automatically calculate, based on the forecast sales volumes

a) Whether the existing resource in the business has reached its maximum capacity, and

b) how much additional resource will be needed at specific points in time, so it can be planned and recruited in advance

3. The workshop also provided an overview of the management systems and potential key performance indicators to drive the business forward to ensure profit margins will be maintained.

Getting the numbers and calculations out of the owners head and into a working spreadsheet immediately highlighted that the proposed forecast sales volumes versus the costs and expenses, would not produce the desired income and profit margin.  But by reworking the numbers and seeing the impact on the gross profit, the Business Growth plan crystallised exactly what would be required to achieve the results they wanted, and a future crisis has been averted.

What you Don’t Know Won’t Hurt You

In summary, these three examples demonstrate how, through opening up to fresh ways of looking at your business models, or how your operations are managed, your business can take a few simple steps in a different direction and your profits will grow as a direct consequence.

As business owners, we’re not always well versed in the art of running and managing a business.  This is the key downfall of many startups, where the business owner is an expert in the product or service they deliver, but needs specialist expertise to translate your business from the kitchen table, scale it up to a profitable enterprise through the path of least resistance.

Reach out if you feel there’s latent potential in your business, but you’re just not sure how to harness it.

YOUR NEXT STEPS TO GREATER PRODUCTIVITY IN 2021

 Looking ahead into 2021, Alluxi is here to offer you support through these times of change, bringing a facts and figures approach to evolve your business and realise your goals.

As a first step towards identifying your current business challenges and evaluating where your future opportunities exist within your business, we invite you to complete the Alluxi Business Success Scorecard. Take 15 minutes to respond to the scorecard and see how your business scores in 10 key areas.  You’ll be invited to book a follow-up Productivity to Profit Breakthrough Session to discuss the results in more detail, and identify how you can implement rapid and measurable improvements.

Click here to take the Alluxi Business Success Scorecard now

The post UNLEASH YOUR PROFIT POTENTIAL appeared first on Alluxi Consulting.

Are your manual processes a barrier towards greater productivity?  Do you engage and empower your teams to strip away waste & inefficiency?  Do your staff embrace continuous improvement as the norm?

My 5 blog series for business owners and leaders, will focus your efforts to emerge renewed and reenergized after lockdown

Principle 5 – Continuous Improvement is a Culture, not a Department

The last 4 blogs in this series discussed how the principles of LEAN can be applied to any business. The previous four principles have provided you with a framework of how to 

• Define and review your current lean value stream
• Eliminate waste, whether that’s time, energy, materials, or costs, from your existing processes
• Create a flow of work through the business based on client or consumer demand
• Ensure that every step of the process is designed to achieve first time quality 

The final principal of LEAN is to build on all of the above to nurture and sustain a culture of continuous improvement.  That is engaging and empowering every member of your team, to adopt a culture of improving their work processes in small incremental steps, following the Plan, Do, Check, Act cycle of a robust management system.

If you can’t measure it, you can’t manage it!

I’ve often extolled the virtues of the phrase “if you can’t measure it you can’t manage it”.  In continuous improvement behaviour, the small problems and points of potential waste in the way people work, is not immediately obvious let alone measurable.  Your teams need to be encouraged to take the initiative of coming forward with ideas and suggestions as to where these tiny, seemingly insignificant, imperfections may be occurring in the everyday minutae of their work.  This takes some training and practice as well as regular reviews and team chats to build their confidence in coming forward.

Kaizen

Toyota employed the idea of Kaizen, the everyday improvement in all departments and areas of the organisation, to encourage all the staff in the cause of fixing problems, and raising standards of excellence.  Those businesses that make significant training investments to equip and empower the front line workers with the skills and tools they need to remove waste, inefficiencies and drive improvement, are significantly more successful when applying these LEAN concepts.

However, the improvements must be tangible and based on hard data gathered over a period of time, not just based on gut feel or perception.  This brings us round to the point of measuring in order to manage the performance and quality.  This is where the simple PDCA cycle of Plan, Do, Check, Act (check out the Deming or Shewhart cycle) can be applied on the front line.  Once the inefficiency or problem has been identified this cycle can then be used to determine how to reduce or eliminate it.  

