Uncategorized

Operationalise Your Strategy

Posted on by Adam Payne

Benefits of Policy Deployment

  • Organisations with the capability to consistently execute their plans through the adoption of Strategy Execution outperform the market.
  • Organisational capabilities will be aligned to support the achievement of your company objectives.
  • Resources will be allocated to business processes in priority order (according to the importance/contribution the process makes to your business)
  • Your company can excel in the business/commercial sector in which it operates.

The Policy Deployment process has yielded some unbelievable benefits for me in my career and it’s one of those processes I recommend all businesses leaders introduce, (but I will also state if you are not prepared to apply the rigorous PDCA management process that goes with it, it’s not for you). I’ve been using Policy Deployment for 15+ years across multiple businesses, as an example: £1bn Turnover business, achieving £200m EBITDA across 38 sites globally, including Lean Savings within the first year of £21m. Done well, it works!

Some of you are probably getting to the stage or are currently producing budgets for your coming year. Now wouldn’t it be worthwhile aligning your Strategy and your budget requirements and drive some break through thinking into the process.

The process itself comes from a technique called Hoshin Kanri, which is a method devised to capture and cement strategic goals, well for me it does more that cement goals, it disseminates those goals into tactical projects that are owned, timed bound and measured.

There have been a number of English translations Policy Deployment, Goal Deployment, Hoshin Planning. I prefer Policy Deployment Process or PDP, but as you probably know from me by now, call it what you want just as long as you use it.

So What DOES it do?

  • It forces the clear identification of “How” we move ourselves towards our Strategic objectives.
  • It creates an alignment of all facets of the organisation on the key strategic initiatives (cross-functional teamwork).
  • Fosters a data-oriented, fact-based culture.
  • Reinforces the vision, but also clearly defines how we will get there (Based on “Who” does “What”).

What it DOESN’T do!

  • Achieve results if the management process isn’t changed (Moved to rigorous PDCA).
  • Achieve results if the “How’s” (Improvement Priorities) aren’t the right ones.
  • Achieve results if the “How’s” aren’t clearly defined.
  • Replace the need for solid Business Fundamentals (also known as Daily Management).

The process is intended to help an organisation:

take the Company Vision (desired end state, aspirations, business scope); the Strategy (3-5 Year Strategic gaps/objectives, high level plans for competitive advantage) and creates a One year distillation of these 3-5 year objectives.

It creates improvement priorities and metrics for tracking progress and indicates the resource responsible and accountable for them. A tactical implementation project if you like (you can go further with the process and state which projects need to be completed within each quarter of the year, to add additional focus).

Detailed action plans (A3’s) are produced for each one of the improvement priorities and reviewed on weekly/monthly/quarterly basis through monitoring of the PDP metrics.

These reviews should be held by a cross functional team who challenge each other, learn from each other and drive execution of the improvement priorities.

Typical Strategy Objectives may be:

  • Double Top Line Sales in 5 yrs
  • Double OP % to Sales in 3 yrs
  • Reject PPM Reduction by 90% in 3 yrs
  • Reduce Lead-time by 75
  • On Time Delivery to 100% in 3 yrs

Typical Annual Objectives may be:

  • Grow Top Line Sales by 15%
  • Increase OP by 25%
  • Reject PPM Reduction by 50%
  • Reduce Lead-time by 50%
  • OTD +20%

Improvement Priorities may be:

  • Quality: Create & Implement Rapid Defect Reduction Process, Implement DFSS on Critical Products
  • Delivery: Apply Lean ‘Tools to XYZ to Reduce LT, Implement Back-Office LT Reduction Process
  • Cost: Develop & Implement LCR Sourcing Plan, Launch Productivity Improvement Std Work Series in Assembly

So Why Use it?

97% of Businesses have a Vision
80% have a clear Strategic Plan
52% some Execution/Success
33% Significant Execution Success
Where do you think Policy Deployment is having an Effect?

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE”

Key Performance Indicators – Always an Emotive Subject

Posted on by Adam Payne

You may have seen my recent post if you follow me on linkedin regarding measuring Production Output with Value (£). With over 11000 views and numerous comments, this got me thinking about KPIs (key performance indicators) and business.

KPIs drive behaviour (no doubt in that) getting the wrong KPI can have a massive negative impact, the image below sums it up, wrong KPI with Targets = Lost at Sea, Wrong KPIs and No Targets = Shipwreck.

