It’s Simple, Really!

David Edwards . Operations Professionals

Buy stuff, make stuff, sell stuff – or – sell stuff, make stuff, buy stuff. Either way, it’s a simple process at its core, yet it is amazing how complex it can become. Every day your organization makes thousands of operational decisions that all combine to determine the success or failure of your business. These decisions are made based on organizational information, information that must flow accurately from source to use point in order to drive the right decision.

Over time, inaccurate or inappropriate information drives bad decisions, leading to work-arounds used to circumvent bad information sources. And while that’s effective in the short term, it means that information used to drive one area of the operation is different than the “same” information that drives another area – the operation is not in sync. Fire fighters become valued champions and the constant blazes distract organizational attention from the simple solution.

Fix it!

Make it a priority. While fixing an information management process may sound like an “IT” project, it should be an operations priority. While IT may play a critical role in providing information technology resources required to solve a problem, operations must drive the transformation of the information management process as a whole. The information management process drives operational activity, so operations must lead the change.

Build a team, set a goal, and make someone responsible. Get on with it.

What’s the strategy here?

Start at the beginning and walk through the processes (buy, make, sell) from start to finish at a high level. Understand your key operational strategies. Who are you selling to, and what are their expectations? Are you shipping next day from stock, or next quarter after a complex engineered build? Are you making product based on forecast, history, orders, or all of the above? What drives material planning and procurement? Once you have a firm grasp on how it should be working at a high level, start mapping what is actually taking place.

Make it visible!

Process or Value Stream Mapping isn’t rocket science. Start at the end of a critical process (ex: Shipment Completed) and track backwards. What is the purpose and end result of the step, what activities must be performed to complete it, what resources are required to perform those activities? Back up to the steps that supply the required resources (human, capital, and information) and repeat the mapping process until you have tracked back to a key beginning (like a monthly S&OP meeting).

In the end you will have a complete picture of how things currently work. Once you have it documented (Visio, Brown Paper, Post It Notes, Crayon, whatever) it will be very clear how simple or complex it is, and if the complexity can be reduced or eliminated.

Rationalize it!

Get the biggest bang for your buck. Don’t get bogged down trying to create Utopia; the great white elephant will storm in and trample you to an agonizing death. Focus on the big picture and identify holistic changes that will have the greatest impact, and then prioritize them based on impact, interdependence and resource requirements. Set clear expectations for the results of each change and document current performance.

Plan to build momentum. Start out with some relatively simple changes that have visible impact. Early success is organizationally motivating and will build confidence in future changes.

Build it!

How should it work? Start at the high level. What strategies aren’t being executed properly or need to be changed? Review the selected strategies and reconfigure the high-level process flows required to achieve those strategies. That’s actually the easy part.

The more challenging part (it’s simple, but it takes time) is to back-track through all of the newly configured process steps and ensure that each step has the most efficient access available to the resources required for that step. If major strategic changes are required (ex: moving from forecast-driven to KanBan pull-driven manufacturing) a larger effort will be required to completely restructure the existing process. But once all of the detail is collected and mapped out, you have a complete model of how your operation should be working.

Just do it!

Plan to succeed. Change is just like any other process: identify the expected result of the change (ex: manufacturing driven by S&OP demand forecast), what resources will be required to make the change (VP Supply Chain, Planners, Manufacturing Managers, IT, etc. ), and how the change will be executed. Build a plan of what will be done by who and when, and get to work.

A clear plan and constant communication are critical. All resources involved in the change should have broad access to the plan, current status, and expected results. Milestones made should be celebrated and milestones missed must be made up for. If the plan isn’t working, change it and communicate the change. The objective is to achieve the expected result, not to work a bad plan and miss the mark.

Measure it!

The proof is in the pudding. What was the expected result of this change: shorter lead times, improved on time delivery, better manufacturing efficiency, lower inventory, increased ROI? What was it before the change, what impact did you expect from the change, and what impact did you get? If you’re not keeping score, you’re just practicing.

Don’t stop!

Your business is constantly changing – key operational strategies must change to keep up, and those changes must be implemented holistically throughout the organization to ensure success. You can’t stand still while the world around you is racing ahead; you have to keep moving to keep up.

Get Started!

Effective information management processes should be an integral part of every operational activity, not an afterthought. Properly designed processes produce all of the physical and informational outputs required to drive the organization in a single holistic flow. Improperly designed processes generate erratic outputs in an ill-designed web of complexity. Measurable operational variance is driven by improperly designed processes every day, so don’t just stand there and watch – get started!

Please email questions or comments to:
DavidEdwards@OperationsProfessionals.Com

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