Rapid profit growth platform for manufacturing and supply chain
Do you dream of:
• Increasing profit by up to 20% within six months
• Improving prospects for future success and create peace of mind for stakeholders
• Engaging workers and making recruiting top quality staff easy
• An end to firefighting
• Achieving trust and alignment around a shared vision.
• Freeing up management time and attention to deliver superior strategy
We know, this sounds too good to be true, but this is what many of our clients have done. It is possible because we identify the few critical leverage points first and then focus technology and improvement efforts around these. We unshackle employees and managers to deliver outstanding results to customers who reciprocate in increasing company profit.
Managerial span of attention
In most businesses, the same management team that is fighting the fires and trying to manage the day to day operations, is the team that is responsible for formulating and executing the strategy. And in most businesses, they are also the people that work the most extended hours and have the longest queues of outstanding tasks and decisions that everyone else is waiting for. With other words, they are the constraints – in both the operational and the strategic value streams.
In trying to satisfy customer needs, many organisations have an excessive focus on cost reduction. Trying to operate with just enough of everything causes stop-start flow and not only decreases efficiency, due date performance and quality but also overloads managerial span of attention and increase the cost. Dissatisfied clients then overload the sales department with queries, and instead of selling and growing markets, they are sucked into non value-adding work.
If you would like a private discussion on how these ideas can make your business more profitable, book a free 30 minute session.
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Eli Goldratt, the author of the Goal and founder of the Theory of constraints movement, stated that the goal of a business is to “make more money now and into the future”
Obstacles to making more money now and in the future
The growth of the internet created an environment where our potential clients and competitors have knowledge of prices available everywhere and the logistics to deliver. We have to compete with entities everywhere and also with industries that we did not see as direct competitors before. This is the world of VUCA: volatile, unstable, complex and ambiguous. Today we are making money, and tomorrow events outside of our control pushes us into losses.
Managers and employees are overwhelmed by a deluge of information and firefighting from continuous pressure on profitability. In this stressed environment, it becomes difficult to decide what is happening, how to align the organisation and what to do. In trying to keep up profitability, many organisations implement new technology (unsuccessfully in most cases), impose more controls and bureaucracy and cut costs. This crushes talent, innovation and teamwork so that organisations are battling to adjust to change.
The business environment simplified
The following picture is a representation of the different parts of the business managers need to keep in balance.
It would be easier to keep and grow our clientele if we could provide them with services and goods that are Free, Perfect and available Now. We cannot reach these demands, but we do try to get as close as possible. We structure our operations and logistics to be efficient: improve on cost, quality, due date performance and availability.
Strategically we want to operate in the best markets with the best products for our chosen clients, using suitable technology. Marketing and sales need to work together to structure offers that are unrefuseable to the market and deliver profit to the company, now and into the future.
And to keep these parts in balance, we need managers and employees to sense what is happening outside, adjust the strategy and operations to cope with this. For this, we need trust and cooperation, in other words, engaged workers.
To make money now and in the future, we need to keep the Business Ecology Triangle balanced- this is the responsibility of management. But management in most organisations are constrained in their ability to do this.
Rapid Profit Growth Platform
The most powerful management efforts focus on changing the accepted best practice management paradigms. John Seddon says “Forget your people. Real leaders act on the system. Real leaders redesign the system to meet demand. When leaders act on the system, customers cheer, costs fall, and the culture change comes free.”
The Rapid Profit Growth Platform makes the overall goal of the system clear, it identifies and communicates the role of each person and department in achieving that (by getting work to flow faster through bottleneck areas) and changes the management paradigm to one where we manage the overall system for greatest effectiveness and efficiency. The increased clarity of purpose, advance warning of problems, alignment and trust, enables production flow to increase by 20-30%, using the same resources. This enables employees and managers to not only decrease lead time and increase capacity but also to ensure that the right product is available at the right time. Management is now in a position to make offers to the market at higher margin or to increase volume.
The Rapid Profit Growth Platform creates a platform where managers and employees can safely practice the new way of managing, without getting rid of the beneficial characteristics of Command and Control and Hierarchy. It reduces the levers to control to the absolute minimum and unshackles employees to do what needs to be done for the good of the whole. In this manner, the information overload that impedes many management teams is substantially reduced. It creates an environment where employees have a purpose, can achieve mastery and have more autonomy.
We enable our clients to deliver these results by helping them to:
• Align Sales/Marketing and Operations to reliably deliver on offers to the market which competitors are reluctant to match.
• Create a Productivity Platform to drive operational focus, enable innovation and enable the cultural change required to maintain competitive advantage.
• Create the engagement and capability to adapt and thrive in a VUCA (volatile uncertain, complex, ambiguous) environment.
Our Guarantee: Our work has proven valuable to companies around the world. We are so confident that you will achieve the results promised that we back our work with a performance-based component.
Modek Polycarbonate Roof Sheeting- Sales grew in the face of entry by an aggressive international competitor. Before the intervention sales had fallen to 30% of that achieved for the corresponding period the previous year. After the intervention sales recovered within two months and increased by 20% for the year. The TOC for Operations intervention enabled much better reliability (MTO) and availability (MTA) of product. With these production changes Availability (Make to availability) and Reliability ( Make to order) could be promised to the market.
Modek Polyester Roof Sheeting- This business unit was a year away from closure. It had lost 20% of its sales every year for five years in a row. Given the strategic value of the business the MD allowed one last effort at turnaround.
The Manufacturing Differently intervention was used and the unit turned around within six months. It continued growing at 20% sales a year for three years after.
Some of our beliefs
- If customers had their way, they would want their goods to be Free, Perfect and to have it Now.
In most cases it is not the sales person’s fault when a client is lost. The problem needs to be found in the production and/or logistics department and solved there.
- The Supply Chain/Operations intervention starts with determining the customer’s significant need and then makes sure that production and supply chain delivers exactly that.
- The TOC for Operations intervention helps with getting the cost down and quality up while the supply chain solution enables customers to have their goods now, with a minimum of stock and no stock-outs. Since the items that sell best tend to stock out sales are also improved by having these items available.
- By satisfying the customer, the sales department can be taken out of firefighting mode and are enabled to focus on selling and finding new markets.
- It is important to prevent sales from selling more than 80% of what production can deliver at any moment, protective capacity must be maintained.