A good KPI should act as a compass, helping you and your team understand whether you’re taking the right path toward your strategic goals.

KPIs are key for any business and impact on a number of facets,

  • TO COMMUNICATE STATUS – ACTUAL v TARGET
  • PLANT LEVEL
  • BUSINESS LEVEL
  • WORK STATION LEVEL
  • TO DRIVE IMPROVEMENT BY FACT NOT GUESSWORK
  • TO HELP PRIORITISE IMPROVEMENT ACTIVITY
  • A CONTINUAL HEALTH CHECK FOR THE BUSINESS
  • TO CONNECT THE CUSTOMER TO THE PROCESS (something that gets forgotten)

One of the best ways to understand and align your KPIs is through generating a KPI tree, a KPI tree has 2 main purposes:
To clarify the responsibility (at each level) to ensure achievement of the correct result or activity that will deliver the Company’s and Customers goals, objectives and values.
Definition of responsibility: The responsible level is the lowest level that has the authority and the ability to 100% achieve the required result or activity.
To clarify the link between each result and activity to ensure appropriate prioritisation of activities

The KPI tree structure is separated into four different categories, these are as follows –

High level KPI – The key measure which drives achievement of the Company and Customer goals, objectives and values
Result KPI – The management tool used to measure the effectiveness of the activities completed to support the achievement of the goals and objectives
Activity KPI – The enabler to improve the current situation. (What you can see you can fix)
Activity – Either the physical actions taking place at any level in order to achieve the goals or the understanding of the current situation by Go Look See

Here’s a typical example of a KPI tree for “Delivery”

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE”

Get your Changeovers out of the Slow Lane

Posted on by Adam Payne

Benefits of SMED  (Single minute exchange of dies)

  • WIP and lot size reduction.
  • Finished goods inventory reduction.
  • Improved machine/resource utilisation.

Whether you are high volume or low volume business, changeovers is one of those things that can sap the living life out of your manufacturing process.

An unstructured/wasteful approach to changeovers (SMED, set-up, etc) has the uncanny ability to grow arms and legs, and those arms and legs can even grow arms and legs.

I first witnessed a set up reduction back in the early 90’s as a Kaizen Engineer manufacturing Aerospace Fasteners, we were being trained by a Japanese sensei in Lean Manufacturing, running three events on different machines; a centreless grinder; a header machine and thread roller.

Our team had the header machine, we videoed the actual set up so we could observe the waste within the process, much to our surprise there was 8 hours of it????? A WHOLE SHIFT WORTH OF CHANGEOVER for a production run that would probably last no more than 30/60mins depending on batch size, and batch size we were talking thousands. It was running three shifts.

Now bearing in mind, a major customer had flagged this as an high risk to their operation due to capacity and were forcing discussions on us purchasing another machine?????

At the start of the week, we we’re thinking a 50% reduction would be excellent, never in a million years did we think we’d get to sub 30mins, but we did!

Long Changeovers drive so much waste within your business, WIP, Overproduction, delays, waiting, transportation…..so they need to be focussed on.

The main benefits are as shown

Key Principle of SMED

INTERNAL SET UP

Internal set up activities can only be performed when the process is stopped and must be kept to the absolute minimum in number and time taken to complete. Internal set-up activities should be limited to the actual fitting or removing of the Tool or Die or Material ONLY.

EXTERNAL SET UP

External set up activity can be performed with the process running and therefor does not affect the core changeover time.

As many changeover activities as possible should be external, leaving as few as possible as internal activities.

The statement that always sticks in my mind from my early SMED activities is ELIMINATE, COMBINE, SIMPLIFY.

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE”

This is how not to make a Sale!

Posted on by Adam Payne

This week I was contacted by a Corporate Merchandise Company, a cold call asking for me. When I picked up they went straight into overdrive asking me about my company…it’s a debt collecting business isn’t it?

Me??????????? NO.

My brain starts going a million miles an hour (this is a bad opening, their process is way off of how to truly build a relationship, they’re not listening),

As I piece together his opening statement “so you’re a debt collecting agency” I’m thinking, so you did a google search for “TCMUK” then picked the first one, “TV channel” no wouldn’t be that, next one nah!!!!!   It must be the third one…

What a PRIME example of how not to know your customer avatar…..I actually appear third and fourth, but they still picked the wrong one????