PLAN

The first step is to establish how the process, or behaviour needs, to change to achieve the result needed, ie. how will the work be done differently to achieve first time quality or reduce the time or defect?  Depending on the root cause and complexity of the problem, this might involve a team brainstorming session, or may be as simple as the employee discussing possible solutions with their manager and given the go ahead to test these.  At this stage it needs to be agreed what parameters or information will be gathered to measure how successful the change is, in reducing the problem.

DO

Go ahead and implement the options for potential solutions in the work place.  During this step the employee needs to record and take the measurements agreed in the Planning stage.  This may be the time taken to complete a step of the process, the number of rejects or complaints that arise compared to previously, over maybe a day or a week depending on the frequency or number of occasions the process has to be carried out to gather enough representative information.

CHECK

Analyse the date and the results gathered from the DO phase and evaluate against your goals or targets of expected/desired outcomes.  Using charts or graphs is sometimes easier to immediately visualize the impact (or not) on improving or reducing the problem. You can then start to see which changes work better than others, and see if they can be further refined to really reach the optimum working process.

ACT

This final stage to Act, or Adjust, is where the process is improved.  The data gathered from the Do and Check phases help identify issues with this process.  These may include knock-on problems, non-conformities with the system or work flow, opportunities for improvement, inefficiencies or other issues that results in poor quality, defects, rejects or complaints. 

At the point of taking action or adjusting the workers behaviour, root causes can be further exposed and eliminated by modifying the process.  The end of the ACT stage is when the process has better instructions, higher standards or increased goals.

Planning for the next cycle can proceed with the improved results forming a new base line ie. your now improved process becomes the norm, and future improvements would be measured against this – not the previous base using the old methods.

It is this incremental shift in the departments base performance measure that defines continuous improvement – gradually spiraling towards an ever increasing perfection – although it’s arguable that in a shifting market place, and new technologies being used, true perfection would ever truly be achieved. 

Lean companies give their employees total authority to initiate change at their respective level of responsibility. The PDCA Cycle depends on the initiatives being carried out in a disciplined way which maintains the employees accountability at all times.  However, with greater clarity and transparency for the team member to demonstrate how their ideas have been instrumental in improving the results of their area, the business owner will be better placed to reward their efforts and gain greater loyalty and employee engagement amongst their teams.

The post LEAN PRINCIPLES FOR SME’s Principle 5 – Continuous Improvement is a culture not a Department appeared first on Alluxi Consulting.

Are your manual processes a barrier towards greater productivity?  Do you engage and empower your teams to strip away waste & inefficiency?  Do your staff embrace continuous improvement as the norm?

My 5 blog series for business owners and leaders, will focus your efforts to emerge renewed and reenergized after lockdown

Principle 4 – Jidoka, First Time Quality

Have you dipped into the detail of how your staff are delivering the product or service you provide to your customers? Do your business systems include a log of the number of complaints and reasons why the client is unhappy?  These are key indicators that every business should be monitoring regularly to achieve maximum productivity from the hours and materials invested in delivering first class service or top quality products, first time, and every time.

The Japanese refer to this as Jidoka – First Time Quality – building in quality as an intrinsic element of production, or service delivery, solving problems in real time, and as close to the source as possible.  The main goal of Jidoka is to be free of defects.  The idea originated from an automated loom, developed by Sakichi Toyoda, of Toyoda Loom works, which later became Toyota.  This new mechanism automatically stopped the loom working when a single thread broke, thereby preventing any faults or flaws in the fabric, and ensuring a perfect weave.

Introducing lean principles into your own workplace will empower your teams to stop the production, or alert management to a point in the service delivery which doesn’t deliver the perfect customer experience.  In Japan this is done by pulling a cord, the Andon, to activate a visual and audio alarm to alert a supervisor or support personnel to change or solve the issue so it cannot reoccur in the future. Safety is managed hand in hand with quality in this respect, if doing the work appears to be unsafe or represents a hazard to the workers.

Get it Right First Time

Getting things right first time is ultimately more efficient, and Jidoka is the main reason why companies practicing these Lean principles will be more successful at improving quality.  Jidoka is one of two pillars of the original Toyota Production System, the other being the Just in Time principal (JIT).  This quality control process applies four key steps

1. Detect the abnormality or defect
2. Stop the work/process
3. Fix or correct the immediate condition
4. Investigate the root cause and install a countermeasure

In a large percentage of businesses the quality control often only reaches step 3, where an interim correction or adjustment is made, but the temporary “sticking plaster” fix is consequently absorbed into the work flow; it becomes the norm, adds a small and probably invisible inefficiency of extra work into the process, without actually resolving the root cause. 

A Multitude of Small Hidden Inefficiencies

However, when this quick fix approach is replicated dozens of times through the business, these small inefficiencies build to a point where productivity suffers dearly, and the managers find it difficult to unravel what the root cause problem was in the first place.  This is when you might find customer complaints growing, or product returns increasing, costing you time and money to rectify or replace.

Correcting this, reviewing the whole work flow and process steps then becomes an expensive and time consuming exercise to clean up.   Investigating the root cause and installing a once and for all countermeasure solution is the key to achieve first time quality, every time.  Businesses must develop their quality performance indicators around each defect or abnormality, to monitor whether the root cause has been detected, and check the countermeasures implemented are being effective.  

In next weeks final blog of the Lean Principles for SME’s, I’ll be concluding with Continuous Improvement – empowering your entire team to improve their work processes one step at a time using the simple cycle of Plan, Do, Check, Act.  

The post LEAN PRINCIPLES FOR SME’s Principle 4 – Jidoka, First Time Quality appeared first on Alluxi Consulting.

Are your manual processes a barrier towards greater productivity?  Do you engage and empower your teams to strip away waste & inefficiency?  Do your staff embrace continuous improvement as the norm?

My 5 blog series for business owners and leaders, will focus your efforts to emerge renewed and reenergized after lockdown

Principle 3 – Demand Regulated Flow

On the 1^st December 1913, Henry Ford set up the first moving assembly line for the mass production of an entire automobile.  His novel idea reduced the build time of his cars by over 80%, from more than 12 hours to just 2½.  This was the most significant piece of Ford’s efficiency crusade, but it’s limitations became apparent as the demand grew for more variety.  The “any colour you like so long as it’s black” phrase we now associate with Henry Ford, served well, until the changing desires of the customer started asking for something other than a Ford Model T in black livery.  

This is where Toyota took Ford’s process a step further. They made changes to their manufacturing process allowing for more variation in the workflow, without returning to inefficiencies.  They made technical changes, quizzed and challenged the progression though the work flow, and strengthened communication between different process teams. 

Ford knew the importance of not creating large amounts of surplus stocks and inventory. He managed his supply chain to have enough materials to hand, to manufacture the cars based on demand.  This had to be balanced to smooth out the delivery service so that cars consistently arrived on time for the customer.

Fords initiatives meant striking the best deals with suppliers, managing inventory so as not to tie up cash on the shelves, and making improvements on the front line that led to the reduction of waste.  You can read more about eliminating waste in my blog Click Here.

Just In Time Delivery

In the 21^st Century, we are surrounded by the benefits of adopting this LEAN just-in-time flow delivery principle.  This states that all activity must be triggered by demand.  You don’t “push” materials into the flow but wait for a demand trigger to “pull” product or service delivery along.

The command to produce is initiated by the customer, with their order moving in the opposite direction to the normal flow of production or delivery.    For example, you can walk into a MacDonald’s restaurant, and have your meal ordered, paid for, cooked and packaged within minutes of arriving at the counter.  Customers perceive a good quality service when they get their product when they ask for it.  

Demand forecasting is crucial in this principal. Failing to forecast accurately can massively affect your cash flow and profits.  MacDonald’s have developed their own, very sophisticated forecast application.  Their point-of-sale data is generated on a daily basis at item level, the product list, stock levels, inventory and shipments at the distribution centre.

They have achieved 100% outsourced suppliers, don’t own any factories, or distribution centres, and work with just 16 major suppliers.   MacDonald’s most important key performance indicator (KPI) is ‘no item may ever be out of stock’.  To achieve this they work to strict supply chain planning principles. 

1.  Expectations have to be crystal clear

Get talking to your supplier(s) so they can get to know your business and how they can better serve you.  The relationship will work so much better if you describe your needs and supply requirements from the outset.  Then regularly communicate with your suppliers to ensure they keep up with your business evolution.

