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    Issue 1 – April 2016

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  • We had confidence the whole way through that the project was on time and on budget


    Current Client Result Series.

    Today we hear from Rob Amor. Rob is the Production Manager at Evoqua (formerly Siemens) in Windsor NSW

    Are these the kind of results you have been looking for?

    “Our track record on previous capital projects was that we were often significantly over budget, over schedule, and began production with a long ‘snag list’ of issues that had to be resolved before production would be stable. This meant that our production costs were up. Often we would fall on our faces before we even knew we had a problem. We knew we needed help.

    Using the PFMEA tools Jason & Mike helped us evaluate and mitigate risk well before we had begun to manufacture the system or the product. The critical chain project management approach meant that we were confident that we would hit the project targets. Everyone (internally and externally) was held accountable for their role in the project and the chinks in our armour were exposed early enough for us to take action to avoid any impact on the project.

    Ultimately this whole approach is about cost savings or avoidance. We had confidence the whole way through that the project was on time and on budget. The operators were involved and owned the production equipment and system long before we began production on site. The operators are happy and the project has been great value for money. There are no quality issues because of the equipment and we began production at full capacity. This made the job so much easier for everyone!”

    Rob Amor – Production Manager, Evoqua (formerly Siemens), Windsor NSW

    If you or someone you know wants these kinds of results in your business call me on 0488 337 666 for a chat about how we can help.

    To read more of our Client Results, please click here

    I look forward to speaking with you.

    Have an awesome day!

    Jason


    0 comments.

    Tales from the Real World: Focus on Flow


    Here is a ‘Tales from the real world’ extract from our book ‘Manufacturing Money’

    Today our tale provides you with a real world example of ‘Step 4: Focus on Flow’. I hope you enjoy the preamble and the tale.

    “Once you understand the issue that is holding your enterprise performance back and what to do about it, there are seven key actions for you to follow to rapidly implement change into your business that allows you to rapidly respond to market changes with short lead times and less cash tied up in expenses or stock.” You can read about the 7 steps in Chapter 5 of my book on Delivery.

    Today we will look at a real world example from Step Four.

    Step Four – Focus on Flow

    Picture1

    We are focusing all of our efforts on the constraint. What we really want to maximize is the velocity of production through the constraint according to our newly defined schedule. Anything that can disrupt the flow at the constraint has to be identified and resolved before the production schedule and rate can be negatively impacted. Typical issues to be managed are shown in the figure to the right.

    In your environment there may be many other issues, which could impact upon the ability of the constraint to produce the schedule. We focus the great bulk of our attention, improvement resources, and management focus on ensuring that this schedule is achieved. All of the continuous improvement resources of the organization should be focused on improving the flow at the constraint. Stop other projects and have everyone focus on this area.

    This last paragraph is absolutely critical, read it again.

    What this paragraph means in practice is that the organization will turn itself upside down in order to ensure that the constraint can achieve its schedule. The rest of the organization subordinates their own demands, priorities, past practices, and needs in order to be secondary issues so as to help the constraint to make the schedule.

    Some examples of subordination that have occurred when we have worked with clients include:
    • Maintenance employees beginning their shifts at the constraint rather than in their maintenance area so we can ensure a smooth start-up or changeover.
    • Labour being shifted from a non-constraint area to the constraint area to ensure a full crew was available to run the constraint at all times.
    • Continual improvement projects on non-constraint being stopped and all the capability being deployed to the constraint.
    • Forklift schedules being altered to ensure the constraint never runs out of raw material.
    • Extra inventory being stored in front of the constraint above normal limits.
    • Extra quality checks occurring on materials going to the constraint to ensure that capacity is not wasted on defective materials.

    Tales from the Real World
    The constraint in one business was a section of an assembly line. The line ran a partial second shift in order to build up a buffer stock of cabinets that would be consumed during the day shift when the final assembly line would finish the products. The final assembly line ran at such a rate that the buffer would be almost completely consumed by the end of day shift. If the afternoon shift could not return the buffer to a certain level then we knew that by the end of day shift we would run out of buffer stock, our rate of production would slow and we would miss schedule.

