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  • What We WON’T Learn from Professional Sport


    Last year I was reading (thanks to my wife and kids) Ricky Pontings’ autobiography.

    I was looking for the parallels between sport and business as I was reading the book.

    Having played cricket at a reasonable high level and following the game closely I can remember most of the incidents and games he is referring to.

    The book was a good enjoyable read but it struck me as being superficial and I couldn’t put my finger on it for quite a while.

    What I concluded was that so many of the issues my clients face and that most of us face in running our businesses are quite different to those faced in professional sports.

    Here are some of those differences

    1. At the elite level all of the players and participants are committed to being there.
    In most of our businesses it is rare to be able to say that everyone is fully committed. We have to deal with some people who just don’t want to be there, or only want to cruise along. The challenges are quite different.

    2. Performance accountability is clear and accepted by all participants.
    If you don’t make runs or take wickets you will be dropped, it is that simple. Everyone accepts that. In our businesses there are usually people who strive to avoid being held accountable for the results of the business, or their part in it. Getting ‘dropped’ involves a series of discussions, argy-bargy, and sometimes with a legal wrangle at the end. Managing the impact on the remaining employees is a tricky process also.

    3. All participants are lined to the common goal.
    Everyone wants to win the current game or series that is being contested. In business you are  dealing with people who are positioning for other agendas.

    4. There is a clear triumph and celebration
    At the end of a series there is a winner and loser, and for the victor there is a celebration and then a rest. In business we often do not have the clear win and the release of all of the tension. It is so often a continuous series of activities that have no end point. Building motivation when what you do will go on forever requires a different approach.

    5. There is no second chance for losers
    If you lose badly enough you are out of business and then there is no return series or next game. In sport there is always next season. England played disgracefully badly in the recent Ashes and there will be a major series of changes for them before they next play at home in their local summer.

    If your business is not going well, could you make wholesale changes to personnel and philosophies?

    The answer is you can, however it is a little bit trickier and requires a different approach than for an elite sporting team.

    Comments are welcome.

    Have an Awesome Day!

    Jason


    1 comment.

    When Suppliers Are Vampires


    Earlier last year there was an article in an Australian newspaper about cost overruns in the Air Warfare Destroyer project. The project was suffering overruns which at that time stood at $2m a week.

    Many of the subcontractors involved were on ‘cost plus’ arrangements which mean the cost problems are borne by the taxpayer, not the supplier. The vampires bleeding their victim (us) dry. This is not a malevolent behaviour, merely a sign of mediocrity in management and their systems.

    These are deliberately provocative terms and I mean it.

    When Holden decided to cease Manufacturing recently it identified a myriad of insurmountable issues. What it failed to do was (at least publicly) admit that management had made mistakes and wasn’t good enough to solve the challenges it faced.

    Australian industry would love the government to build a fourth destroyer. The replacements for the Collins class submarine could be built in Australia as could the next major army combat vehicle program.

    Australian industry is suffering (in some areas) and defence work being sourced locally would be a tremendous boost.

    We should be sourcing from the Australian suppliers and groups because they are the best options and represent great value, not because we have to tolerate vampire like behaviour in some belief about maintaining skills and strategic capability.

    Remember, it is only a strategic capability if you are any good at it!

    5 steps to stamp out the mediocre vampire in your business and move towards being the best choice for your customers.

    1. Show Curiosity. Explore why your organisation does things the way they do and keep asking why?
    2. Learn More! Search for the subject matter experts in relevant areas and learn from them
    3. Be Ruthless (not rude) in stamping out mediocrity in your systems, yourself, and your team
    4. Boost Velocity! Identify ideas faster, Evaluate faster, Experiment faster, Discard or Implement faster!
    5. Align your business to help your customer thrive. We want the customer to buy again, and again, and again because we are the best!

    Comments are welcome.

    Have and Awesome Day

    Jason


    0 comments.

    7 Levels of Project Evolution


    Every manager, business owner, or executive has had to deal with projects that fail to deliver. For many of us, our lives are full of actions and activities that are the consequences of poorly conceived, poorly executed, and poorly tested projects. New product launches are the most visible example of this problem.The time spent leading up to the launch of a new product is often frantic or frenetic! Late changes come from a variety of sources. Suppliers struggling to ship the first production orders cause emergency overtime. There could be some feedback from field trials of the product that means a ‘must do’ modification is required through an Engineering Change Notice, Product Variation, etc. Training of people in the new parts is continuing. New equipment may still be having ‘teething troubles’.This is the realm of the ‘all-nighter’, the premium airfreight budget is blown, crisis management is the normal operating mode, and all annual leave has been cancelled for months.Then the launch occurs. Happy days, living the dream no doubt!Unfortunately that is rare, the premium airfreight, the band-aid solutions and crisis management can continue for some time. Gradually the business  settles down into the ‘new normal’.

    And for many businesses that’s where it stops until the next new product is launched, the next model update occurs, the new flavour is developed, the next season’s colours are released, or worse, you have a warranty, recall, or complaint issue.

    These businesses are missing out on some of the easiest money available.

    In the lead up to a launch we are often evolving the process and design on  the run. Methodologies that looked great on paper do not always work in the ‘real’ world. The focus on costs and then disciplined planning and project management goes out the window in the pursuit of the ‘date that must never be missed’. Extra quality checks are added in, we ‘nursemaid’ suppliers,  and we throw more people at the problem, constraint or bottleneck.

    Even if you have a product launch with none of these problems, there is still  money to be had by refining your existing products, designs, and supply chain interactions throughout the life of the product.

    Your clients can enjoy  the benefits of these improvements in products and service.

    The sad situation is that once we are in production, many of the bandaids we put in place   to meet the project timing become permanent. The supplier’s poor performance is compensated for. Necessary tooling changes are not developed.

    Everyone has moved onto the next project and in the aftermath of the launch, we have forgotten all of the compromises we made along the way. This kills margin and performance.

    A fighting chance
    An example of evolution in practice was the Spitfire fighter aircraft. This aircraft had its first flight in 1936. It was continually improved and evolved (primarily to improve performance) until the last one was produced in 1948. During that period there were 24 major evolutions of the designs and numerous small continual changes made. Apparently not one part from the Mk1 version remained on the Mk24 version. Every part had been modified and improved.

    The goals of project evolution are simple:
    • Reduce the cost of supply of the product year on year.
    • Improve the flow of product throughout the supply chain year on year.
    • Deploy these improvements in a stable and controlled fashion throughout the product lifecycle.

    The three key attributes of every project are Cost, Time, and Scope. A project can only be deemed successful if it meets or beats the targets in ALL three of the key attributes.

    The scenario for most projects is that, sadly, they miss out on at least one of the three attributes – on many occasions, all three fail to deliver.

    Sales departments must be able to reliably inform future clients ahead of time on the capability of new products, their availability date, and their performance. A salesperson who fails to deliver on their commitments loses credibility, trust, and the sale. Excuses don’t cut it!

    Operations have to deliver continuous improvements in cost and quality in addition to introducing the new products from engineering. In an environment where new products are not fully process capable before release, it becomes harder and harder to deliver on existing volume requirements. Achieving budget in the face of poor process is just about impossible and continuous improvement projects are parked until the ‘rush is over’

    Engineering is being asked to deliver more complex products while reducing development lead times, and with less design resources than before.

    All departments are negatively impacted by poor project management. Financial performance is hurt, and the capacity of the organisation to build a competitive advantage in any area is curtailed.

    Understanding where your current approach sits is a good start point for helping you develop through our Project Evolution approach. There are seven distinct levels to Project Evolution and you can assess where your current performance is by reading the table below.

    Project-Evolution

    The seven levels of project evolution

    “The transformation to greatness described by Jim Collins requires steady dedication to the development of effective business systems.” Ron Carroll.

    Level One – Arrogant
    ‘We’ll tell you the price when we are finished ’.

    The White Belt level of the project is where a company’s focus is all about themselves. The expectation here is that the customer (internal or external) has to adapt their plans to fit with the group that is running the project. At this level, not only is the timing undetermined, but also the budget and the level of functionality that will eventually be provided. For a customer
    of this supplier it is incredibly frustrating. Not only do you have no control over what is happening, you usually find that any communication from the supplier is unreliable. The supplier usually displays little concern for the downstream impact of their  management style and avoids accountability for their actions. Suppliers, who have this level of capability struggle to make money, struggle to gain repeat business, and rarely have a harmonious and productive workplace. The exception to this is the supplier who truly has a unique set of IP, they can still gain repeat business, until their customers find another solution.

    Level Two – Reactionary
    ‘We act on ideas to reduce cost when we have to.’

    At this level, projects to improve the business (reduce costs, improve performance) are conducted haphazardly and  inconsistently. New products are introduced in response to competitor behaviours, cost reductions are targeted when inputs rise in price, product performance improvements occur in response to major quality issues with customers.

    Level Two is a step up, however, because at this level the supplier is aware of and responsive to the need to change. Projects in this organisation are chaotic, over budget, often late, saddled with timelines that require perfect execution at every step, and very high stress!

    These suppliers are also usually underperforming financially, and rather unpopular with their customers. Their customers may choose to micromanage them while desperately seeking to find alternatives.

    Level Three – One-dimensional
    “Cost is #1. Service and Quality are a given.”

    This approach is sadly too common. The assumption that service and quality are a given is a common statement from purchasing executives and others who are seeking to simplify decision making to a ‘cheapest of three quotes’ approach. In reality, service and quality performance are a function of good project and process control, not cost.

    A Level Three organisation is obsessed with cost reduction, not value creation for its customer base. Of the three project  management parameters, Cost, Schedule, and Scope, schedule and scope are sacrificed constantly. Quality of result for the client is secondary.

    Financial performance at this level can be satisfactory, rarely is it outstanding. Clients continue to deal with you, not because you are outstanding, but because you are tolerable.

    Level Four – Systematic
    “We grow margin through our structured cost reduction program.”

    At Blue Belt level, we are starting to move from chaos and narrowly focused activities to look at the system.

    At this level we structure our approach to all projects, cost reduction, new products, and skill enhancement activities. The organisation is starting to understand that it must focus its resources on the projects that generate the highest return on investment for the  enterprise, not just the department. The organisation is focused on delivering the ROI by achieving cost, timing, and full scope delivery simultaneously, rather than in competition with each other.

    Customers enjoy working with this type of supplier as they are giving customers a very underrated commodity, absolute reliability! As a customer managing a supply chain, you usually have many suppliers who are playing at the lower levels of Project Evolution, these suppliers consume your time, energy, and other resources. Suppliers who are absolutely reliable and always hit their targets are precious.

    Level Five – Leveraged
    “We systematically look to create more value by changing how we work with suppliers.”

    “It is always easier to talk about change than to make it.” Alvin Toffler.

    At Blue Belt level, we run projects for the benefit of the entire company. Moving up to Red Belt, we extend the concept to include our suppliers so that we can integrate their ideas and skills, and create even more value for the enterprise.

    We actively involve our suppliers in our projects and while they are not true partners yet, we are conscious of how our behaviours can make life difficult for them and we will modify our actions to give them a higher chance of succeeding to deliver their contribution to our project.

    Customers may not explicitly see the difference between Red and Blue Belt levels. What they will see is the results of true collaboration becoming apparent by increased reliability of your performance to timings, budgets, and quality. The financial performance of this organisation is improved as the wasted effort inherent in poor project and process management is disappearing.

    Suppliers like working with customers who can conduct themselves in this way. The roadblocks to them implementing  improved processes internally are reduced, because their customers have removed many of the issues that they created through their (the customers’) own poor performance.

    Level Six – Cooperative
    “Our supply chain works with us to take cost out for all of us and improve flow.”

    At Brown Belt level we are really starting to build a competitive advantage. Lead times for projects are dramatically shorter, the budgets are always hit, and meeting or exceeding the project scope is the norm. While this sounds like nirvana when you are at the lower levels, it is very achievable. This can be done without spending years of development on the system, and especially without the need for complex additional software!

    This necessitates that we must have our suppliers win by their involvement. This is the level at which the buzzword of ‘collaboration’ takes on its true meaning. If we truly want to gain suppliers’ collaboration, we have to treat them well. If we attempt to work with them at Brown Belt level, yet our purchasing behaviours are at Green Belt level, then collaboration quickly disappears and is replaced by resentment.

    Customers (especially internal sales departments) love it when they can reliably talk to their customers about new product launch dates and know that the product will be available, it will work, and it will be profitable!

    Many suppliers have been forced into expensive interim financing arrangements, or even into administration, due to their customers delaying their own programs and deferring orders. Suppliers love it when a customer can be relied upon to hit their launch dates and volumes. Once again, the system works reliably and even more waste can be eliminated.

    Financial performance of all parties continues to improve. The reliability of the organisation at delivering new products and improved performance becomes a marketable advantage that the company can use to gain future business and stand out from its competitors.

    Level Seven – Snowball
    “We provide market-leading service at a significantly smaller cost base to our competitors. This boosts sales.”

    At Black Belt level we have taken the organisations skills to define, plan, execute, and improve the skills at project management to such a level that it is a competitive advantage in the marketplace. Customers give the supplier more work because it is just easier!

    Clients who have achieved a sufficient advantage in this area spend less time competing for work and can hold a higher margin on pricing.

    Projects are always hitting the three key parameters of Cost, Schedule, and Scope.

    Delivering on these performance parameters actually takes fewer resources than before, so that the organisation can actually process more projects  with the same level of resources. The organisation’s return on investment continues to improve.

    Once you have determined  where you believe your organisation’s current performance sits, it is then possible to discuss the key actions to be taken to lift your performance towards the Black Belt level.

    A project that hits scope and budget but blows out time is severely at risk of  being late to market. The product may become a ‘me too’ product that is at best second to market. Repeatedly delayed projects will just about guarantee that a competitor who can deliver on Time, Budget, and Scope, will develop a competitive ‘gap’ in performance that condemns the company to compete with obsolete products, services and processes on a commodity pricing approach. This is a recipe for financial ruin.

    A project that delivers on Time, and Scope but blows the budget can become known as a white elephant. The investment may never be recovered and the ongoing operational costs may doom the project to poor financial returns. Again the road to ruin waits!

    Achieving Budget and Timing but failing to achieve the scope means that you have a cost-effective and timely product that  doesn’t work! Once again, financial failure beckons.

    Conclusion
    Project Evolution is focused upon the project management activities in an organisation. It does not matter if the project is a new product, a cost reduction activity, or introducing a new training system to the enterprise. They are all projects.
    You may have noticed that we have not once referred to the role of software. Likewise, we have not referred to the role of the ballpoint pen. Both are just tools. The software, like the pen, will do what it is told to do. What to do, when, and how, are key decisions that software cannot answer. It is the role of management to determine the system and parameters for the software, or the ballpoint pen, to then use.

    Comments are welcome.

    Have and Awesome Day

    Jason

     


    2 comments.

    Rules & Passion, Both Are Essential


    Rules

    In Engineering and Manufacturing, there are two fundamental rules that must be followed.

    The first is to obey the laws of the country you are operating in. The second is to obey the laws of physics.

    Gravity exists, materials strengths are real, and mathematics is precise. These rules give you guidelines to follow and tools to use to evaluate your ideas.

    Passion

    As someone who has run large manufacturing businesses and seen best practice all around the world I saw passionate people daily. These are three primary sources of passion that I see in people in these industries.
    1.    Service. Help your client to have a better life.  I know people who do highly repetitive work, hundreds of times every day who are passionate about making sure every part is perfect and will allow the customer to enjoy their new purchase.
    2.    Creation. Creating something new! Whenever a new model vehicle was being built down the assembly line at GM, or a new fridge was being trialed at Electrolux, everyone was interested. People cared, and they were excited to be part of creating something new.
    3.    Connection. Many people are passionate about working with others to achieve a greater goal. We enjoy the idea of working with like-minded people on a project.

    Rules and passion in manufacturing live together.

    Without passion there will not be the drive to innovate and improve.
    Without rules we would lack a framework for analysis and decision-making.
    The two together allow creativity to be brought into reality.

    Comments are welcome.

    Have and Awesome Day

    Jason


    0 comments.

    The Real Impact of Being Late


    Be honest…
    Can you proudly say you are a punctual person 100% of the time?
    If so, fantastic, keep it up because it’s a RARE and admirable quality. If not, and you’re a little sloppy in this area, then tune in to what I’m about to say…

    Here’s the thing…
    Being late may seem small to you and not a big deal… and for the most part… people will be “nice” and not say much.

    Problem is…You’re only seeing the sugar coated version of what they really think.

    Do it once, and you can be forgiven… But if you’re a repeat offender know this, you are doing some serious damage to your reputation.

    Having a reputation for being late or missing deadlines will ultimately cost you money, opportunity and respect.

    This applies to us as individuals.

    This applies in exactly the same way if your business is delivering late to your customers. Plus, you’re probably not hearing about opportunities that have been given to someone else, simply because they don’t feel confident enough to trust your commitment.

    One company I worked for wanted to give more work to its new favoured supplier. The supplier was struggling and falling behind. The company wanted to give them the work, they wanted to take the work, BUT it didn’t happen because they lost the trust of the customer that they could deliver!

    You see, people won’t buy from you, do business with you or commit to you in any way unless they feel safety and trust.
    If you deliver consistently late then you need to rebuild trust and reestablish the feeling of safety. Rebuilding safety and trust is a process that takes time.

    You must have patience and compassion throughout the trust-building process.

    You don’t have the right to rush or hurry people along to start believing you’re reliable just because you say you are. It will take considerable examples of action… not once or twice… and not words alone.

    If you want your business to be known and respected as being super-efficient, reliable and punctual, then here’s my closing thought…

    If you don’t want to be late for deliveries any more… simply DECIDE to be early every time.

    Don’t discount this because of its simplicity. Make this your new rule or philosophy.

    Decide to be early in everything you do.

    Improve your DIFOT (Delivery in Full on Time) to 100%

    To make that happen, you’ll need to plan ahead and get organised. A firm decision is one thing, but preparation and pre-planning is vital to carry it through…
    YES, you can do it!

    Most of our clients don’t believe it is possible when we first discuss this with them. Once they have achieved it they wouldn’t go back to the old ways if you paid them.

     

    Comments are welcome.

    Have an Awesome Day!

    Jason


    1 comment.

    A Most Insidious Unseen Wall


    A most insidious “Unseen Wall” that can afflict your organisation is the behaviour of insularity.

    I worked 13 years for a large automotive company and it was so easy to be all consumed with the day to day activities and the internal plans and programs that we had to deal with. I missed out on so many opportunities to have visited suppliers, customers, non-allied businesses, attend seminars, and meet experts in my field and others.

    The Unseen wall was the assumption that there wasn’t anyone out there who could help me. I knew all I needed to know. We had great internal knowledge and that was all that was required. I fell into this trap on a number of occasions, and therefore missed many opportunities to learn.

    Where there was work to be done, I made sure it was done. However, there was also valuable work that could have been completed even faster and more profitably if I had some of the knowledge that was available had I not been so insular.

    Many organisations today still have this insularity, we were only one of them.

    “If I knew then what I know now” is a cliché for good reason.

    My clients often remark to me that they wish they has known years ago what we have shown and helped them implement. They could have avoided years of heartache, struggle, and stress.

    And so we need to ask ourselves, “Who are we talking to who might know something that we need to know?”

    Comments are welcome.

    Have an Awesome Day!

    Jason


    0 comments.

    Winning HiValue Targeted Business


    Today Bede Boyle, Chairman of Manufacturship Group provided insights  on how to consistently Win HiValue Targeted Business in the cost driven highly competitive marketplace:

    1. Strategic Differentiation
    2. Strategic Marketing Dynamics
    3. HiValue Strategic Marketing Activities
    4. The new Client-centric Business Model
    5. Driving Strategic Growth by going beyond ‘The Factory’ to become a Marketing Business that sells Products and Services
    6. Developing a Disciplined, Systematic and Measurable approach to Sales and Marketing
    7. Strategic Business Development Workshop Processes
    8. Bede Boyle Strategic Business Development

    Bede has over two decades experience as a Corporate and Business Strategist and has assisted some of Australia’s largest contractors including Fluor Australia, Laing O’Rourke and Leighton Contractors together with SMEs and Professional Service Firms Win HiValue Targeted Business against fierce competition.

    He has observed that executive clients were all concerned with the same question:

    How can we Win more Profitable Business to deliver superior ROI and Increase Shareholder Value?

    HiValue Targeted Business by Bede’s definition is both highly Profitable and successfully Positions the firm for Strategic Growth in the Targeted Market Segment.

    1. Strategic Differentiation

    Strategic Differentiation can be a prime source of Competitive Advantage in the cost driven highly competitive market and is achieved by Depth of understanding of Target Market, Leveraged in development of a clear Value Proposition to the Target Market.

    Strategic Differentiation is conveyed by a unique Value Proposition to the Target Market. Where Value = Functionality/Cost and is Perceived as Value-for-Money.

    2. Strategic Marketing Dynamics

    The market place is dynamic and changes constantly as it adapts to new circumstances. The firms that consistently win business in this environment are the ones that adapt dynamically to these changes.

    A successful marketing strategy is built around a clear Value Proposition to targeted prospects. The Value Proposition must be a congruent expression of the firm’s core capabilities which are translated into a marketing strategy by:

    – defining and segmenting the markets where the firm’s capabilities add value
    – developing clear value propositions for these segments
    – articulating these value propositions throughout the firm
    – establishing a reward system that is congruent with these value propositions
    – being consistent in taking these value propositions to the market.

    The key reasons firms don’t succeed in their marketing efforts are:

    – The value propositions are incongruent with the firm’s capabilities
    – There is no or insufficient engagement of the propositions by the firm’s staff
    – The propositions are static and have not changed in response to the market
    – The management of the propositions is poor
    – The propositions are not sufficiently unique enough to differentiate the firm in the marketplace

    3. HiValue Strategic Marketing Activities

    Increased competition and more sophisticated clients looking for Value-for-Money dictate the need to enhance Relationship Management with existing clients.

    Most importantly, having in depth relationships with clients pays dividends by their willingness to endorse the use of case studies and to act as advocates to their suppliers and customers.

    Brad Shields was former Marketing Manager whilst Bede was Chairman at Bywater McLean Pty Ltd and is currently Principal Consultant with ABM Systems. Brad observes that most firms tend to reward the winning of new clients much more than by building relationships with existing clients. The thrill of the chase and the excitement of a new client can be very intoxicating however truly successful businesses concentrate on maintaining deep, meaningful and long term relationships with their existing clients.

    Brad recommends that all firms have separate budgets and time allocations for building relationships with existing clients. He proposes the following process to maximise the strength of relationship with the firm’s existing clients.

    Over-deliver on existing engagements.

    – Build processes that ensure quality, timely delivery and client satisfaction all exceed client expectations
    – Ensure that all management walk the talk on exceeding these client expectations
    – Ensure accessibility to senior management to discuss progress and early engagement on solving identified problems
    – Engage with all staff to excel at delivery
    – Deliver more than the client expects – and do not charge for it!

    Work on Building the Relationship

    – Spend time supporting the client in other areas
    – Network for and with your clients at Industry Seminars and Conferences
    – Present seminars for your clients in areas that complement your engagement to demonstrate how you can meet their other unmet needs.

    Add to the firm’s ability to serve your client in other areas

    – Add in depth industry sector knowledge
    – Add in depth knowledge both of their business and their people
    – Provide Executive Briefings to the client on Business Critical Issues affecting their business

    Find, pursue and capture the next Opportunity

    – Use the entire project-team to look for new Opportunities and make sure the Opportunities are identified, pursued and captured
    – Clarify and Quantify the need with the client
    – Identify sponsor/recommender within client organisation
    – Suggest a Proposal at the right time
    – Clearly demonstrate Cost / Benefit of Proposal

    4. The new Client-centric Business Model

    The highly competitive global business environment has resulted in a relentless cost/price squeeze for many firms. As a result many firms have become inwards looking with a myopic focus on cost reductions. However, in reality profitable growth is paramount in ensuring business success. This requires an outward looking customer-centric firm with a willingness to adopt new ideas and methods to secure and retain customers to drive profitable growth.

    Feedback from a coal industry survey undertaken for a major engineering design and construction firm said that clients wanted their service providers to demonstrate the following attributes:

    – An understanding of their business needs
    – Delivery on assignment as promised
    – Deliver cost effective and timely services
    – Hassle free execution and invoicing
     – Above all No Surprises- Especially Cost Overruns

    These five attributes require firms to demonstrate customer-centric behaviour.

    The Client-centric Business Model is the logical next step for a firm that has developed a strong customer service ethos. The critical success factor in this strategic shift is development of client-centric behaviour throughout the firm. Manufacturship Executive Briefing white paper WP 19 outlines the journey to become a Client-centric Firm.

    5. Driving Strategic Growth by going beyond ‘The Factory’ to become a Marketing Business that sells Products and Services

    Jason Furness, Manufacturship CEO proposes that the role of Manufacturing Operations Management is to deliver a Competitive Advantage – measured in superior DIFOT and Quality – which Sales Management can Leverage in the Marketplace to win business against fierce competition.

    In fact the firm becomes the supplier of choice based on its reputation for superior DIFOT, Quality and Cost with development of a quantified Value Proposition can command a price margin above its competition even in a cost driven marketplace.

    Becoming a Marketing Business that Sells Products and Services

    Transformation ModelAsk the fundamental question:

    What Business are you Really In and Why?

    Most businesses describe themselves in the context of the Products or Services they make or provide.

    The realisation that you are a Marketing Business that Sells Products and Services focuses everyone on your target market.

    This is a truly Transformational Change for most businesses and focuses your operations and innovation on your target market to Drive Strategic Growth.

    Innovation should be focused where new ideas and methods will have the greatest impact on the interface with the customer to deliver enhanced Perceived Value.

    Jason Furness CEO

    6. Developing a Disciplined, Systematic and Measurable approach to Sales and Marketing

    The Leaky FunnelJason Furness has observed that most businesses have a very ad hoc approach to sales and struggle to win business whilst successful firms have a disciplined, systematic and measurable approach to sales and marketing.

    The Leaky Funnel and MathMarketing

    The Leaky Funnel is a book about funnel management authored by Hugh Macfarlane which proposes a major change in the way businesses organise and manage their combined marketing and sales funnel.

    The central argument that the way businesses manage their sales funnel should centre on the buyer – not the seller – is based on Hugh’s 20 years’ plus experience in advising investors, Boards, CEOs, Directors of Sales and Marketing and other senior managers with products or services that are complex to sell.

    MathMarketing created Funnel Logic ™. Developed as a unique B2B approach to sales and marketing by:

    – Understanding the buying process

    – Knowing how many buyers need to take each step and over what time

    – Selecting tactics capable of moving buyers through these steps; and

    – Measuring actual results and continually improving.

    www.mathmarketing.com

    This systematic approach to sales and marketing is a logical reinforcement of the Client-centric Business Model discussed in section 4.

    7. Strategic Business Development Workshop Processes

    A common view held today is that the formulation of business strategies is easy, but the real issues and challenges are those of achieving flawless implementation. The problem of unrealized business strategies has challenged leading management thinkers since the late 1980’s.

    Michael McLean Manufacturship, Chief Performance Officer has worked over two decades to develop a highly cost effective Strategic Business Development Workshop Process to achieve Enterprise Wide Alignment to Capture Targeted Business Opportunities.

    1. Design and Facilitate Strategic Business Development Workshop
    2. Plan-on-a-Page to consolidate and communicate how key Actions are deployed
    3. Deploy Plan and Monitor key Actions to Capture Targeted Opportunities

    There are many ways to produce a Strategic Business Development Plan, however it is critical that the actions in the plan are deployed and communicated for everyone so they can truly be “on the same page”. One of his typical client workshop outputs is provided as an example.

    “3 Horizons” Right Left Strategy from 2006 to 2012 for an Australian services company

    3 Horizons Strategy for Service Company

    3-Horizons

    The “Three Horizons” [The Alchemy of Growth: Baghai, Coley & White, 1999] is a powerful and complementary strategy setting technique for many organisations, and especially for services sector and underpinned the “Plan-on-a-Page” above.

     

     8. Bede Boyle Strategic Business Development

    Bede is Chairman of Manufacturship Group founded by Jason Furness. Bede contributes over two decades experience as a Corporate and Business Strategist assisting firms including Fluor Australia, Laing O’Rourke and Leighton Contractors, SMEs and Professional Service Firms.

    Bede is Advisor to Elliott Management Corporation USA, UK, HK on Australian Investments.

    Retained by Managing Director of Hancock Coal, 2011 to 2012 to lead Independent Peer Review of Australia’s largest proposed Coal Mine with vertically integrated Rail and Port Infrastructure. This led to ongoing confidential support to the Managing Director in preparation of GVK and Hancock Coal Board Reports and Presentations to Directors and Investors.

    Retained as a Business Development Advisor to Win Targeted Business by Directors of Walter Diversified Services from 2007 to 2009, SMEC 2008, AMC Consultants 2009 and as Member Advisory Board, Renoir Consulting Group from 2008 to 2009.

    Founding Chairman of AustCoal Consulting Alliance in 2006 to integrate capability of MINEC Mineral Economists with leading mining and management consultants to provide strategic support to AGL, BlueScope Steel, CAMDA- Xuzhou Coal Mining Group, Genesee Wyoming Inc., Exxaro Coal Australia, OPG Power Ventures India, SMEC India, Vale Australia and Xstrata Coal.

    Chairman of Bywater McLean Pty Ltd from 1996 through to sale to Axon plc in 2002. Under his guidance the firm developed a blue chip client base including ADI Thales, CBA, Department of Defence, Fluor Australia, GM Holden, QANTAS and Zurich Insurance.

    Directorship roles to lead Strategic Business Development and Profitable Growth for Professional Service Firms in diverse sectors from Food Processing to Coal Mining Industries:

    2007 to 2010 Non-executive Director Synergy Management Consulting Group

    1994 to 2008 Non- executive Director PACRIM Environmental

    1994 to 1996 Director Consulting Futureware Corporation

    Retained by Managing Director, Powercoal Pty Ltd to lead Strategic Business Development including documenting confidential board submissions and presentations to both the Powercoal Board and Pacific Power Board to sustain business profitably during a highly turbulent period and to lay the foundation for divestment of the state owned enterprise.

    Formed HiValue Strategies in 1994 as an Independent Corporate & Business Strategist to NSW Freight Rail coal operations, BHP Newcastle Steelworks, Port of Newcastle and PWCS.