2.  Continuously report & evaluate your data

Management control systems are the DNA of every business,  to providing leaders and managers alike, with key information (KPI’s) on time, so you can take informed decisions on where problems exist, how big an issue they are and what are the priorities needing attention at any point in time.

3.  Take the marketing plan into consideration

Where local or promotional activities may need to be factored in, which may affect the forecast.  There’s no point promoting or making special offers in your marketing and social media if operationally you can’t deliver and your customers are going to be disappointed.  Can you imagine what would happen if MacDonalds ran out of Happy Meal boxes or free toys?

4.  Compare the forecast to the actuals regularly

To monitor and measure the accuracy of the forecasting, to tweak and fine tune, and take corrective measures for continuous improvement is essential in achieving a just in time delivery.  The devil’s in the detail, and if the teams or supervisors on the front line take their eyes off the ball, then you’ll be in danger of a stock out situation and losing money. 

MacDonald’s has consistently climbed up the Gartner supply chain Top 25 over recent years, now in the top 5 Supply Chain Masters for 2019.  They manage to finely balance new product growth and the resulting complexity in their supply chain planning, management and execution.

How to apply this in your small business

How will this help you? In a smaller, younger company than MacDonalds?  Well the same principles apply.  The first step is to gather as much historical data you can from your previous trading figures.  You may need to get this by product or service channel, or for each variation of your offerings.

This will provide you with a base line to forecast future demand with.  Take your marketing and promotional activity into consideration to estimate by how much you can increase your sales.  With a firm historical base to measure against, you can then work closely with your suppliers to only deliver the stocks or materials needed to service the forecast volume.

You need to implement a solid management control system to provide frequent checks and balances, and monitor the situation closely enough to avoid a stock out situation. You don’t want to be letting clients down, but at the same time, you don’t want to be left with stock (especially perishables) on your shelves, tying up cash, and potentially drying up your cash flow.

The third, and possibly the most important step, is to monitor when things go wrong, have your team note down or report on the reasons; how much product, or how many clients were affected; & how the problem could be avoided.  Even better, give them the autonomy and power to resolve the problem as it happens.  There’ll be more detail on this in the next Blog on “First Time Quality”.

Regular team meetings, and feedback reviews are the key to continuously evolving and improving on your existing model.  Get sacred time scheduled in yours and their calendars to guarantee these are held regularly – without fail.

The next blog in this series will focus on the fourth Principal of Lean – Jidoka, First Time Quality – the practice of ensuring that quality is achieved, not as an overlay, but as part of the daily culture.  Ensure your teams are empowered to resolve problems as they occur, and as close to the source as possible, termed by the Japanese as Jidoka – “automation with human intelligence”.

The post LEAN PRINCIPLES FOR SME’s Principle 3 – Demand driven output appeared first on Alluxi Consulting.

Are your manual processes a barrier towards greater productivity?  Do you engage and empower your teams to strip away waste & inefficiency?  Do your staff embrace continuous improvement as the norm?

My 5 blog series for business owners and leaders, will focus your efforts to emerge renewed and reenergized after lockdown

Principle 2 – Eliminate Waste

Olympic swimmers work tirelessly to perfect their stroke, their breathing, even the milligrams of unnecessary weight in their costumes, caps and goggles.  They are perfecting their streamline shape and limb positioning to achieve the highest possible speed, with the minimum possible friction and energy expenditure in every stroke. The difference between gold and silver can sometimes be in 1000’s of a second, but it’s the difference between winning or losing.  The second principle of lean is to eliminate waste and activities that don’t add value to the end product.

By way of example, during my consulting days, I visited a food production facility whilst a line change was in progress. The workers were being rounded up by the supervisor and all dawdling over to the next line. There was no sense of urgency to get production in full swing.

The supervisor spent 20 minutes rounding up the team and mobilising them from one station to the next. The raw materials weren’t ready for start-up, and the supervisor was running round like a headless chicken trying to get everything in place. The eight people, and half hour late start cost the business 4 hours of wages, to change lines.

The manager explained they prefer to do overtime during the week than put on whole extra shifts on a weekend. This is a perfect example where the Lean principal to eliminate waste would be to improve the supervision, and line set-up to reduce or eliminate the overtime all together.  If we add into the mix, the profit margin of the additional volume of product they could produce in an extra half hour of production every day, that begins to add up to a significant loss in revenue and profits every year.

