Volume 9 Number 7 - July 12, 2011

If you know a company — customer, supplier, friend, or your own — that could benefit
from improved operations, let us know.
Your best interest is our best interest.

The Finish Strong® monthly e-newsletter is for business leaders who recognize Operations as a strategic function that creates competitive advantage, profitability and brand loyalty to the marketplace.


Most companies I see have entirely too many employees. The ones they have tend to be busy and hard-working, but usually as much a result of complicated processes and lousy information flow as of the level of business.

Double-dip recession? Health-care requirements? Lead-times to customers stretching. Commodity prices highly variable. Rare earth minerals named that for a reason. Even in these scary times, the temptation to hire is strong for many of you.

Look at your options first, as a hiring decision is, for most organizations, a multi-year commitment of dollars.

Where your process loads are linear with demand, you may need to buy equipment or hire people. But most companies can increase the capacity of current resources simply by reducing non-value-added work. Increasing sales become very profitable when the only marginal costs are materials.

Get started by observing your bottleneck area for what will feel like eternity to you: an hour or two. Watch the work, and the interruptions to work.

Then walk an order through your system backwards, from invoicing to shipping, to manufacture/purchase to order receipt. Start by asking "how do you know?" in each area. Ask a few "what happens if..?" and "how often does that happen?" and "what tends to slow you down?" questions.

As you walk and listen, using something close to a facility layout, draw lines representing the paths you take, creating the familiar spaghetti diagram (called that because you will note a strong resemblance to a plate of spaghetti if your processes are as convoluted as most). Note the places where you observed delays -- they will likely be everywhere along the path.

Then begin to eliminate the delays. Interruptions to flow of information, product, and money greatly reduce your capacity, lengthen your leadtimes and cost you money. You can likely free 1,000 - 3,000 hours of (annualized) work in your first pass. Don't fire the people those hours represent; consider them free capacity to support your growing sales.

And then do it again.

6 Nuggets, or 1/2 Dozen?

Many people quickly become frustrated by my insistence that they create value stream maps by hand when there are so many software alternatives to make them look "more professional." Similarly, my encouragement that real-time metrics on the shop floor be maintained by hand by the folks who work in each area is met with the anguished explanations of how much better computer reports would be.

Computers definitely have a place in every company. Nonetheless, understanding a few basics before automating a process, or making it look pretty, holds powerful learning that should not be skipped.

The only thing that "Hamburger Giant" sells that I buy is unsweetened iced tea. A friend of mine, however, recently shared with me his frustration with their service person who told him he couldn't have 1/2 dozen Nuggets, as six was the smallest adult size quantity she could sell him. She even offered to show him the button on the computer to prove her point.



The Starting Pistol
Arnold Schwarzenegger:
“It is not the experience; it is leadership that counts.”

The Tape
Rebecca Morgan:
"Real leaders know that people are watching as much as listening; don't just act like a leader or talk like a leader; be a leader."


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