    One of the contributing factors upon investigation was that absenteeism could affect the crew and when people were missing they would slow the line down and do the best they could to keep going. A different section of the plant also operated a second shift. When this section of the plant was asked to supply labour to help out, they refused. “I have my production schedule, and my efficiencies to meet. That’s their problem!” After a lot of explanation and some very clear direction from management a trial was commenced. Each afternoon 3 people would move from their original section and be ready to work on the cabinet assembly line.

    There were instant results, the assembly line supervisors were guaranteed a full crew from the beginning of their shift. Output increased and the buffer of stock was always full. Any people who were excess to requirements returned to their original areas. The actual impact on the department that was so concerned for their own goals was, in reality, negligible. They had excess capacity and no shortages occurred as a result.

    After a week or two the resentment was gone, everyone understood the benefit, and two groups, who had been barely talking, worked more closely together on this and other issues.

    If you would like to read our book Manufacturing Money, you can buy a hard copy here, or alternatively download a kindle version here.

    Comments are welcome.

    Have an Awesome Day!

    Jason

     


    0 comments.

    Tales from the Real World: Tie The Rope


    Here is a ‘Tales from the real world’ extract from our book ‘Manufacturing Money’

    Today our tale provides you with a real world example of ‘Step 3: Tie the Rope’. I hope you enjoy the preamble and the tale.

    “Once you understand the issue that is holding your enterprise performance back and what to do about it, there are seven key actions for you to follow to rapidly implement change into your business that allows you to rapidly respond to market changes with short lead times and less cash tied up in expenses or stock. You can read about the 7 steps in Chapter 5 of my book on Delivery.

    Today we will look at a real world example from Step Three.

    Step Three – Tie the Rope
    One of the sources of noise and distraction that takes people away from the schedule is when they have many choices of what to produce next. By definition there can only be one optimal schedule to best use the constraint. By ‘Tying the Rope’ as defined by Goldratt what we really mean is that we do not release raw materials, work orders, or other information to the beginning of the process at a faster rate than the constraint can handle, this has some similarities to creating a ‘Pull’ in Lean terms. Fig 5-4 shows a representation of a simple process.

    Picture1

    In the diagram the constraint is process B. B can only produce 10 units per hour whereas the other processes can produce at a faster rate. The impact of tying the rope is that we only release sufficient raw material to support a production rate of 10 units per hour. Investing in any equipment other than Process B is a complete waste of money. Investing in more of Equipment B is largely a waste of money until we have boosted the output of B to its absolute maximum. Until B is running its optimal cycle time, three shifts seven days a week 365 days a year, you technically have not maximized its output and can defer investing in more capacity. You may not choose to run this type of production schedule for other reasons but be conscious that investing in machinery should only be done once you have absolutely made the current constraint really earn its keep.

    This means that the other processes, A, C, and D are going to have spare capacity and will remain idle. Remember the objective is to maximize the throughput, not production.

    Our people do not have to wade through lots of WIP to see where an order is, nor do they have to make a complex decision on what job to make next. The job is to follow the schedule and process the WIP in front of them, which will not be much, in the sequence defined.

    Raw materials will not be released until the appropriate time on the schedule so (after the initial flush of old stock) it becomes very easy to follow the schedule, as you have no other option.

    When we tie the rope we will see the shop floor production areas open up, and the surplus capacity in other work areas will be readily visible.

    ERP and other scheduling software often ask us to schedule each individual work station and generate schedules for each machine to maximize efficiency. This is a lot of work and completely unnecessary. Our goal is to maximize throughput, which is done by maximizing the production of the constraint. Therefore we only need one schedule, the constraint schedule. This eliminates the need for complex software. Your existing system can usually be adapted to give you the information you need, even if it is a purely manual system.

    Tales from the Real World
    A refrigeration factory had a problem with missing doors for one of its high margin product line ups. The door line area supervisor would do 4 or more stock counts a shift in order to try and minimize (not eliminate) doors being missing at the point of the assembly line where they were required. There were many, many doors in stock; however large numbers were being missed from the assembly line each day.

