Manage Your Business From The Rockies Not The Prairies

Writen by Martin Haworth

The day job as a manager is all about managing your people to deliver, to meet the needs of your customers or clients and generating success after success! Right? And you have consequences if that doesn't happen.

Worst case scenario is that you lose your job or your business, because your people haven't delivered. So the temptation is understandable. Get in there, dirty your hands and work your socks off making it happen.

Admirable, fulfilling even!

But how much energy have you got? How hard do your really want to work. Indeed, how long can you take the pace of keeping everyone else afloat. Before you fall apart, or it kills you?

Or, despite all your years of strife and giving your heart and soul for your business, you lose it, or your job, or both. It doesn't seem fair does it?

But there is another way - and it's easy.

Use your people better

Space ships sent off into the far universe, use the gravitational pull of planets to accelerate them onwards, just like gravity pulls us to earth. It's free energy!

The limited fuel that the rockets have, is used to ever-so-gently fine tune direction, so that as they approach the planet pulling them in, they alter their course to miss the planet and, with renewed energy, they carry on their mission. Clever stuff eh?

That's what you can do

If you play a bigger game than spending your whole life doing the job that others can and should be doing, in the false belief that you are 'helping out', then you aren't going to cut it. In fact, like I once realised, moving from one sized store to a bigger one - you cannot do it all - it's time to manage the business through the people - it's just too big for me now.

And that was a big and painful realisation for me

But I got it!

It came to me one Easter, when I was running a big store and I was filling up the Easter eggs. It was fun! But I wasn't doing what I was paid for - managing and even leading a great bunch of people, all of whom could do this better than me. It was time to do my job. The time had come to leverage their potential and create value using my unique skills and talents.

As it happened, my office was on the fourth floor (because it had a view!) and the business traded on the lowest two floors. And this became my metaphor for managing from high up. The Rockies, not the Prairies.

Even though I spent a lot of my time on the Prairies, I was, in my mind, way up high. I was managing the people from above. I was managing the great people I had.

I was able to step back from working 'in the business' to 'on the business', as Michael Gerber would say. And it made a great difference to me. I realised that part of it was showing my troops that I was working just as hard as they were, and, indeed, I could do their job pretty well.

Yet, I was also resisting where the stretch was for me - letting go of other people's jobs, and doing my own.

For me, it was a shift to the next level, Sure, I did my hands on stuff from time to time. But it was at my choice and to work with them to show soldarity and focus when the chips were down. But it was after the management stuff was done.

It was my way of bringing the Rockies down to the Prairies, yet enjoying the fruits of both.

Copyright 2005. Martin Haworth is a Business and Management Coach. He works worldwide, mainly by phone, with small business owners, managers and corporate leaders. He has hundreds of hints, tips and ideas at his website, http://www.coaching-businesses-to-success.com

(Note to editors. This article may be edited for use in your publication or newsletter. But please leave a live link to the website)

...helping you, to help your people, to help your business grow...

Lean Principles In Action

Writen by Adam Sommers

Abstract

The electrical products industry is one characterized by fierce competition, declining margins, and legislative regulations, all that have forced the majority of electrical product manufacturers to rethink their business models. This article describes a successful story from a leading electrical products manufacturer and its journey towards lean, which to date, has saved the company over $65 Million in hard –dollar savings.

Background

Tefen has worked closely with one of the world's leaders in Power and Control products. With worldwide consolidated sales exceeding $9 Billion in 2002, the company has roughly 200 manufacturing plants worldwide, with about half of them in North America.

In North America, Tefen has specifically worked with a division known for quality switchboards, switch gear, breakers, and other electrical components used within the energy, building, industry and infrastructure markets. The company faces stiff competition from General Electric, Siemens, and Westinghouse Electric in most categories. Given the level of world-class competition, the company has continually pursued strategies to improve its cost position, quality, and overall order fulfillment processes.

In the industry, this company is renowned for its ability to tailor its products to meet the specific needs of its clients. The ability and willingness to customize has created a competitive edge for them, while at the same time created operational challenges. Engineer to Order (ETO) products with a high degree of variability can often drive long lead time from design to production, large inventories, obsolescence, design control issues, production complexity, and inefficient scheduling, among other problems.

