Managing Incapable Processes

What do you wonder about when you hear about deep job cuts?

What I wonder about is this.

Hundreds or thousands of jobs lost, when there's no major change to the business offering. No closing of divisions, no withdrawal of Products or Services. No halting of R&D, no outsourcing of functions. Just lots of jobs gone.

Sounds like the Seniors haven't kept their eye on the recruitment ball. Sounds like the jobs and those people weren't being sufficiently "productive"... and whose fault is that? Oh, and for those that remain it sounds like more work and pressure!

So in the long-term game of business success, when you have recruited staff, trained them, supported and led them, the right thing to do is.... Get rid of them? Can't be right can it?

Now, I'm not reflecting on emergency job cuts to avoid bankruptcy (which would be accompanied by Board level pay cuts and losses?), nor major revisions to a business as described above.

Making someone redundant (that means their job is gone, not that they aren't doing it properly), is one of the hardest things any manager has to do. It's horrible.

The answer then? Not central corporate controls on recruitment, but Local Management that makes the most of every job, and morally doesn't recruit for a job that isn't really there.

That is one of the greatest attributes required of Local Management: morally strong people that make the best of the people and jobs they are responsible for where they work, for the benefit of the business and their people.

People make Supply Chains

A slight diversion away from Investment Stream Mapping (ISM)...

Supply Chain Management: a chain of companies, suppliers, firms that provide supplies to you and that requires Management.

Now that term management includes, but doesn’t mean:

•             The transmission of electronic data on demand, stock and replenishment orders
•             The despatch, transport and receipt of those of orders
•             The production of orders, goods receipt notes, invoices and payments
•             Negotiating and signing supply contracts, quality agreements

What is missing in all of those is the absence of management, which is a people based activity, and is frequently overlooked when we get all hooked up in those transactional statements.

When the Japanese natural disaster hit global supply chains, one of my clients found that the integrity of part of their supply chain was dependent on the strength of the relationship his Purchasing Manager had with a key supplier. In times of short supply, relationships make the difference. Contracts can be interpreted, reasons for non-supply can be created, delays justified. You and your key supplies depend on the people that you are in business with. 

Another client had a multi-million dollar supply contract with just one customer (60%+ of their turnover). They rarely visited that customer at a senior level. The relationship deteriorated, and decisions on future collaborations slipped away. All of those transactional things were happening of course, but the Supply Chain wasn’t being managed.

Don’t fall into the same trap. List out your most important Supply Chains (up and down stream), and ask yourself if you are managing the relationships as well as shipping the paper, emails and goods. Look for the people behind the chain and make sure you are in the game.

Rudyard Kipling and the power of Else

Rudyard Kipling wrote the following advice for researchers:

I keep six honest serving-men
(They taught me all I knew);
Their names are What and Why and When
And How and Where and Who.

Their relevance to mapping our Investment Streams is to make sure that we ask enough questions about all of our customers, what they expect from us and invest in our efforts. Some examples for the car sector:

What do my customers buy? (a car, a lifestyle, travel independence)

Why do they buy? (best credit deal, free servicing, low running costs)

When do they buy? (new registration time, start of a career, for the summer)

How do they buy? (internet searching, Magazine led, Dealer trawling)

Where do they buy? (main dealer, import agency, ex-company cars)

Who buys? (young, old, family builders, boy racers)

And now the power of Else.

Open your mind to all of the possibilities by now going back and asking:

What else?

Why else?

When else? Etc

Use your imagination, look at your competitors, look outside of your industry for Investment needs and streams that offer you a competitive edge.

What else? (service free travelling?)

Why else? (wheel chair storage?)

When? (when a pensioner can access their lump sum?)

Find and deliver a stream that others haven’t thought of to revolutionise your business!

Pause

Drawing in the Customers and their investment needs, then Suppliers is like the first steps of a Sipoc Map. (Suppliers, Inputs, Processes, Outputs and Customers)

But now we pause to consider our purpose before we map.
Why purpose? Well without it we will collect lots of data and become swamped by it, sucked into the enticing comfort zone of data collection. Alternatively if we understand the process and meet the people that are involved then we can always go back if our purpose changes.

Remind ourselves which investment needs are the most important? Which are your competitors better than you at achieving? What will make your customers buy more at lower cost to you, more repeat business and tell their friends and colleagues to buy? Where can you gain a sustainable competitive advantage?

When you have that purpose, that lens through which to look, it's time to go and look at the processes. Go to where it happens: the coalface, the Gemba. Meet the people, understand what they do, what works well and what doesn't. Remember to look with your customers' investments, that lens as you see.

What would those customers think of this if they saw it?
What if a TV company came to visit, a regulator?

Above all understand it. Collect the data that is relevant , especially who is involved, as well as process times, cycle times, queuing times and whatever else seems relevant to your purpose. Capture it on paper because it is more flexible than a screen. Time to digitze it later if you want to do so.
Make sure if you are a member of a team that at least one of you knows the whole stream from supplier to key investment need. If you piecemeal it you'll miss something! Look and listen for those opportunities to improve.

Listen to this blog at http://audioboo.fm/boos/893637

Drawing the Map from Right to Left

Starting the Value Investment Stream Map

So, lets start with the customers. Take a large piece of paper. A3 is the minimum you should start with, you will always need it bigger than this but that comes with more understanding.

And let’s remember now that understanding is the key here. The Map will help you understand where and how to get better.

On the right hand side place the real end user about a third of the way down the paper. Name them and draw a left hand looking eye, to remind us that we should always be looking at this map from their viewpoint, through the lens of the investments that they make. Just in front of that eye list out the investments that you identified for them in a vertical line, highest importance at the top, lowest at the bottom. If some were negligible then cull that and just add a footnote somewhere near the bottom of the paper in tiny writing.

When you have done that draw another eye to the left of the Investments you have listed, and below them, for the customer further “up” the stream and name them. So for instance that could be the retailer after you have already done the end user for a consumer item. Now list their investments, high to low as before.

Keep moving down and left with your “closer customers” and their investment needs.

If you have another set of customer type add them in back on the right hand side.

In the picture you’ll see I’ve added commercial cleaning companies on the bottom of the map looking at washing powder and the description above has been marked as steps 1 though 4 in red.

Last step in today’s blog is the golden thread. Highlight the Investments that are most important in yellow or gold. We will endeavor to make a “golden thread” of those activities and processes/movements that lead to those highlighted in particular.

Next we'll list out your enterprise's suppliers... on the left hand side, in the next blog.

Investment Stream Mapping: Multiple Customers

In the last piece I introduced the Value Investment Mapping Process.  It explained the concept that the Investment that a customer makes in you when they purchase is only partially represented by the money that they pay to buy the features of your product.

Let’s spend a little time talking about customers. Those with a marketing background will already know that the market is made up of a number of different customer types, or segments.  This varies greatly by product and industries but customer types that you may need to consider are:

o   Domestic

o   Retail

o   Installers

o   Original Equipment Manufacturers (OEM)

o   Non OEM service companies

o   Early adopters

o   Corporate buyers

o   Children

o   Their Parents

o   Etc.

For each customer you should understand their importance to your business and what is the investment they make in your offering.

Think through who your customers are as well from the point the product leaves you and reaches your end user:

o   Wholesaler

o   Distributor

o   Retail premises

o   Installers/Contractors

o   Buyer

o   User

If you have a complex route to market, each step investing in you will require you to recognise that investment. The wholesaler will want your product to be easy to move around in bulk and break down into smaller units, while the end user will have no interest in that. However you need to bring the wholesaler with you if you want to reach the user.

So, before you start mapping, understand who all of your customers are, what they will invest in you, and what is important.

Next we will think about starting the map, back to front.

Investment Stream Mapping

Value Investment Steam Mapping

If you'd prefer to listen to this then click here for the Audio boo.

Value Steam Mapping (VSM) easily slips into the “map is the deliverable”, instead of being a record of where we are and an aid to where we are off to. In this and the following pieces, lets re-visit the approach.

First of all lets consider the term Value and throw it out. When you start to map the stream that delivers to a customer, you must properly understand what your end product/service means to that customer. To use that term one last time before we replace it, what do they value?

Your customer, in giving you money for your efforts (let’s stick to that rather than considering non-monetary transactions for now), have also invested:

• Time and effort, travel, in finding and buying your product.
• Association with your brand/image/product: an emotional investment. Their friends will know they have bought you.
• Bought into your method of delivering the product to their use.
• Bought into your way of paying for it.
• Accepted your warranty/service support/upgrade policy.
• Purchased directly or indirectly your packaging methods.

These investments of thought, trust, time and emotion are in addition to the money they pay out for the explicit functions of your product.

So what does this mean? It means that the first step in Value Investment Steam Mapping (ISM) is to properly understand from your customer’s point of view what they are about to invest in you. When you understand what they invest in you, and which investments are the most important to them, you can begin the mapping.

What is the advantage of such an approach? It means that as you consider waste reduction/efficiency improvements you always do it through the lens of that understanding, rather than just cost.

For example, decisions on where and who does a manufacturing step (low cost child labour?) can impact on their moral investment in your brand (“I won’t buy that because of how it’s made”). Mis-read that and however much value you deliver, if you miss the importance of that investment you are mis-designing your business.

In the next item we consider the complexity of multiple customers.

Staffing levels and repeat custom

The food was good and hot, and plenty available. The staff were working hard, but...

I was sitting in a hotel breakfast room on a Sunday morning: The staff clearly lacked someone pulling the strings and making decisions on tables, clearing and allocating, and who was in charge of greeting and directing guests.

My guess is the same person who prepared the work rota, and who wasn't there to lead when it mattered had decided to run the morning with. "tight ship", keeping "a handle in costs", and managing the wage bill down.

What they missed by not being there and their decision was the looks and words of frustration from the guests who wanted a nice breakfast. They wanted coffee and tea when they were thirsty, fresh bread (not frozen) by the toaster. Repeat business and word of mouth recommendation are like gold dust in most businesses, especially
Hotel and Catering.

How many repeat visits or referred customers would have paid for that extra bit of staffing? What would have been the impact on the bottom line in the long term?

National Manufacturing Debate 2012

Yesterday saw the 3rd annual National Manufacturing Debate, held by the School of Applied Sciences at Cranfield University. The topic was "Enhancing the supply chain for growth". The event comprised 8 excellent speakers ranging from Ian Gray of the Technology Strategy Board  (TSB) and Martyn Pellew, President of the BCC to John Bolton of Tata Steel and Dr. Victor Higgs, MD of Applied Nanodetectors.

The debate in the afternoon was supported by a panel of these people and others, and covered the topic well. The presence of Victor and John Bolton as businesses was supported by Tim Routsis of the Cosworth Group as the type of target companies that the event was designed around. Next year, I hope that we can encourage more manufacturing and supply chain companies to attend.

The event saw the launch of the TSB's High Value Manufacturing Strategy 2012-2015 document,  in which Pharmaceuticals is identified as a high growth, high R&D intensity sector... just the ideal sweetspot!

Audioboo about ICH Q11

Audioboo on ICH Q11

Listen to my one minute introduction to the new ICH Guideline, number 11. Click on ICH Quality Guidelines page to access the document itself.

listen to ‘ICH Q11 the latest guideline’ on Audioboo

The 168 Hour Week

Next tool : the 168 working week.

Using your data to have a conversation

Our latest Vlog discusses detail of data and how we can use it to inform and ask questions of our processes.

UK Pharmaceutical Manufacturing

At the Houses of Parliament last month, I met with two people from the Associate Parliamentary Manufacturing Group to discuss raising the profile of Pharmaceutical  Manufacturing in the UK Manufacturing Sector. If you are part of that Sector, read the following statements with pride.

In the UK, the Pharma Industry:

o   Employs 72,000 people directly, plus 250,000 in related industries

o   Generates £14.6B in  exports

o   Contributes £8.4B into the national GDP (out of a total Manufacturing of £140B)

o   Creates a Trade surplus of £4.3B

o   Over 12% of National Total Manufacturing Gross Value added is due to "Pharma, Chemicals and Bioscience" Sector, second only to "Food, Beverages and Tobacco."

o   That Sector has the 2^nd largest sector growth in Manufacturing in the last 15 years , 2^nd only to  the "Aircraft, rail, marine,and motorcycles" Sector.

Site Leadership

This short video details the responsibility of Site On Duty Managers and introduces the Site Leadership group on LinkedIn.

Adapt

Adapt is the name of a book by Tim Harford, (Adapt Book page on Tim Harfords website) who works at the Financial Times and presents the excellent Radio 4 program More or Less (Statistics and numbers in the Public Eye, wrestled to the ground).

Adapt is a well researched and readable book that explores the concept of the need for failure in order to thrive on a Market, Corporate and Personal level. He brings together some solid thinking on what we need to do to bring that concept into successful practice.

Many books in the "business" or "personal achievement" shelves will use a simple but eye-catching phrase as the basis of their Life Elixir, and then dredge up plenty of repetitive anecdotal evidence to support it. Not Adapt. In this book, Tim stays "loyal to his readers", by using rigorous studies and trials reported in the public domain to support the work.

This excellent book is worth a read (no, I haven't received any financial reward, this is just one of my occasional book recommendations... for the others click around on Amazon, or look at Book review labels in this Blog).

Site Leadership

Are you a Site Leader?

A Site Leader is responsible for the well-being of the site at which they work. It is essential that you work there. No absentee landlords please. You will be morally responsible for the Health, Environmental impact and Safety of the people on the Site and the community surrounding you. This area may have a functional head, reporting elsewhere in a large organization, but you know it’s yours to own.

There’s an issue. 

You are part of a large organization aren’t you? You aren’t the sole arbiter of the Site’s position in that large organization. You maybe the Site Director, Operations Manager, Chief Operating Officer. Whatever the title, you are the “SoD”, the Senior on Duty, whenever you’re there. When you aren’t, someone of your choosing is.

Your site could be a Manufacturing Site, a major office, Call centre…It doesn’t matter. You are in charge. You have a team, yes, that is vital; but you carry the load.

The problems you face will be many, and occasionally serious. The performance of the site will be measured on a Global stage, but impacted by local rules, expectations and history.

I'm thinking of starting a Linkedin Group for Site Leaders to share ideas. Anyone interested?

Training, an abdication from coaching?

“… so in conclusion then, I’ll arrange for you to go on a training course in that.”

Possible concluding words at the end of a formal appraisal or even the ever popular “one to ones”, but ask yourself before you utter them: Do they need formal training or should I be giving them more coaching?

Individual coaching by a Supervisor, Team Leader or Manager for someone in their group is time consuming, occasionally difficult, but frequently what is actually required.

Training is excellent at introducing or adding to specific skills or knowledge, but to enhance the use of a skill, embedding it into a skill set or working routine is much harder. This is where coaching takes over. My own rule of thumb is that coaching a person in a stretching area requires 3 or 4 times the number of training interactions. Now I’m not talking about coaching in basics here, but if you have deemed training important to add to one of your Team members’ skills or capabilities, then failing to coach in it adequately just throws money away.

Now don’t be alarmed. It doesn’t mean you have to coach everyone in everything. Discuss and make clear where the coaching should be focused. Discuss it in those “one to ones”. Put a timescale on the coaching period, so that it is clear to both parties when you both think the coaching should be over.

“ I think that I should coach you in this for the next two months. At the end of that period you should be fine”. Reviewing progress as part of the coaching will help confirm or disprove that timeline.

So remember to ask yourself the coaching question before you search for the training courses.

Organisational Linkages

What do the following all have in common?

o Multi-level, treacle like, hierarchical organisations

o The common “ procedures will be updated, re-training carried out” statement when there is a mis-selling or service level scandal

o Buying and selling Structured Debt vehicles that you don’t understand

o And possibly, the extensive earnings multiple between the highest and lowest employees

They are examples of linkages throughout a company getting stretched to, or beyond, breaking point. Not dissimilar to the “chain of command”, it also encompasses the values and principles that should govern an organisation at all levels.

When some common sense value needs re-stating in a training session, such as “ don’t sell inappropriate insurance” or “ don’t forge signatures” (a misdemeanour more serious in my field of Pharmaceuticals and Medical Devices than even the Financial or Utility switching sectors), the linkage between the principles of the business and its employees is broken.

So what should be done about it? Pre-emptive actions could include:

o Meaningful self-audit programmes

o A Whistle blowing policy that encourages the declaration of broken links

o Audit by external people, with no vested interest in hiding the breaks.

More important are senior people, leaders, making clear by their words and their deeds what is important in an organisation, re-enforcing the links, re-enforcing the right behaviours, rather than fixing them after the breaks are discovered.

An old boss of mine, senior and removed from day-to-day Production, used to walk a part of the Factory floor where he was responsible every morning for 15 minutes before starting his day’s work. Over a number of weeks he covered his whole patch. Walking round he commented on tidiness, organisation, and attitudes. Everything that he saw that did, or didn’t meet his view of the world, received a comment to those present and the supervisor or team leader. He may have been right or wrong, but everyone knew what was expected of them.

He took the time, and demonstrated by his actions. Linkage wasn’t a problem there.