    Upon analysis the metal folding process that produced the skin for the door construction was found to be the constraint. A schedule was developed for this line in order to best meet market demand. We came in at 5am the next morning to issue the schedule, talk to the day shift that operated the machinery and to be ready to help solve any issues we had with following the new schedule. That day we worked two hours overtime as we were behind where the schedule said we needed to be.

    By the end of the third day we had eliminated the shortages from the assembly line, production in the area was stable, overtime was no longer required, and theproduction supervisor could breath. The supervisor had an extra 2 hours a day to do his job and a lot less stress. More fridges were being made as per schedule and shipped out to customers as part of the reduction of the back orders. No software or capital equipment was required.

    If you would like to read our book Manufacturing Money, you can buy a hard copy here, or alternatively download a kindle version here.

    Comments are welcome.

    Have an Awesome Day!

    Jason


    0 comments.

    Going Beyond the Resources Boom


    Towards Globally Competitive Australian Manufacturing and Services into the Asia Century

    Australia is placed in the Right Place at the Right Time for Strategic Growth in Manufacturing and Services into the Asia Century. However, there will be both Winners and Losers!

    Australia was the lucky country richly endowed with Agricultural and Mineral Resources. We fell off the sheep’s back into a hole in the ground in the resources boom. With the down turn in coal and iron ore prices we need to climb out of the hole in the ground and engage with Asia and develop Australia’s Globally Competitive Manufacturing and Service Industries.

    There is a fundamental and historic shift in the world’s economic activity from West to East:
    • In 1990 China and India [CHINDIA] together accounted for less than a tenth of the world GDP,
    • By 2010 China and India accounted for almost a fifth of the world GDP, and
    • By 2020 China and India are projected to account for more than a quarter of world GDP.
    • In 2025 The Asia Region will account for more than half of world GDP.

    The Asian Century presents an unprecedented mix of complex Opportunities and Threats for Australian business enterprises. There will be Winners and Losers!

    Free Trade Agreements with China and India will create Winners and Losers. Australian mineral and agriculture enterprises will benefit from massive potential export markets. However, Australian manufacturing industries will be particularly vulnerable to low cost imports dominating the market. Australian manufacturers will need to seize the opportunities in Innovation and leverage Advanced Manufacturing through new Servicification Business Models to become Globally Competitive.

    Globalisation is creating a world of increasing complexity where historical boundaries between industry sectors and countries are rapidly fragmenting to produce discontinuous changes. Industries are tending to consolidation on a global basis to lowest cost centres underpinned by new information management technologies supporting global supply chains.

    Despite the announcement of closure of Australia’s automotive industry there are many successful Australian manufacturers achieving superior ROI and they exemplify similar characteristics of being agile, customer-centric, export-focused, and innovative in leveraging emerging technologies and adoption of new business models.

    As we encounter accelerating change in the global commercial environment Agility will be an attribute of successful Australian firms who will become Asia-centric to capture export Opportunities in the Asia Century.

    We have identified six sectors where Australian Manufacturers have strong capabilities that can be leveraged through Servicification to establish Competitive Advantage and achieve Superior ROI in the Asian Century.

    1. Mining Equipment, Technology and Services (METS) as base case,
    2. Defence Industry
    3. Advanced Manufacturing and Servicification
    4. Oil, Gas and Energy Resource Technologies
    5. Agriculture and Food Technologies
    6. Medical Technologies

    Download the full Manufacturship Foresight Study Going Beyond The Resources Boom here.

    Comments are welcome

    Bede Boyle

    Chairman, Manufacturship


    0 comments.

    Tales from the Real World: Scheduling The Constraint


    Here is a ‘Tales from the real world’ extract from our book ‘Manufacturing Money’

    Today our tale provides you with a real world example of ‘Scheduling the Constraint’. I hope you enjoy the preamble and the tale.

     

    “Once you understand the issue that is holding your enterprise performance back and what to do about it, there are seven key actions for you to follow to rapidly implement change into your business that allows you to rapidly respond to market changes with short lead times and less cash tied up in expenses or stock. You can read about the 7 steps in Chapter 5 of my book on Delivery.