From 1996 to 2001, the highly competitive North America market and economic downturn drove steady margin erosion. In response, the company launched an enterprise-wide initiative to reduce manufacturing costs by 20-25% within two years at select manufacturing sites. Further, it set goals to build the skills base necessary to generate lasting continuous improvement, drive consistency in production systems, and optimize key areas of the supply chain.

A major plant in South Carolina was chosen as a key ETO facility to target for manufacturing cost improvement. With its 258,000 square feet of production space, large dollar opportunity, and products of strategic significance, it was a logical target. Tefen was engaged to understand the current state operation, define improved methods by applying Lean techniques, and then drive rapid implementation. The stated goal was to reduce conversion costs by a minimum of 20%.

The Situation at South Carolina

During the first week of the 3 week long diagnostic phase, Tefen worked with plant personnel to understand the current state of the operation. The Motor Control Center product (MCC), along with the Fabrication area (Fab), were the subjects of particular focus. Here, a number of key findings highlighted the need for dramatic operational improvement. Specifically, it was uncovered that the two areas of focus were characterized by:

-	Long changeover times  -	Excessive  WIP and Raw Material  -	Excessive active part numbers  -	Long lead times  -	A functional layout with poor material flow  -	High order variability  -	Inefficient labor utilization  -	Inefficient order entry processes  -	High level of overproduction and rework  -	High transportation costs 

These underlying issues hindered the company's performance at the plant level, which in turn, diminished the overall corporate operating result. Besides diminished cash-to-cash cycle time efficiency, the plant experienced

less than optimal order fulfillment performance, low inventory and asset turns, and high overall supply chain costs.

The Solution

During the second and third weeks of the diagnostic, Tefen defined a number of key levers to drive significant conversion cost savings. To conduct the diagnosis and quantify tangible savings, a number of tools and techniques were employed. For example, Value Stream Maps were created for both the "current state" and envisioned "future state" of the facility. Besides providing powerful visuals of the operations, these maps were used to quantify cycle times, inventory levels, number of operators, and the ratios of productive times to lead times. Another key analysis looked at the demand data to understand the volume/product/order mix. By coming to grips with the level of variation, smarter scheduling and better flow techniques could be devised. A full listing of analyses and the associated tools used to conduct them are shown below in Figure 1.

In Figure 2. the levers for savings and associated key activities are detailed. At the core of Lean is speed – process cycle-time efficiency is the overall defining Lean metric that paints the picture of a manufacturing plant's health. By applying Lean principles, Tefen was able to identify ways to dramatically improve cycle time efficiency, which in turn, pointed the way to a 21% reduction in conversion costs. Recommendations focused on several key areas including improved material handling through a revised layout, reduced touches and dedicated handlers, reduced changeover times through standardized work, a flexible workforce operating within a flowing cellular line, and a scheduling system based on customer "pull" rather than forecasted "push." In addition, Tefen recommended implementing a Constant Daily Output (CDO) system to produce the high volume products to a schedule. Instead of ramping production up and down in response to order volume, production of high volume material would be leveled based on order volume history.

Getting Results

Having identified what to fix, the next step was to put together a workable roll-out plan and begin implementation. Prior to the diagnostic, the pervasive culture at the SC plant was a typical one. There was a lack of urgency for improving things – inefficiencies were accepted as the normal mode of operation. One of the by-products of the three week diagnostic was an awakening among plant personnel. By including plant personnel as an integral part of the diagnostic process, new possibilities became apparent to them. Word spread and when it came time for implementation, there was more of a willingness to change. Further, Tefen's "Go-Fast" implementation approach instilled a true sense of urgency and importance throughout the plant. The "Go-Fast" approach is designed to obtain significant results within 10 weeks, achieve more than 50% of the targeted savings within 6 months, and foster a continuous change culture.

Figure 1.

