NI MMTC Cobrand
 

Keys to Operational Excellence

Key #1 Understand how your organization adds real value
    Hall is national bestselling author of Jump Start Your Marketing Brain and key note speaker at MEP Convention
Key #1 Understand how your organization adds real value to people’s lives and be able to clearly communicate the truth about it to your employees, suppliers and customers. Best selling author Doug Hall provided key note speech filled with practical ideas. Not your typical business consultant in manner, appearance or dress, Hall was more akin to Jimmy Buffet than Warren Buffet; but Hall energized the event. I enjoyed Hall’s scientifically backed advice and practical ideas. His recent book, “Jump Start Your Marketing Brain” is a national bestseller. The one essential key I learned from Hall is: “Understand how your organization adds real value to people’s lives and be able to clearly communicate the truth about it to your employees, suppliers and customers”. Focus on:

1. The benefit you provide
2. How you differ from others in a way that makes you note worthy,
3. And the ease with which people can understand your value proposition.

This is the crux of completing strategic elements: mission, vision, values, and strategic plans, goals and milestones. If the activity doesn’t add value, it is waste. Take a quick poll in your enterprise- ask your employees “how do we add real value to people’s lives?” Document the results. If answers vary, you have work to do.

Real life UP example: Brian Baccus entrepreneur/owner of Peninsula Powder Coat (PPC) in Baraga, MI, provides a great example of how PPC adds true value. In plain English Baccus clearly states Peninsula Powder Coat’s value. During a recent project team meeting he relates “ you know there are many paint shops out there that coat small parts- many can coat small parts better than us. But no body can powder paint large massive parts better than Peninsula Powder Coat. This is our niche.” With this short statement Brian focused an experience team of consultants, including myself, finishing, conveyors and material handling, ovens, and abrasive blast, to align forces on his expansion project. Baccus quickly and succinctly got through; clearly communicating this is what is important. Align and focus on this. This is leadership in action. Align your resources to add true value and support your strategic themes.

Recommended reading
Jump Start Your Marketing Brain
by Doug Hall.
Available in bookstores, local library, or borrow a copy from NI.

Recommended Tool-
Edge Executive Discovery Guide
This enterprise discovery guide was developed by a team of experienced business consultants and manufacturing specialists from many MEP Centers across the country. Content is based upon their collective expertise in helping small U.S. manufacturers adopt Best Business Practices to achieve profitable growth and global competitiveness. The Enterprise Discovery Guide or 360vu EDGe is designed to address all aspects of the enterprise - its leadership, financial and operations management, business processes and operating practices, technology, organization culture, business information and people systems. The discovery guide serves as a gateway to co-discovery, relationship building, and collaborative enterprise development.

Professional Development
No cost low cost professional development: Schedule a live facilitated meeting or web teleconference using the Edge Discovery Guide to spur dialogue in your management team.

For new entrepreneurs and new products, follow the Sage advice from Doug Hall. “Make a little, sell a little, and learn a lot.”

Key #2- Scan and understand the external environment
    Hinchliffe specializes in the implementation of culturally effective business, organizational and human capital strategies and presented at MEP National Conference.
As business leader, regularly scan and understand the external environment in which your enterprise operates. Analysis tools similar to the Hussey Octagon, (acronyms include: PESTLE, PESTEL, PESTLIED, STEEPLE & SLEPT) provide a framework to help stimulate dialogue in leadership teams to identify external forces affecting a business. How will external forces such as Political, Economic, Social/ethical, Technological, Legal, Infrastructure, Environmental, Demographics, and geography affect your enterprise? Quality teams use a similar problem solving tool, the 5 M’s and fish bone diagram to spur dialogue in process improvements. The tool provides an easy way to identify common sources of process variation: Man, Machine, Materials, Methods, and Metrics, to identify root causes of problems.

Real life:Paul Essinger, Entrepreneur and owner of Hiawatha Log Homes and Bob Heise, Marketing Manger, regularly scan the external environment before investing resources. Essinger and Heise provide key leadership by understanding and communicating to the rest of the organization how externalities affect their business.
Hiawatha is buffeted by external forces such as:

  • Economy: what will happen to interest rates on home sales
  • Demographic changes: North America has a growing number of affluent baby boomers with disposable income, and they have desire for a dream home building experience
  • Technological advances- new materials and technology laminate vs. real wood, new business processes in design and web technologies
  • Infrastructure: how can I ship my product and receive materials roads, rails etc, Do I have enough electricity and water available at the Munising Location for expansion
  • Environment: are large diameter trees available, how will energy cost affect business?

All these external factors, opportunities and threats, affect the enterprise.

On other recent business visits to wood products manufacturers, I found well run companies, with good people, negatively affected, perhaps blindsided by outside forces. Many in the wood business feel effects of changing technology and it may be too late to catch up. No longer do these manufacturers just compete against other wood products manufacturers, an already highly competitive market, but leaders must also consider all the new competing laminate and oriented strand materials that are replacing glued-up panels and hard wood flooring.