    Today we look at the first of these steps:

    Step One – Schedule the Constraint
    Most organizations schedule their production. Often they create a schedule for each machine or section based upon the optimal efficiency for that individual process or section. Complex ERP systems are essential to be able to complete this task, as are accurate Bills of Materials, and standard times.

    All of this data is complex to gather, maintain, and update. The sophisticated calculations rely upon continual updates of production performance, inventory levels, and stock availability. This takes a lot of resources and takes a lot of time; so much time that often the schedule is out of date before it is issued. Stability of performance is essential for the schedule to retain its value.

    The problem is that the real world is rarely stable.

    For a large scale business with lots of processes with high volume the result of all this micro scheduling, stock counting, incoming goods is a slow moving, inflexible, resource intensive process that is the source of frustration for just about everyone involved.

    For a jobbing shop style business where many jobs are custom, cycle times are unknown and routings are variable from job to job. The ERP solution is worse than ineffective it is just plain wrong. The environment of a job shop is the complete opposite of that required to run a stable schedule as the jobbing environment is inherently unstable.

    Just a few of the real world occurrence’s that contribute to disturbing the stability of the highly resource intensive schedule include the following:
    •  Customers change their requirements
    •  Suppliers fail to deliver on time
    •  Equipment breakdowns
    •  Employee absenteeism
    •  Operational priorities change

    The impact of all of these issues is that the schedule is often completely compromised before it is even distributed. The schedule loses credibility and consumes even more and more time to maintain and update, with no real benefit. Employees then revert to doing the best they can with what resources and knowledge that they have.

    Tales From The Real World

    A large engine plant had a daily meeting each morning to confirm the production plan for the day. Each morning they went through the production plan and the stock counts for engine blocks, crankshafts, exhaust manifolds, disc brakes, steering knuckles, etc., etc. A number of people were required to update stock counts for all of these components and many more. The numbers were a source of conflict and blame upon whichever section was responsible for not being able to support the production plan. The materials group had people whose full time role was updating the ERP scheduling system. For all of this effort the engine assembly lines still only rarely made it through a day without a schedule change driven by numbers being incorrect, or projections of when parts would be available being wrong. Quality issues with parts that made it to the line deemed the situation even more unstable. They were such an unstable business that the ERP system could not perform its role correctly. ERP adjustments and schedule changes increased the instability.

    With all of these realities we can attempt to impose stability on the real world or we can adapt our process to work with the real world so that we can have a stable and reliable system in spite of the variations inherent in the real world.
    We see companies that spend millions on ERP system forecasting modules and algorithms run massive risks of wasting their money with no increase in return on investment. ERP projects have a horrific reputation for running over budget, over schedule, and under delivering on results. The fundamental flaw in the projects is that they try to micromanage the real world at too finite a level rather than being installed at the appropriate level where they can be of huge benefit.

    So what is the right way to develop the production schedule?

    We stop trying to schedule every section of the process and focus our efforts on scheduling the constraint first and foremost. This is where we direct our attention and our resources in terms of scheduling effort.

    We create a schedule for the constraint operation, and the constraint operation alone.

    This schedule becomes the schedule for all of the machinery and processes. There is no need for other schedules that are different for different parts of the factory. The schedule however does need to be phased for time. What do we mean by that?

    The process before the constraint must commence making product for the constraint before the constraint needs it. The schedule sequence is the same; however the operation must commence some time earlier so that when 10 units of product A are required at 7:00am they have already been manufactured and are waiting ready for processing.”

     

    If you would like to read our book Manufacturing Money, you can buy a hard copy here, or alternatively download a kindle version here.

    Comments are welcome.

    Have an Awesome Day!

    Jason


    0 comments.

    How To Handle The Pay Rise Question


    How do you respond when an employee says ‘Boss, I’d like a pay rise.’ You may prefer to duck for cover, however there are more appropriate ways to handle the dreaded question.

