P66|TREAT YOUR BUSINESS AS YOUR OWN

It is really interesting when you quote this statement. Roughly everybody -conceptually speaking- immediately agree with the concept putting himself as example.
At time it is surprising how people now about what is out of her/his scope but it is unclear about what exactly is appointed to do.
One of the most curious situation I never faced was when trying to assess an order2cash process, I accidentally realise about the plan B, when systems fail.
On that case, functional people simply stay doing other activities because it was out of their rationale to type manually. It was easiest to stay paying time on lateral activities, rather than type manually the customer orders (obviously in function of the volume we are talking about, obviously), and request to the IT an action to eliminate the corrupted order entry file, rather than release the record stacked.

P065|SOME FRESH REFERENCE TO A SUMMIT

A couple of weeks ago I attended an IBP summit where multiple “best-in-class” companies (including where I am working for) shared their implementation experiences across multiple different industries and countries.

Quite interestingly the most noticeable common pattern was, most of them identified three big areas to cover: PEOPLE, TOOLS and PROCESSES.

At the same time, all were aligned on pointing as the most challenging: PEOPLE. IBP is pretty much a business framework generally employed to get a management step change (recognising it’s a continuous improvement framework, not disruptive, as most of companies discovered once taken the decision to go ahead!).

Processes, as we have explained a few posts ealier, aren’t too difficult, at much you guide the design (creating the templates) you accelerate the IBP learning curve adherence, but time process resistance increases as well.

P062| Bad shelf replenishment

Recently I have started to go shopping alternatively to two shops of a same retailer (one on my way from work to home, and the second nearby home). Both are same size, but key products of my shopping bag, bought on both have different remaining shelf life. In average the home nearby 1/2 days, while the other, typically 3/4.

Probably I’m wrong by I have some theories:

• GM has a different replenishment policy (she/he is buying bigger quantities)….prices are not different (and promotions are ON at the same time slot)!
• Shop with shorter shelf life has a higher rotation, and because the hub is aware usually sends shorter shelf life products
• …

P061| What is a 5S to Order?

From I arrived UK (2010) I noted companies request quite often Master Black Belt/ or simply Black Belt as entry (must) requirements, specifically within some industries, but commonly within the Manufacturing bit.

Having said that, i don’t understand why (at least in two companies) seniors outsource 5S to companies which mainly arrange the event on a mores or less 6-Sigma professional manner.

That company, which receives the assignment, outsources to tier companies some break down bits of that service (ie. machines are painted by specific people, floor are also resined by another tier…).

On my view, probably wrong, but always I’m talking about based on my personal experience The main beauty it’s the integration asset that business gets when it’s led properly, working together shop-floor with office colleagues, being involved manager, heads and directors (some brave companies force the MD and of course our Sales/ Marketing peers). It’s a tough event, typically a week length but the value you get it’s amazingly powerful. It appears strong links beyond any formal relation (you share meals, strong effort, tiredness…) and usually it appears something called “accountability”. Specifically from the people related to the section submitted to the 5S event, and next time she/he left the shift she/ he will be sure the job appearance is left in best visual conditions that she/ he would like to find it.

P058| WHY LEADERS FEAR THE TURNAROUND CONCEPT?

I’m not totally sure if this is true, but my exposure to these processes bring me to the point “turnaround” is a major word. As usual, I feel someone will not be able to change until she/he realises she/he has a problem.

Turnaround has good meanings as well. It means your business has an opportunity (perhaps the latest!) and as senior you have the duty to fight for it.

My usual personal manner to approach these projects is:

1. Identify the actual number (how is nowadays performing the business, site, region…intended to be submitted to this process)
2. Identify the expected number (typically provided by the shareholder)
3. Bridge the gap.
4. Big attention to working capital
5. …
6. 

P056| WHY ARE SUPPLY CHAIN RESPONSIBLES STRUGGLING WITH WORKING CAPITAL ACCOUNTABILITY?

Interesting question, doesn’t it? Alongside my career I have found often multiple supply chain responsible with little sensitivity around working capital improvement.

It’s wrongly understood working capital is a Financial responsibility when they are “journalist” about this concept, and most of times they have to deal with consequences of a bad working capital management.

High level, I will start sharing the net working capital basic formula: current (assets-liabilities). On assets (or gross working capital), we have those assets that are liquid or easily converted to cash within 1 year (accounts receivable, prepaid expenses, and inventory). On liabilities, we have those to be paid within 1 year (accounts payable, wages, dividends, taxes…)

As you might figure out, the accounts payable/ receivables are easily allocable under the Supply Chain function/ accountability, as inventories are.

P055| THE VIRTUOUS CIRCLE

In this crisis environment most of business are concentrated on killing cost, with no discrimination. Is that wise?

Most of times when businesses are not performing the expected top-down plan, as planned, they immediately look back to supply areas are main generators of this situation. For sure supply areas (understood as anything upstream the sale event) can contribute more, ALWAYS!

However businesses are missing some points. Let me come back again to my recurrent demand subject. Businesses must look after their portfolio and particularly the product life cycle.

P054| THE WAREHOUSE MANAGER POWER

I don’t know who said that because I simply heard from someone once: “give a giant warehouse to a manager who generally struggles to survive on an small warehouse environment and she/ he will try to fill up”.

Honestly I see here the lean principles. As tight as you professionally run your work field, more lean you become. But it’s harder when the limits are wider.

For similar reasons, I guess, if you can easily manage with 3 forklift trucks why not 6, rather than 3 with three spare batteries to replace them when they’re exhausted? the reason is typically the person whom the whs manager usually report this decision doesn’t have proper logistic background and usually trust on the fair advice provided.

Other reason that i can’t get to understand it’s why is such difficult to push x-training on logistics environments. Usually, just a few operators are able to drive properly the big forklift (training, skills set, safety…). This programs, as I said on earlier posts, should be professionally managed since day 1, no when the situation overwhelms.

P053| TAKE A LOOK WITHIN THE ORDER TO CASH CYCLE

Well I wouldn’t like to insist too much again on this process. However, lately I have been exposed on course of some one-off assignment to the same symptomatology. Order cycle takes too long because business processes were wrongly set up.

Let me quickly revisit the O2C (order to cash) process, from one of most ERP business process oriented, I know: Oracle e-Business Suite

P051| ERP SUCCESS CRITERIA

According big ERP firms, as Infosys these may be the three main criteria to measure a successful ERP implementation:

• System adoption and continued use by end-users
• Within-budget capital expenses
• Overall business value delivered

My point is radically opposite. If they are the success criteria business risk to lose any improvement opportunity. Mega corporations are dealing with huge ERP upgrades with poor results in terms of real benefits. I mean, any implementation must provide business a different manner to fulfil processes (potentially leaner, otherwise I struggle to believe on any real ROI -return of investment).

At measure implementation passes by a high customization level, this project loses those opportunities earlier mentioned. Any ERP (I have some opinion, after having led multiple implementation/ roll-outs across EU countries, some with present support and other with off-shore/ remote support, having worked with Top 3: SAP, Oracle eBS and MS-Dynamics