In a lean environment, this demonstrates so many areas to improve.  The waste might be eliminated so that the operators never have to walk across the production rooms to different lines; maybe a trolley makes the rounds ensuring the required raw materials are ready and waiting for the crew so they’re never left waiting to start the line.

“Lean thinking is a relentless quest to do more with less;

the continuous mindfulness and effort of everyone in the

business to eliminate all activities and costs that don’t

add value to the end product or service, that customers

would be willing to pay for”

Take the Waste Challenge

There are many categories of waste that can be explored in most businesses.  Toyota created 8 key areas. Take the waste challenge, and see how many of these you can start to eliminate in your own processes.

1. Over production

Producing more than you need is costing you time, materials, effort and cash sitting on the shelf if the products are waiting to be sold. The principal of regulating production based on demand expands on this idea.

2. Waiting Time

As we saw in the food production line above, if the work isn’t balanced and coordinated you could find idle time in the work flow. Working on an automated welding line in the USA, one of the key productivity savings we achieved was through slowing the line down to help operators achieve better quality and greater output. 

3. Work Flow & Movement

How do files, documents, materials or parts make their way round the workplace?  Are employees waiting for their work, or are they a bottleneck?  If one team is seen to be slacking whilst another is sweating to get the work done, this can cause resentment and conflict between departments.  A flexible workforce allows you to move people between work stations to avoid bottlenecks.

4. Over processing

How many times does that piece of paper get shuffled on the desk, or between staff & departments? How many times do parts or materials get shunted from one place to another due to lack of space or poor organisation and layout?  Duplication in handling not only increases the possibility of errors, poor quality, or damaged goods, but slows down the output of your teams.

5.  Inventory

Keeping excessive stock means money on the shelf has not been recovered in a sales invoice.  If the right information systems, and mechanisms are put in place a ‘just in time’ process can reduce the levels of stock on the shelves, keeps your cash in the bank and reduced the amount of space you need, so you could be reducing rent or premises costs.

6.  Repetitive Movement

Repetitive or unnecessary movement leads to a deterioration in performance. and in a physically demanding environment can also result in repetitive strain injuries leading to time off work. How far and how often do your team have to walk to the photocopier/printer?   That all adds to your cost and potentially a deterioration in employee motivation and engagement.  

7.  Defects

If work has to be corrected, or faulty parts are rejected the costs add up these are not reported, monitored and corrected timeously.  The same case study mentioned above, of the automated welding line, highlighted how quality deteriorated due to hidden issues causing productivity to be only half of the potential realised once the issues were analysed, measured and rectified.

8.  Unused Brain Power

If you’re not harnessing the creativity and ideas of your team, you could be missing opportunities.  By involving individual team members, getting to know their real skills and capabilities, or stretching them to try things they may perceive they’re not capable of, you’ll gradually get to know them better and understand how you can give them the opportunity to really demonstrate their true worth. 

The next blog in this series, will focus on the third Principal of Lean – regulating your throughput to demand.  This will review the most efficient arrangement of all the value creating steps in your value stream, and strive to synchronise your production or service offering, based on client demand.  

The post LEAN PRINCIPLES FOR SME’s Principle 2 – Eliminate Waste appeared first on Alluxi Consulting.

Are your manual processes a barrier towards greater productivity?  Do you engage and empower your teams to strip away waste & inefficiency?  Do your staff embrace continuous improvement as the norm?

My 5 blog series for business owners and leaders, will focus your efforts to emerge renewed and reenergized after lockdown

Principle 1 – The Lean Value Stream

As a business owner or manager, have you ever created a tangible, real life map of how you deliver your product or service to your consumers?  The impact of seeing the A-Z of your business in one place can be hugely powerful, and it’s the only way to get into the detail, and examine where the value lies in your delivery.

You may be shocked at the reaction of the team when they see how their own role actually drives one small cog in the larger engine.  They can see the importance of what they do in the greater scheme of things.  It’s a motivational exercise if nothing else.

Process Mapping – Do it the old fashioned Way

Charles Handy, a guru and thought leader in the field of management, recently wrote that the old fashioned business process mapping on brown paper is a thing of the past.  I tend to disagree, despite Mr. Handy’s prominence in the field of business.  I’ve successfully used brown paper mapping to engage the whole team in identifying how they deliver their product or service to their client.

Lots of brain storming and critiquing with big red marker pens, can break down the barriers between teams or departments.  When presented and managed in the right way,  it gets the business juices flowing, opens up discussion, and gets ideas out in the open, that may otherwise never have come to light.

One of my key mantras is “The price of light, is greater than the cost of darkness” (Arthur Nielsen!).  You’ll never know if there is a better, less costly way of doing things, if you don’t give the people working in the detail, the opportunity to say how things could be better.  The existing method could be costing you a lot of money if left unchallenged.

Lean environments are created by first looking at the big picture, your A-Z of delivering to your customers. That is all the steps involved from the time you receive an order to the point of delivery – the end to end timeline. This is called the Value Stream – as the characteristics of each step of your service, or part of your product, should make it worth paying for by the customer.  Each step in the value stream must contribute to the final product.

There may be different functional groups, departments and administration teams involved, but the performance measurements you choose should be based on the end-to-end performance of the entire value stream.  Not compartmentalized, which invariably contributes to waste and inefficiencies creeping into your overall value.

The biggest challenge in managing the value stream, is confronting and reviewing the “island” mentality between departments, each of which will probably have their own manager, employees, budget and KPI’s.  The people working at different stages of your existing process may have little or no interaction with those involved in the next stage, even though they have a shared role in creating the customer satisfaction.  

The consequence of this structure often manifests itself in a blame culture, as the work becomes imbalanced between the departments.  Backlogs may build up at one stage, if there are inadequate resources in the next.  This makes it difficult to visualize and manage the value stream as a whole.

Focus on the client journey

To be Lean, your business steps and stages would be better grouped around delivering service or product families, geared towards a particular type of customer need.  Each family would have a value stream manager, responsible for the entire A-Z of that service from order to delivery.  Often this may have a dedicated team, equipment or even physical or geographical location within the business.

To give an analogy, the company streams would be organised horizontally by product or service type (off the shelf, hybrid, bespoke), rather than vertically by function type (sales, operations, finance, logistics).

This model certainly requires a massive shift in the mindset of the business owner, management and front line teams, but as the Japanese giants that originally developed the Lean principles have proven, a Value Stream based organisation, can make significant improvements in its profitability, and client satisfaction.   

So, roll out the brown paper, get your highlighter pens, get a team day in the diary and get the ball rolling.  Once you’ve got your Value Streams mapped out, in my next blog we’ll move onto how to eliminate waste – the ongoing effort to eradicate those activities and costs that don’t contribute value that customers would be willing to pay for.

The post LEAN PRINCIPLES FOR SME’s Principle 1 – The Lean Value Stream appeared first on Alluxi Consulting.

Are your manual processes a barrier towards greater productivity?  Do you engage and empower your teams to strip away waste & inefficiency?

My 5 blog series for business owners and leaders, will focus your efforts to emerge renewed and reenergized after lockdown

Introduction

As UK companies of all industries are striving to emerge from the last 4 months of havoc wreaked by the COVID-19 lockdown, many business owners and leaders are recognising the opportunity to move their operations to the next level.  For those businesses who don’t fall in the category of front line services employing key workers, you are undoubtedly striving to stabilize your finances as a priority over coming months.  

LEAN is perceived to only be applicable in a manufacturing environment, but the fundamentals boil down to common sense reduction of waste – not just in materials, but time, energy, movement, duplication and quality control. These can all be improved towards a leaner working environment.  Improvements in any or all of these, will add value to your product or service, improve productivity, and boost your profits.

Using Lean is to take an aggressive stance on productivity barriers, and instill the philosophy of continually seeking ways to produce/serve more, with less.  In Lean thinking, any activity or outlay that doesn’t contribute directly to customer value is a waste and a target for elimination.  However, being tough on waste, doesn’t translate into a witch hunt, or about blaming people.  It’s about engaging everyone in the business to identify and contribute to fixing faulty processes, as the norm, not on a one off basis.

Applying Lean will only be successful if the culture in the organisation develops: 

Lean Champions

Employee Involvement

Employee Empowerment

My last blog series tackled the top 5 challenges business owners face during lockdown.  I provided insight in how to nurture employee engagement whilst working from home. 