    In an informative interview conducted recently by Heather Dawson from Business Essentials, I was asked for a few key pointers to help steer employers through the pay rise conversation with staff

    Listen to the audio interview below or download it for later.

    If there is anything specific you would like to discuss or if there is a way we can help you please call me on 1300 226 121

    Have An Awesome Day

    Jason

    Play

    0 comments.

    The Evolution Of Manufacturing Through Thinking


    A manufacturing business with a thinking agenda gets to take charge of it’s market in a way that others emulate. Imitation does actually become the sincerest form of flattery.

    When you are positioned as the market leader in your field through expertise and not just price, you control your own destiny.

    Manufacturing 1.0

    • Silo Based
    • Product Centric
    • Race to the Bottom

    Manufacturing 2.0

    • Customer Centred Measures
    • Excellence as a Value
    • Integrated Product & Service Offer

    Manufacturing 3.0

    • Dynamically Adapts to the Market
    • Strategic Weapon in the Company
    • Systematic Activities to Drive Improvement in All Areas

    Where are you setting your sights?

    Comments are welcome and encouraged.

    Have an Awesome Day!

    Jason


    4 comments.

    Tales from the Real World: Delivery ‘White Belt’ Manufacturers


    Here is a ‘Tales from the real world’ extract from our book ‘Manufacturing Money’

    Today our tale provides you with another real world example of ‘DIFOT (Delivery In Full, On Time)’.

    Following on from our last tale here we now look at an example of what happens at the lower performing DIFOT manufacturers

    I hope you enjoy the preamble and the tale.

    In a manufacturing company with a low DIFOT performance levels (we call this a ‘Delivery’ White Belt  on our white belt to black belt operational delivery performance scale) the manufacturer is very inwards focused. Usually the company operations regard themselves as the center of the universe. In this environment there is often a very high premium placed on being ‘efficient’ oblivious of the impact that such efficiencies can have on custom service levels. Production schedules are often very inflexible, lead times are very long to the point of being uncompetitive. If the business relies upon forecasts to plan the production activities there are often many arguments about forecast accuracy as being the cause of most production stock issues.

    A business can have very high stock levels, very low stock turns, and be out of stock of many products, all simultaneously. Money is being wasted by lost sales, excess stock, overtime and other crisis management activities. DIFOT may not be a measure that is in use, if DIFOT is being measured it is very low.

    I took over as the General Manager of a factory that was owned by one of the global multi-national companies. We had to shut down the business for a week under instructions from the Australian Head Office at a time when the following situation existed.

    • 40 Days of finished goods
    • 4000 units in back order (some were in back order for over 6 weeks)
    • Sales people screaming at us for product because customers were screaming at them.
    • Too much cash tied up in stock.

    This company had a reasonably well established lean program and had all of the tools and training.

    I think you will be unsurprised when I tell you that the financial performance of the business was poor. This was despite my predecessor and the team having done some very good work that had moved the business from losing money back to a breakeven situation. The relationship with the Sales division was extremely poor with lots of blame going back and forth. Poor forecast accuracy from Marketing was the central reason put by the factory for all of the company’s woes.

    ‘Marketing forecast them, Marketing is going to get them’ was the quote from the Production Manager, who was a really great guy, the volatility and unpredictability of the market demand was irrelevant to him, that was Marketing’s problem.

    If you would like to read our book Manufacturing Money, you can buy a hard copy here, or alternatively download a kindle version here.

    Comments are welcome.

    Have an Awesome Day!

    Jason


    0 comments.

    Tales from the Real World: Deliver early, every time, no matter what


    Here is this weeks ‘Tales from the real world’ extract from our book ‘Manufacturing Money’

    Today our tale provides you with a real world example of ‘DIFOT (Delivery In Full, On Time)’.

    I hope you enjoy the preamble and the tale.

    “DIFOT  has been the most common area for rapid improvement in our clients to date. DIFOT has been elevated to well above the industry norm while we simultaneously and dramatically shrink the order to delivery time. The result is that that both of these attributes become a competitive advantage in the marketplace. Cost reduction is also a commonly encountered benefit as the smooth running of the system drops the cost base at the same time we improve DIFOT and lead time.