Sales 101

Know your Customer. (your avatar)  

What they want and what motivates them to buy. Clarify who your market is, What is it your perspective customer is looking for but doesn’t perceive to be available. Where do they hang out?

Develop your Marketing Message

Market – Message – Media

Don’t just cold call, shout at them down the phone, then get abusive.

It doesn’t have to be in order but it is certainly a PRIORITY knowing your customer avatar.

Now this business does look as though they’ve had some success (financials), but their customer reviews/feedback is 1.4 stars out of 5, and reading some of them

“Would never use this company again! Used them once for diaries for clients and ever since we have been bombarded with hundreds of phone calls, despite telling them we would contact them should we ever need anything in the future. Constantly having to put the phone down on them. Safe to say we will not be using *&^%$ again. There is persistent and then down right harassment. STAY AWAY FROM THIS COMPANY!”

They certainly have room for improvement, 1.4 stars out 5!!!! Imagine what they could achieve with a completely different customer orientated approach. I think there will be a KPI driving that Sales behaviour some-where. Wrong KPI, Wrong Behaviour. (KPI – key performance indicator)

Getting and Keeping Customers

Focus on Customer Satisfaction then Profitability, DON’T focus on Profitability at the cost of Customer Satisfaction, you will have limited success and you won’t be in business for very long.

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE”

Processes, Growth and Scalability.

Posted on by Adam Payne

I’ve had a number of discussions this past few weeks regarding GROWTH and SCALABILITY.

One recurring theme is regarding processes, and when I mention that processes should be standardised, I get the normal “we’re growing and that one size standardisation doesn’t fit and this is a back-office environment’

Process Standardisation

Let me explain, every business is individual and has its unique way of doing things, but that unique way can still be standardised. Having a room full of 20 Service Call Associates operating in their own way results in 20 different outputs and potential chaos.

If you were to standardise the process (optimised, least way way of doing things) written procedures, your 20 Associates now operate in the same way and give a repeatable, stable output.

This standard way, considers;

  • Tasks and activities
  • Decision points
  • Cycle times
  • Work in process
  • Flow time
  • Sequence
  • Loops
  • Travel / distance

Standardisation and Growth

A business has 555 calls coming into its service centre, it’s normal work hours/week are 37 hours (excluding breaks, etc).

Our TAKT Time

37 x 60 = 2220 mins/week

2220 / 555 = 4 mins TAKT

Let’s say our Standardised Process has a manual cycle time equalling 24mins

Therefore, our number of employees to match demand and capacity is

Total Manual Cycle Time/TAKT which is 24 / 4 = 6 Associates

Growth

our calls increase to 740/week so our TAKT = 3 mins

As our process is standardised this SCALABILITY is relatively easy to accommodate

24 / 3 = 8 Associates required

So, our PROCESS IS SCALABLE!

PS: these standard processes are TRANSFERABLE, think McDonalds.

Many thanks for viewing my post and would you please share it with anyone you feel would benefit from the advice provided. 

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE”

Attention! – your Customers could be gone in 60 secs or less

Posted on by Adam Payne

Sales and Marketing

None of this is new and you probably heard it all before, but in my eyes that’s why it’s so important.

Sales and Marketing go hand in hand within any business, and every leader/owner should be working on their business (not in it) for a few hours a day.

But what do I mean working on your business.

Most businesses want to grow, so, you will have stated somewhere “I’m going to get from here to there by then”, now as an example this may be “Sales from £1m to £1.25m by end of 2018”.

So the working on your business (couple of hours/day), is all about the things you are going to do to get there. Now, you may have sales people, teams, etc.. this does not excuse you or absolve you of all responsibility in how, what, when, where, who and why in getting to that £1.25m.

Getting and Keeping Customers

This about your existing customers, new customers, finding new customers. (and attention is key, at 60 secs half your audience will have gone)

Examples may be:

  • Email campaigns, content, using the AIDA formula. (Attention, Interest, Desire, Action)
  • Sniper Marketing
  • New Products and Services
  • Reviewing your Social Media Impact (Google Adwords, facebook, twitter)

And don’t not underestimate the power of social media all because you are manufacturers, first port of call is having a website that is optimised and use friendly, something I’m currently sorting.