If you’re team are working remotely, or a hybrid between home and office working, it’s worth reading that series before you start this one. 

The five LEAN Principles can be summarised as follow: 

VALUE STREAM – Define the value in your product or service, from the customers’ perspective, and determine which activities customers are willing to pay for.

ELIMINATE WASTE – Identify and map the selected value stream and eliminate waste.

PULL SYSTEM – Develop a ‘pull’ system to move work through the value stream according to client demand

QUALITY TO ZERO REWORK – Involve and empower employees towards a culture of continuous improvement

CONTINUOUS IMPROVEMENT – Sustain the lean initiatives to pursue perfection

Simples!?

Well no, there’s a bit of explanation behind each of these five principles.  If you’re prepared to embrace a few simple techniques, Lean can offer a comprehensive, straightforward methodology.  Productivity, and your profitability, can be optimized, with a long term commitment for a companywide continuous improvement.  

I’ll explore and expand on the first principle, the Lean Value Stream, in my next blog.

The post GET LEAN AFTER LOCKDOWN – Lean Principles for SME’s appeared first on Alluxi Consulting.

A 5 week series for business leaders needing to transform their business towards the “new normal”

Challenge 3  –  Ensuring the Right Things are Being Done in the Right Order

When lockdown was first introduced I posted a short blog with Six Survival Guidelines for SME’s.  This highlighted how managing employees remotely doesn’t have to be complex, but it can be more difficult to make sure they’re doing the right thing at the right time, to keep your business moving in the right direction. 

Working remotely from our managers, peers and colleagues adds a very different dimension to achieving goals and targets. Business owners and leaders need to be very specific and succinct in guiding the teams priorities and day to day goals. Each team member will react differently to the impact remote working has.  As their manager you need to ensure you keep them focused and proactive.

The 3x3x3 Approach

Worry and uncertainty are the enemy of productivity. Business must go on, and while we are in challenging times, this too shall pass. Once you’ve decided how you intend to run your business through these troubled times, clearly communicate the strategy with the team, and regularly thereafter. People make up what they don’t know, and clearly communicating how your company intends to survive and thrive is key. 

One very important step is to ensure any existing meeting’s scheduled, are maintained via video conferencing.  Keeping to schedule, come what may, is very grounding. There is so much we can do, when we’ve got the determination, to maintain business as usual – even when events are anything BUT usual.

An added ingredient you might want to include or set up separately to these normal scheduled meetings however, is the 3x3x3 approach.  This method is designed to stay focused and, importantly, keep everyone informed about current initiatives and plans. 

The 3x3x3 is very simple to use.  Each day, in advance of the team meeting, each staff member sets themselves up for success by writing down the following:

• 3 things they’re grateful for right now (always uplifting), and 
• 3 things they will achieve today to provide focus and, the most important actions they need to take.

Then at the end of that working day,

• Reflect on and identify 3 (or more) wins of the day.

These are all shared in the team connection meeting, and as team members see others achieving, should encourage them to do the same.  It should also create some great discussion points, transferrable insights, and opportunities for collaboration. 

As each individual is working through their 3 things they’ll achieve today, the manager can be guiding them towards the required outcomes if they’re not quite aligning their goals with your immediate business priorities.  Your priorities may be quite different during this crisis, than they are in normal circumstances, so this communication and coordination is critical.

As a side effect, it may create some healthy competition amongst the team, but don’t allow those who don’t always reach their goals, to get disheartened. You may find specific employees need a one to one, to deal with any negativity or feeling demotivated after a bad day. 

Working From Home & Winning Survey

Try the Working from Home & Winning Survey, to get better insight of how your team are really feeling.   The Free “Working from Home & Winning” survey gives you a quick and easy tool to get anonymous feedback from your employees working from home. It takes just 3 simple steps to set the survey up, share with your team, and receive  a summary report, in a very short space of time.   

Next week’s blog will address the fourth challenge Effective Time Management.  We’ll be sharing tips and guidance with you to ensure your teams are managing their time productively.

The post TOP 5 LOCKDOWN CHALLENGES – Ensuring the right things are being done in the right order appeared first on Alluxi Consulting.