    These approaches produce measurable rapid results, sometimes overnight, usually within a few days, and certainly no longer than a few weeks. By measurable results, we mean measurable improvements in the company’s financial results.

    Companies can often achieve very high DIFOT and short lead time by increasing the amount of money tied up in finished goods. This achieves great customer service (sometimes) however it comes at massive financial expense for the company with cash tied up in stock.

    The approach outlined in our book “Manufacturing Money” will assist you to elevate your DIFOT to a level where it becomes a competitive advantage for you. It will also seriously shorten your lead time, often with reduced stock levels and a lower cost base.

    This approach is not a LEAN program, TQM, Six SigmaTM, or any other of the commonly understood manufacturing improvement methodologies. This approach builds upon your existing manufacturing systems and helps accelerate the improvements. The approach is based upon the Theory of Constraints developed by Eli Goldratt. Our focus is to rapidly change the performance of the business in such a way that the customers want to buy from you because your service is exceptional. The business wins, along with the customers, because this great service is provided at a lower cost base than it has previously operated at.

    Client Results – Flexco Australia
    Jason interviewed Chris Bayliss the Managing Director of Flexco Australia to prepare this case study. The interview took place 6 months after their implementation project was completed. Here are Chris’ responses:

    J: Tell Us About Flexco

    C: Flexco is a privately owned multi-national company headquartered in Illinois, USA. The company is over 100 years old and employs over 800 people globally. Flexco makes products that enhance the productivity of belt conveyors. They distribute to over 100 countries and service a diverse range of industries including mining, airports, food, and wood industries amongst many others.

    J: What Was The Situation?

    C: Flexco Australia had been through a total restructuring and review of their business. As part of that restructure we parted company with the existing production management of the organization. We were thrust into a situation where the person that took on that responsibility didn’t have the experience in production management and control, and we needed help. We were behind schedule on deliveries to customers, who weren’t terribly happy. We had been spending a lot on overtime and there’d been an impact on profitability that wasn’t good. In the year prior to you coming to help, we spent $586,000 on overtime, which came straight off of our profits, and we still couldn’t supply customers what they wanted.

    Stress levels were horrendous. One of the biggest stresses, if I look at my own environment was the difficulty of putting your finger on what was going wrong.

    J: What Changed?

    C: That’s where you guys came in, and gave us some serious guidance and sharpened up a number of skills that the people involved had. But above all, the biggest thing you did for us, or those people, is give them confidence.

    There was the introduction of a number of simple, meaningful and measurable controls in the factory. When I say about being simple, measurable and controllable, it’s for everybody – everyone on the shop floor, everybody within the company. I think the way that it started was a very positive one and that you dragged the whole company together, so that everyone shared the journey and was on top of it. I think that that worked particularly well.

    Take myself directly. One of the things that I really enjoyed about some of the changes that you’ve made was that I could just walk down to the factory floor, wander around the place and talk to people as I do. As I go to each department and glance at the board I know exactly where we’re at and why, and it gives me something to talk to the people about immediately, and they know that I’m going to be asking about it. It focuses the conversations on the meaningful outcomes. It’s a factual thing to look at.

    It gave everybody more thinking time. But to introduce the changes – no, it wasn’t difficult, but it needed a bit of … well, we had people who had been in the job for 25 years and they had to think a little differently about what they do. The good thing is it has continued, and that’s an extremely good sign, because obviously it works.

    J: What Were The Results?

    C: Customer deliveries are now on time, we have a couple of problem areas but that is because we have some technical issues with manufacturing a new product. This year there’s been virtually no overtime on production issues. Rather than having outsourced our maintenance of our plant and equipment, we’re doing it in-house. That’s how the guys are making their money. Whatever overtime we’re spending now is not to catch up or produce products, but I see it is an investment in making our equipment work better and reducing those operating costs further.

    We have reduced our operating costs and now only need one shift, instead of two. The quality of the product that we produce has improved noticeably.