    Manager Technical Services and Manager Mining Holdings with Coal & Allied Operations, Chairman and Member of C&A Major Projects Committee. Project Coordinator for Hunter Valley Mine and CHPP project and Project Leader for Liddell Longwall and CHPP project. Chairman Australian Coal Association Environmental Committee and Member Research Committee.

    Prior to joining Coal and Allied in 1978 Bede was a professional consulting engineer to BHP’s Newcastle Steelworks, Collieries, Offshore Oil & Gas and Peko Wallsend collieries.

    As a BHP graduate mechanical engineer (BEng UNSW) he was appointed in 1963 to Commonwealth Steel under the BHP Junior Executive Development Program to gain experience in all facets of steel making, heavy engineering and foundry operations.

    If you would like to contact Bede, you can do so at e: bede@manufacturship.com m: +61 [0] 419 213 010

    Have an awesome day

    Jason

     

     

     

     


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    The Unseen Walls Are What Will Trip You Up.


    Any change process will face obstacles and barriers to its implementation, as will any strategy.

    When the barriers and obstacles are visible we can usually find a way through or around them.

    Where we come unstuck is when we come up against an unseen wall that derails our thinking. The unseen wall is often an assumption we have made, sometimes without even realising it.

    Here is an example….

    “We cannot reduce cost anymore. There is no fat left”

    I want to share a story about the unseen wall of cost reduction.

    Ten years ago I had the opportunity to observe a Japanese company over a period of about 18 months. This company was set a challenge by an auto manufacturer (its primary client).

    In the midst of major financial crisis, the challenge was to reduce its conversion cost by 30% over 3 years.

    This company was very competent with a well established and very effective Lean program, better than anything I have seen in Australia. Yet they were still expected to reduce conversion costs by 30%.

    At each of the five visits over 18 months I could see the progressive results displayed on the walls in the plant, and it all looked great. What was also obvious in my last visit was that there were noticeably less people around. There were so few people who were actually operating the machinery and maintaining it.

    Sitting with the Plant Manager and translator I was told that they had indeed achieved the targeted 30% cost reduction in 18 months – well within the 3 year time frame challenge set.

    The outstanding result was that both Japanese company and their client came out of the financial crisis they were facing with a stronger business and a more competitive offer.

    This result would not have been possible if they had an assumption (unseen wall) that there was no more cost reduction to be had.

    When you can identify your unseen wall, you can then open the conversation about how to move forward and get around or over it.

    What unseen walls have been blocking your business growth?

    Comments are welcome.

    Have and Awesome Day

    Jason


    0 comments.

    How New Machinery Can Send You Broke


    The allure of the latest pace of machinery at a trade show is hard to resist.

    We have been using our existing machinery and whilst it does the job it is slower, showing some signs of wear, and needs more care and attention than ever before to keep it going.

    However the new piece of machinery has all the cool new features and buttons! Plus it is just……….well, you know……………NEW!

    But be warned: New Machinery can also send you broke, rapidly, if its purchase is not considered carefully in terms of the impact upon your business.

    My Number 1 Tip To Consider BEFORE You Purchase New Machinery

    Do an analysis on the impact its purchase has on operating cash flow of the business NOT the standard cost!

    If the new machinery has a capability that allows you to enter a new market that previously was prohibitive to enter then maybe it is worth running a business case analysis to see what is possible.

    If the selling point is that the new machinery is faster…then watch out.

    The actual processing time of our machinery is usually a tiny proportion of our lead time. Where this is the case a faster processing time will therefore not result in a shorter lead time.

    A faster processing time will result in a lower standard cost (and this is where the real problem begins!) A lower standard cost often means we believe we can sell at a lower price. Often however, our real cash operating cost remains the same.

    Unless the real labour, and other overhead costs reduce we actually haven’t saved anything. And on top of that we also have to think about where the funds for the purchase and installation costs of new machinery are going to come from.

    So, before you buy a new machine do the analysis on the impact on the operating cash flow of the business NOT the standard costs.

    Comments are welcome.

    Have An Awesome Day!

    Jason


    0 comments.

    You are a Marketing Company that Makes Things


    Manufacturers Monthly Feature Interview

    About two weeks ago we released our first book, Manufacturing Money – How CEOs can rapidly lift profits in manufacturing. The book is available via our website here.

    I was interviewed by Bren Balinski of Manufacturers’ Monthly about the book and key messages for manufacturing in Australia. Click here to read the interview.

    Comments are welcome.

    Have an Awesome Day

    Jason


    0 comments.
     
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