  Improvement Lever	                Key Activities  Reduce Overproduction Waste	 -	Schedule starts based on a pull system  Align Lead Time Information Flow -	Define lead time across all systems  Improve Material Flow	-	Cellular layout and elimination of excess storage  Reduce Order Variability	-	Produce 80% of volume to a daily demand  Improve Labor VA Utilization	-	Flexible work force, 5S discipline, shorter C/O  Reduce  Transportation Costs	-	Load consolidation and lane simplification  Improve Order Processing 	-	Develop Constant Daily Output order generator  Standardize Work Methods	-	Improve C/O, eliminate multiple handling  Improve Inventory Management	-	Constant daily production on top 80%, use stores

At the SC plant, a number of dramatic changes were made which drove significant savings in a relatively short amount of time. Within the first 10 weeks, over 40% of the targeted 6 month goal was achieved, 30% greater than what was predicted.

Numerous changes were implemented to increase efficiency and reduce inventory. In the MCC area, a pull approach was employed to reduce WIP by employing a build trigger for the main structure. Prior to the implementation, structures and a related component were scheduled separately and were connected together at an area called plug-in. This created WIP of structures and the component waiting for their mates. By triggering the structure build when the component was done, the structure WIP at plug-in was dramatically reduced. In addition, the entire structure line was redesigned to balance the stations, shorten the cycle time, reduce space, and reduce the raw material inventory needed at the line. Production space was reduced by introducing U-shaped work cells in both the structure line and wiring areas

In the wiring area of MCC electronic work instructions were employed to allow the wirers to always have the latest revision print, reducing rework as well as part shortages.

To further drive efficiency and reduce unnecessary material handling, kitting and "milk run" concepts were implemented. With these techniques, fewer operators were needed as productivity rose with more time on task.

In the Fab area, the other area of particular focus in South Carolina, additional improvements were implemented. A cellular layout based on material flow and capacity analysis was created. Changeover times were greatly reduced by division of internal and external work content to maximize operator value-add time. Further, a constant daily output (CDO) scheme was implemented to help reduce the effects of variability. Level loading of Fab production was accomplished by observing the 80/20 rule where 80% of the volume is driven by 20% of the part types. For the remaining 20% of the volume, which reflected special customer orders, lead time was greatly reduced by using a Supermarket to provide a buffer to demand variability. The Supermarket technique allowed for a lead time reduction from 6 to 2 days.

Other improvements impacted the entire plant, beyond the MCC and Fab areas. Scrap reduction of over $40K month was accomplished via coil re-banding. At the plant, raw material arrives on a coil. When a part type is finished at its CDO quantity, the coil is taken off the press and re-banded instead of becoming scrap. Previously, before the re-banding implementation, 21% of raw material became scrap. Improvements in the Tool crib added another $100K in inventory reduction.

Implementation of actionable performance metrics solidified the overall gains and instilled a culture of continuous improvement. The metrics enabled a focus on reducing waste and drove operator empowerment at the cellular level. KPI's are now tracked at the plant level, the department level and the cell level to illuminate cost/efficiency, service level, quality, and continuous improvement. Examples of KPI's implemented include: CDO Stability, Supermarket space requirements, Planned schedule versus actual, and the percent of good parts out.

Looking forward, the outlook for further improvement is bright. About 60% of the total identified savings will be realized according to schedule. The remaining savings are on track to be realized within a year and a half of the implementation start.

About Tefen Tefen is a publicly traded, international operations consulting firm with seven offices in United States, Europe and Israel. The firm has over twenty years of experience in improving the overall operational effectiveness of Fortune 500 clients around the world. Tefen designs and implements solutions that enhance operational performance throughout an organization. The main areas of focus include operational excellence, manufacturing, quality, customer service, research and development, and supply chain management. All of Tefen's support programs are ISO 9001 and TCS (Total Customer Satisfaction) certified. Our hands-on approach has achieved success in delivering quantifiable and value-driven results. The company has remained profitable since its inception and currently employs over 250 professionals worldwide, 40 of whom are certified Six Sigma Black Belts.

Adam Sommers is the author and Partner at Tefen (http://www.tefen.com/). For questions or further information regarding this article, please contact Raymond Cheng, Marketing Manager, at info@tefen.com.

Adam Sommers, a Partner with Tefen USA, has over 15 years operations management and strategic planning experience. His background and expertise is in all aspects of organizational improvement including manufacturing productivity, supply chain management, and business strategy. Adam has worked with leaders in a variety of industries including Aerospace, Energy, Telecom, Electronics, Medical Devices, and Travel. Currently, he is helping an $8B Power Distribution equipment manufacturer achieve significant productivity gains via a focused Lean/Six Sigma program. Prior to Tefen, he ran the corporate strategic planning function for The Columbia Energy Group, a Fortune 200 diversified energy company. Adam received his MBA from The Wharton Business School and a BS in Aerospace Engineering from Polytechnic Univers

Who Has The Keys To Open The Door Of Success

Writen by Larry Galler

There, right in front of you is the golden door with a sign above it. The sign says "SUCCESS." All you have to do is open the door and walk through into entrepreneurship's holy grail. You grab the handle and pull. "Drat!" the door is locked. Who has the key?

We all have the key. It's right there on our key ring. But there are many keys on the ring and we have to find the right one to open this lock.

If there was one key that opened every door it would be easy. The problem is that each business, even businesses in the same industry, have different key factors for success and we have to discover which key will turn in our lock. For some businesses the door is locked because it can't get control of labor costs so the "efficiency key" will open the door. A fast-growing business needs more access to capital and the "vault key" will turn the lock. Another business needs to motivate the customer-contact people to become friendly and helpful and they need to find the "customer service key." Those keys and many more are all there, right on the key ring. The key to the door of success is discovering which key is the "Key Factor For Your Success."

You might go through all the keys at your disposal one-by-one… The "Strategic Planning key? Jiggle –turn-pull-cross fingers - Nope! The "New Customer Acquisition" key? Jiggle –turn-pull-cross fingers - Nope! The ""Shipping Department Dispatch" key? Jiggle –turn-pull-cross fingers - Nope! This can be a time consuming, long effort.

You might take some time to critically look at your business, go over your financial statements. Compare them to your business plan (No Business Plan? Maybe that's the Key!) with your financial advisors, survey your customers and prospects, survey your staff. Ask them all probing questions to discover the vital key factors that can radically affect your ability to unlock that door. When you discover and improve your "Key Factors For Success"

Larry Galler coaches and consults with high-performance executives, professionals, and small businesses since 1993. He is the writer of the long-running (every Sunday since November 2001) business column, "Front Lines with Larry Galler" Sign up for his free newsletter at http://www.larrygaller.com Questions??? Send an email to larry@larrygaller.com

Decision Support System A Snap Shot

Writen by Zarfishan Batool

The concept of a decision support system (DSS) is extremely broad and its definitions vary depending upon the author's point of view. A DSS can take many different forms and the term can be used in many different ways.

In a more precise way, it can be defined as:

"An interactive, flexible, and adaptable computer-based information system, especially developed for supporting the solution of a non-structured management problem for improved decision making. It utilizes data, provides an easy-to-use interface, and allows for the decision maker's own insights."

DSS are computer-based support for management decision makers who are dealing with semi-structured problems. With respect to computer terminology it can be defined as:

"Interactive computer-based systems that help decision makers utilize data and models to solve unstructured problems."

Though, it is impossible to give a precise definition including all the facets of the DSS. Nevertheless, the term decision support system remains a useful and inclusive term for many types of information systems that support decision making. Every time a computerized system is not an on-line transaction processing system (OLTP), someone will be tempted to call it a DSS. As it can be see that there is no universally accepted definition of DSS.

Additionally, the specifics of it is what makes it less generalized and more detailed. In addition, a DSS also is a specific Software application that helps to analyze data contained with a customer database. This approach to customers is used when deciding on target markets as well as customer habits.

History of DSS

The concept of decision support has evolved from two main areas of research: the theoretical studies of organizational decision making done at the Carnegie Institute of Technology during the late 1950s and early 1960s, and the technical work on interactive computer systems, mainly carried out at the Massachusetts Institute of Technology in the 1960s. It is considered that the concept of DSS became an area of research of its own in the middle of the 1970s, before gaining in intensity during the 1980s. In the middle and late 1980s, executive information systems (EIS), group decision support systems (GDSS), and organizational decision support systems (ODSS) evolved from the single user and model-oriented DSS. Beginning in about 1990, data warehousing and on-line analytical processing (OLAP) began broadening the realm of DSS. As the turn of the millennium approached, new Web-based analytical applications were introduced.

It is clear that DSS belong to an environment with multidisciplinary foundations, including (but not exclusively) database research, artificial intelligence, human-computer interaction, simulation methods, software engineering, and telecommunications.

Historical development

The role of business information systems has changed and expanded over the last four decades. In the incipient decade (1950s and '60s), "electronic data processing systems" could be afforded by only the largest organizations. They were used to record and store bookkeeping data such as journal entries, specialized journals, and ledger accounts. This was strictly an operations support role. By the 1960s "management information systems" were used to generate a limited range of predefined reports, including income statements (they were called P & L's back then), balance sheets and sales reports. They were trying to perform a decision making support role, but they were not up to the task.

By the 1970s "decision support systems" were introduced. They were interactive in the sense that they allowed the user to choose between numerous options and configurations. Not only was the user allowed to customize outputs, they also could configure the programs to their specific needs.

The main development in the 1980s was the introduction of decentralized computing. Instead of having one large mainframe computer for the entire enterprise, numerous PC's were spread around the organization. This meant that instead of submitting a job to the computer department for batch processing and waiting for the experts to perform the procedure, each user had their own computer that they could customize for their own purposes. Many poor souls fought with the vagaries of DOS protocols, BIOS functions, and DOS batch programming.

As people became comfortable with their new skills, they discovered all the things their system was capable of. Computers, instead of creating a paperless society, as was expected, produced mountains of paper, most of it valueless. This information overload was mitigated somewhat in the 1980s with the introduction of "executive information systems". They streamlined the process, giving the executive exactly what they wanted, and only what they wanted.

The 1980s also saw the first commercial application of artificial intelligence techniques in the form of "expert systems". These programs could give advice within a very limited subject area. The promise of decision making support, first attempted in management information systems back in the 1960s, had step-by-step, come to fruition.

The 1990s saw the introduction of "strategic information systems". This was largely because of developments in the subject of strategic management by scholars like M. Porter, T Peters, J. Reise, C. Markides, and J. Barney in the 1980s. Competitive advantage became a hot management topic and software developers were happy to provide the tools.

Applications

There are theoretical possibilities of building such systems in any knowledge domain.

One of the examples is Clinical decision support system for medical diagnosis. Other examples include a bank loan officer verifying the credit of a loan applicant or an engineering firm that has bids on several projects and wants to know if they can be competitive with their costs.

A specific example concerns the Canadian National Railway system, which tests its equipment on a regular basis using a Decision Support System. A problem faced by any railroad is worn-out or defective rails, which can result in hundreds of derailments per year. Under a DSS, CN managed to decrease the incidence of derailments at the same time other companies were experiencing an increase.

DSS has many applications that have already been spoken about. However, it can be used in any field where organization is necessary. Additionally, a DSS can be designed to help make decisions on the stock market, or deciding which area or segment to market a product toward. DSS has endless possibilities that can be used anywhere and anytime, for its decision making needs.

Zarfishan Batool
Dept. of Computer Science
University Of Karachi
Pakistan

Great Groups Getting A Group To Think Like A Genius

Writen by Kevin Eikenberry

Great Groups! - Getting a Group to Think Like a Genius

Wouldn't it be great to have an Edison or Einstein, or Mozart at your next meeting?  If you had a genius at your meeting, do you think you might come up with better results?  Let me be the first to tell you that those people won't be at your next meeting.  But there are some things you can do as a facilitator - some techniques and tactics that you can use with the group that will help them work better.  In this article you will learn some of the strategies of geniuses (adapted from Thinking Like a Genius, by Michael Michalko in the May 1998 issue of The Futurist), and how to apply them within any group you are working with.

Geniuses look at problems in many different ways
The key to this strategy is helping a group find new perspectives.  Often a group gets "locked in" on one specific solution or cause.  The goal should be to slow the group down and help them look at their situation from a variety of perspectives.  Once a group has an initial approach, encourage them to stop and force a new perspective - force them to re-conceptualize the problem.