    More importantly, the guys have got time to think clearly now, rather than running around like a bunch of chooks (chickens) with their heads cut off. They’ll do the improvement work, rather than running around.

    The net result has been giving people a lot more time to focus, and we’ve actually identified other areas and issues that we probably wouldn’t have identified as quickly as we have, because we got time to do it.

    It clarified one critical point – the people on the job, those that didn’t like it, had to part company, and they went off and did their own thing, which was fine. They needed to go anyway. Those that embraced it have no problem with understanding that there’s nothing unreasonable, or untoward, or other than positive to do with what we’ve done.

    It’s all good. It is the same for the direct management between myself and the people doing the job on the floor. They’ve got time to look at it. They’ve got time to work on issues without it being all-encompassing or all involving, and it’s just related.

    But above all, the biggest thing you did for us was, or those people, is gave them confidence.

    What it has done for the sales team is it’s far easier for people to give them answers on the status of their projects. That’s given them more of a transparent involvement with the factory. But where it’s had its biggest effect is the customer service/manufacturing, and really, if you think about it, customer service is really just the mouthpiece for manufacturing and the conduit for sales.

    It’s worked very well down there, in customer service; the biggest impact’s been people being able to give the clients an answer that is reliable and credible. Being on time also helps!

    Every presentation that we do at sales conferences and phone hook ups, it has given us hard, cold facts that we can table with the guys to show them what we’re doing to improve things. It’s given everybody a confidence lift, and I think that’s probably the one thing that … I know I mentioned it earlier, but that’s what has come across everywhere.

    I could show you every presentation that’s been put in front of the sales team when they come here, and there is always Manufacturship … there’s a slide on that to show what we’ve done, what we’ve changed, where we’re going, what we’re doing, and then a number of slides actually presenting what you, as in Manufacturship, introduced to us. It’s given a measurement and a presentation that shows that what the factory is doing is moving the business in the right direction.”

    If you would like to read our book Manufacturing Money, you can buy a hard copy here, or alternatively download a kindle version here.

    Comments are welcome.

    Have an Awesome Day!

    Jason


    0 comments.

    SALES The Heart Of An Organisation


    If you think of an organisation like any form of living creature – human being, animal, fish it doesn’t really matter. Living Creatures have all got different features and functions and parts of bodies, just like there are different parts of an organisation who’ve all got different roles to play and different activities to attend to. A Creatures heart is its primary life source, without a heart, the rest of the Creature could not function.

    What I’m going to talk to you about now is the heart of an organisation.

    The heart of any organisation is the function performed by sales activity. Sales drive a business, they are its No. 1 primary function. Without sales it is impossible to make a profit. NB: No one has ever cost cut their way to happiness.

    So when an organisations profit is in trouble, it will generally start recovery by cutting costs. Maybe chopping activities out, maybe deferring other activities (This is a bit like cutting off fingers or arms to save the animal if there has been an injury or an illness). As a result it will usually end up reducing its capabilities. By reducing its capabilities, for the time being it may be ensuring that it will at least survive another day. Sometimes this works, and is necessary.

    So what do we do if an organisation has a weak heart? If year after year, sales have declined and the organisation continually shrinks to manage it. Will this fix the root cause of the issue?

    Dealing with declining sales is one of those elephant in the living room issues that I’ve seen in so many businesses. Sales are the heartbeat of an organisation. If the sales process is inadequate, it needs to be addressed. If the cost base is so high, then fine, that can be a contributing issue to making it difficult to sell. It is not the only activity that must be dealt with. There will be other issues; availability of product, quality of product, range, relationship with markets, sales approaches, sales techniques, salespeople’s capabilities, and all of the issues inside the sales function of the business have to be laid bare as well as in every other contributing part of the organisation.

    Any organisation that has a sales problem is an organisation that has a weak heart. We can take some load off it, we can work around it but until we deal with the core issue we are not going to have a profitable organisation that is sustainable for the long term. No organisation can survive continually weakening sales.

    Comments are welcome and encouraged.

    Have an Awesome Day!

    Jason


    3 comments.
     
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