Recommended reading:
PEST Analysis- Understanding "Big Picture" Forces of Change Also known as PESTLE, PESTEL, PESTLIED, STEEPLE & SLEPT and Hussey Octagon
Link Understanding "Big Picture" Forces of Change

Recommended Tools-
PEST Analysis combined with Fish bone diagram

Professional Development
Attend a Web teleconference
Employ coach to facilitate on site leadership team discussion on externalities

Key #3 Choose the right Performance Measures
   
Key #3 Choose the right Performance Measures to drive high impact continuous improvement, encourage desired behaviors in your organization, and align business activities to strategy.
The MEP Convention spent much energy on Metrics; and rightly so. You get what you measure.
Bernie Smith, Plant Manager and Dick Thomason owner, Bessemer Plywood, can tell you the importance of using the right measures. During a team improvement project, Smith’s Kaizen team identified a key process with obscure, hard to visualize metrics, normally calculated in the office. Current measures held little value or understanding to employees running the process. The team came up with simple easy to understand metrics. It was such a simple change. Productivity went way up. Shifts starting competing using the new metrics driving desired behavior of higher productivity.
I have also seen how misused metrics drive unwanted behavior
  • Piece work – make as much as you can, needed it or not
  • Machine utilization - drives large batches and few set ups making companies less nimble
  • Build inventory – to absorb costs – but caused many other wastes in terms of counting, storing, moving, obsolescence, longer cycle times, and poor cash flow. Inventory hides problems and quality issues

Recommended Reading

  • Measuring the Financial Impact of Lean, PowerPoint by Hutton and Hallet, Instyle Consulting
  • Using Performance measures to Drive High Impact Continuous Improvement, PowerPoint by BMA Inc.
  • Balanced Scorecard Hall Of Fame Report by Robert S. Kaplan, David P. Norton

    Recommended Tools
    Balanced Score Card

    Transformation Planner: The Transformation Planner identifies 12 key metrics, which represent prime performance indicators for your organization. The model automatically sets improvement targets for you to consider but can be easily adjusted to set agreed-upon improvement targets to meet your company goals. Once you have established targets for 9 key measurables, the Transformation Planner calculates the potential one- time and recurring annual financial benefits of reaching those targets. http://www.mmtc.org/services/transplan/index.asp for description

    Professional Development
    Start the assessment process. The process begins by completing a Competitiveness Review Questionnaire. Once analyzed by MMTC, the information from the Questionnaire generates an initial Transformation Planner with estimated results. This initial Transformation Planner is then used during an Operational Assessment to determine the validity of the input data and to identify improvement opportunities that are explained in a comprehensive Operational Assessment Report.

    Use Balanaced Score Card- Abstract:from HBR Using the Balanced Scorecard as a Strategic Management System
    "As companies transform themselves to compete in the world of information, their ability to exploit intangible assets is becoming more decisive than their ability to manage physical assets. Several years ago, Robert S. Kaplan and David P. Norton introduced the balanced scorecard, which enabled companies to track financial results while monitoring progress in building the capabilities they would need for growth. Recently, some companies have gone further and discovered the scorecard's value as the cornerstone of a new strategic management system. Traditional management systems rely on financial measures, which bear little relation to progress in achieving long- term strategic objectives. The scorecard introduces four new processes that help companies connect long-term objectives with short-term actions.

Key # 4 GO Lean
  On the tactical side
MEP dedicates huge resources to LEAN because LEAN consistently provides the most impact of any assistance offered. Kiyoshi Suzaki wrote the bible on continuous improvement. “The new Manufacturing Challenge, Techniques for Continuous Improvement”, although published in 1987 is still the definitive hand book that has helped more lean practitioners than any other work on lean manufacturing.

The basic keys to continuous improvement for all manufacturers

  • Maintain workplace organization and housekeeping (not just material, include information systems).
  • Eliminate waste- simplify, combine and eliminate
  • Improve and standardize your processes

These very simple principles should be part of your organization’s culture for they provide the foundation for continuous improvement. Strong correlation exists between clean, organized, and standardized operations and high quality, excellent safety records, high employee moral and enterprise profitability. Conversely – in dirty, unorganized plants you will find poor quality, unhappy employees, poor safety records and low profits.

More keys to focus on, especially for process industries such as paper mills, plastics molders, veneer mills, ceiling tile makers:

  • Control process and product variation
  • Be fast and flexible- focus on fast change over and reduce set up times
  • Maintain the process equipment- Total asset management

After establishing the basics in your culture, process owners will need to improve skills for increased flexibility. Plant layouts will change to improve flow. Visual controls will strengthen nerves and muscles of the organization. Suppliers will become strategic partners. Soon you will be able to exploit new found capacity, speed and quality, and use it as a competitive advantage.

Recommended reading:
The new Manufacturing Challenge, By Suzaki

Recommended Tools-

  • Watch New Manufacturing Challenge video tape series with team. Video series available in our library to borrow tapes.
  • Transformation Planner
  • Kaizen Continuous Improvement Events

Professional Development

  • Schedule 6 hour workshop the keys to continuous improvement with Manufacturing simulation
  • Set up a Kaizen Continuous Improvement project

 

Contact Information  

phone: 906-226-1673