How To Do It
Once a group has settled in on an approach, encourage them to step out of the room.  When they return, explain the concept of looking at the problem from another perspective.  Ask the group to list three or more other perspectives that this situation could be viewed from. From that list, pick one for the group to reconsider the situation from.  (If the group is large enough have sub groups work different perspectives.)  The time spent in reviewing the situation from the new perspectives should be as rigorous as the first analysis.  Once the group has completed their reanalysis, have them look at all of their results.  At this point encourage them to make the best decision, given all the data they have at their disposal.

Geniuses make novel combinations
Sometimes geniuses don't come up with new ideas, but combine existing ones to make great advances. 

How To Do It
Once a group has a variety of possible solutions (possibly by using some of the steps above), have them try to combine them, rather than just pick one.  Spur them on with questions like:
• How could you do both A and B?
• How could you gain the benefits of both A and D, while minimizing the risks?

Geniuses force relationships
This may be the genius' biggest strategy of all, and one you can employ easily with groups.

How To Do It
Always have a few (or a lot) of disparate items on a list.  At any time that a group is stuck, ask them to force a relationship between their problem to one of the items on your list.  (You could also have pictures of the items, which might spur their creativity even further.).  These relationships may be forced, and this may be where the breakthrough comes. 

Note:  Some groups or individuals will scoff at this idea as silly.  Acknowledge this, but encourage them to try anyway.  They may be very pleasantly surprised.  Remember too, that the quality comes with quantity rule applies here.  You may need to try more than one or two forced relationships before real progress is made.

Geniuses make their thought visible
This strategy is often put to use in group meetings, but only at the lowest level.  Recording a group's work on a flipchart, or whiteboard, is a small step in this direction, but to take this to the next level (to the genius level!), you need to get more visual. 

How To Do It
Have members of a group draw their solutions to a problem, or draw the results of implementing their solution.  If you want to look at a variety of solutions at once, have sub groups do this for different scenarios.  Focus the group(s) on making it visual and inclusive of their whole idea.  The goal is to communicate not wow the group with artistic abilities. Once the groups have completed their drawings, review all of them to see if new ideas, or combinations of ideas are found.

Geniuses think in opposites
Often it is very revealing to examine the opposite of your situation, or ask the opposite question.

How To Do It
Rather than having the group ask the direct question on their task, have them ask the opposite.  For example, if the question is, "How do we attract new Customers?", more new ideas and insights might come from asking, "How could we drive all of our Customers away?"  With the answers to the opposite question, tactics and plans for avoiding this outcome can be developed.

Geniuses think metaphorically
Aristotle believed that metaphors were a sign of genius.  If they were good enough for Aristotle, they should be good enough for us!

How To Do It
Have the group compare their situation to anything else (another place for your list mentioned above).  The more metaphors (or analogies) the group can draw between their situation and these random items the better.  The insights will flow from the discussion of these connections.  You can also ask the group to tell you what they might compare the situation to, which is another method of initiating the metaphors.

Geniuses prepare themselves for chance
In a group situation, this most likely fits after a solution has been implemented.  This "preparation for chance" will be enhanced by the willingness to do two things: admit mistakes, and spend time reviewing the results of the decision or solution.

How To Do It
After a decision is made, encourage the group to schedule time to review the results of the decision.  Time might also be scheduled to discuss the process the group used for coming to the decision.  By reflecting on the work and the results, often new ideas and improvements can be found.  The decision to take this time is seldom the natural inclination of a group.  Group dynamics are such that when the result or decision is made, that the group is ready to "cross that item off the list", and move on.  As a facilitator you can provide significant value by encouraging this review process.

©1999, All Rights Reserved, Kevin Eikenberry.  Kevin is the President of The Kevin Eikenberry Group, a learning consulting company that helps their Clients reach their potential through a variety of training, consulting and speaking services.  To learn more about services on facilitation go to http://www.kevineikenberry.com/consulting/consulting.asp or contact Kevin at toll free 888.LEARNER.