Sales Stats and Tips:

  • Over 60% of traffic is through mobile (phone/tablet). So, ensure optimised Mobile view first.
  • Over 50% of email is managed from mobile. Again, optimise for mobile viewing
  • At 60 secs half your audience will have gone (Attention is single most important word in marketing)
  • Your website load speed matters, big impact on ranking with Google.
  • Optimise your Linkedin profile, it’s not a CV, tell them where you add value.
  • 50 million Small Business on Facebook, 1.86bn active users, 66% log on every day. Search options are superb, but only 49% will support a brand liking, so how do we get in front of the others?
  • 56% of people would rather chat online than phone, you can now add chat boxes, Facebook messenger button, and more.
  • 67% will interact online with businesses.

But above all

DON’T FORGET TO ANSWER THE PHONE OR MAKE A CALL! (again remember attention, don’t answer in more than 5 rings and they’re probably gone.)

PS: It’s not the responsibility of your customers to keep you in mind, it’s your responsibility to keep you in their mind.

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE”

Do you have a Growth Mindset or a Fixed Mindset?

Posted on by Adam Payne

The past week or so I have come across the Growth Mindset in two different scenarios’, which made me think how this should be applied to business.

The first was with my son and his school, he was invited to an awards ceremony for “Achievement in Excellence”. This was a formal ceremony, smart dress, round tables, the lot. The school made a massive deal, and so they should.

What got me intrigued was the first presentation, “having a Growth Mindset”, the number one priority of the school was endeavouring to give all pupils a “growth mindset”, as opposed to a “fixed mindset”.

Now following on from that a few days later, I had a monthly magazine delivered and low and behold there is an article on the same subject, and the example given was regarding another school implementing the same principle.

Now, in the presentation and article they spoke about some of the behaviours that demonstrate a fixed mindset, for example “I can’t do that…”, “it’s alright for her, she does xxxx”, “you either got it or you haven’t”.

To be direct, when people with fixed mindsets come to an issue that requires more effort, more hard work, they conclude that they are no good at it. Does this sound familiar? It ultimately holds them back, not only in school but in BUSINESS!

I’ve come across this so much within businesses, “I can’t do that because”, “we’re different, it won’t work here”, “we can’t do that of x,y,z”.

A “Growth Mindset” works around those obstacles; learns from those obstacles; sees mistakes as interesting and grows from them; they have a genuine thirst for learning and developing.

One of the comments by the writer said “my dad always told me nothing worth having comes easy”. What we think about affects how we feel and how feel determines how we act and the actions we take.

Remember,
You have a choice of what to think about which ultimately determines your outcome.

For more on Growth Mindset click “Dr. Dweck’s discovery of fixed and growth mindsets have shaped our understanding of learning”

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE”

Manage by Fact NOT by Emotion

Posted on by Adam Payne

Sounds simple, but are you doing it. We are all guilty of making a decision by emotion, but is this the exception or the norm for you and or your business? Add to this the old classic “but we’ve always done it that way” ……

Here’s hoping it’s not the norm!

I’ve recently seen a business make 80/90% of their decisions on emotion, and my life had they made some bad decisions. When we took stock, and started to delve into the systems and extract data, boy did the data indicate something different.

When we begin to measure we to begin to understand, when we understand we begin to gain control, when we have control we can now improve. Always ensuring we are measuring the correct output/input, as a Key Performance Indicator (KPI) drives behaviour, wrong KPI wrong Behaviour.

Managing by Fact is the notion that real knowledge in the form of empirical analysis of results is the shortest path to the best business decisions. That may seem obvious, yet few companies follow that principle. Many leaders make strategic choices based on nothing more than business fads or the dubious recommendations of advisers who are afraid to challenge the preconceived judgements or the organisational status quo. Quantitative or qualitative data that measures how well the strategy is working is often the last concern. Thus, critical company decision making, relating to acquisitions, restructuring, new product launches, sales and marketing, operations and the like, often takes place in the dark.

Comments, we can’t do that because…our answer should be “then show me why, justify to me why, mange by fact and data to help me make that informed decision” it’s not going to be on emotion and hearsay.

Put it this way, when managing by fact the business I refer to highlighted opportunities worth £1m+, not bad for just making that informed decision.

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE”

Education and Industry, how do we get it so wrong?

Posted on by Adam Payne

Interesting discussion this week, especially regarding skills for industry.

On three occasions this week I’ve been in conversations where comments have been raised by business owners/leaders that the school curriculum is not aligned with what industry needs. How can this be?

But, when I think of my own experiences with my children, I’m not surprised.

My two kids go to different schools, the age gap between them is 2 years. If I take my eldest, he has just moved schools (based on his own fact based audit), his belief is that the new school gives him more options and a better chance of progression. This is his first year and if I use English as an example, his previous school never progressed him over 3 years, and at one point awarded him for his extra effort, he did extra lessons and again they awarded him but at the same time notified him he was moving down a set. This didn’t make sense to my son at all, nor to us. (We did question this, but that is another discussion).

The new school in less than half a term has progressed him up two grades, how can two schools be so different in approach and teaching????

Another example is science, he was in the top set at his previous school, but based on what information had been sent to his new school, he was placed in the lowest set? This was rectified after a few weeks as the teacher realised his potential and was even given and extra lesson.

The Education System is meant to be one of the most standardised/audited processes in the UK? How do we get it so wrong?

In one of the conversations we had 3 graduates (this was a round-table discussion for a future article by Stirling Media), these young adults were full of passion for engineering, manufacturing, the digital age but remarked on how little is taught on new technology or told about what future careers can be taken.

This too me is madness, particularly when we have stated as a country we need to bridge the skills gap.

When I was at Unipart my engineers use to link with a local girl school and we set tasks for them to do each year, as an example this could be a SMED project on a robot. The engineers would take them through the problem-solving roadmap and into implementation to see their results.

Not of all of them wanted to be engineers, but it certainly opened their eyes to what engineering and manufacturing can be as a career.

I know there are a lot of schemes regarding bringing Industry and schooling closer together, but how are we measuring their effectiveness? Because at the minute I don’t see it, and when I hear the comments from students like I have this week, I do begin to question.

I know this is crucial I just wish it was more of a policy, strategy within the government. Again, it may be, but a lot of us don’t see it.

Anybody else have any thoughts?

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE”

Manufacturing and The Internet of Things

Posted on by Adam Payne

The Internet of Things – IoT (Wikipedia) is the network of physical objects or “things” embedded with electronics, software, sensors, and network connectivity, which enables these objects to collect and exchange data.

The IoT has created a lot of conversations, some stating it’s all hype, some questioning it’s benefits more of something for the future and obviously the ones in support.

Now let’s not pretend here, the IoT is already here, we have smart houses, apps for lights, heating, music, etc. Recently, my neighbours installed a security system which allowed them to view, check, and switch their alarm on and off accessed from internet, this also alerted him to security issues around the property (the most important aspect). So we can’t say it’s not here already.

Now put this into the manufacturing environment.

Some renowned manufacturers have already started investing in hardware, software, and networking systems. Build the IoT infrastructure now to capitalise on its benefits.

I read in an article recently that GE anticipates $19 trillion in profits and cost savings projected over the next decade.

One major area I can see the benefit is Energy Efficiency. To be able to track all facilities, machines energy consumption on a granular level, this visibility will give feedback on a machines abnormal to normal status, something that we can action, countermeasure, control. It will highlight our waste, our areas for improvement, and better understanding of our costs and how to control them. And as stated this has to be a major benefit for manufacturing, something I certainly wanted as an Exec.

The ability to benchmark similar machines/resources, predict maintenance issues with surges in unusual energy consumption, highlighting the out of hours energy waste and being able to control and manage this. All of these will have a direct impact on the bottom line and this is just scratching the service.

The connectivity within production processes is another example, let’s say a machine is not running at optimal performance, this machine would send an alarm highlighting it’s situation to the production team, it could then slow itself down (as not to self-destruct) communicate with its upstream and downstream processes and slow them down limiting the amount of lost production and or downtime and controlling the standard in process stock.

Bosch’s Stefan Ferber stated “The Internet of Things allows for a new way of organising industry production: by connecting machines, warehousing systems and goods, we can create smart production systems that basically control each other without requiring any manual intervention.”

I will always remember the saying “ the Data will set you free” by allowing you to make “Informed Decisions”, can’t get much better than real time data, and that’s the possibility with IoT.

The Internet of Things global economic impact is massive. Approx. 25% of Global Manufacturers are already using IoT technology, this is expected to grow to 80% by 2025. In reading different articles/surveys most cannot put a definitive figure on the potential impact but the range is between $1.9 to $14.4 trillion dollars on the global economy.

Digital Manufacturing Stats from ASQ:

The American Society for Quality (ASQ) surveyed manufacturing companies that have digitised their processes and found astounding results:

  • 82% increased efficiency
  • 49% experienced fewer product defects
  • 45% increased customer satisfaction

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE”