Thursday, 24 May 2018

Typical symptoms of poor management practices in (SME) Organizations?

Whether small, emerging medium  or large size organization, most of them have common  macro-level challenges like

1. Improving profitability
2. Sustaining the growth & Future fit
3. People Engagement towards growth

However, small and emerging organizations have other typical challenges apart from the macro level challenges. Those challenges arise due to lack of proper management practices and business / functional processes.

Let us list down some of the symptoms of poor management practices or processes that result in mediocre performance or survival challenges.

1. Struggle to meet the given delivery schedule on time and qty. This will be regular scenario every month
2. There is no structured planning on customer's orders. Most of the time, serving the customer based on the urgency of the customer on a daily / weekly basis.'
3. One of the complaints or frequently listened word (FLW) is " our planning person is not effective, or are planning is very difficult in our industries.
3. Inventory (RM+WIP+FG) accounts for more than a monthly requirement, still manufacturing lines come to a halt for want of material
4. Rework / segregation is part of daily activities  and those  are considered as  essential activities for delivery
5. For any quality problems, quality executive or quality manager  is expected to own and solve it
6. Quality is ensured through Inspection 
7. Making the operators to run the machines. Checking the quality aspects and taking actions are considered as idealistic and impossible
8.A permanent imbalance between feeder shop and final assy line. Neither aware of the imbalance nor the actions to improve
9. Typically the first week would be low production achievement and gradually increased to last week. During month end, all are busy.
10. Sometimes, previous month billing execution would continue even after first 5~7 days of the month and this continues forever
11.No clarity and communication about monthly billing/production target and actual at any point of date. That information restricted to the senior management team only
12 No performance drive on improving business / functional deliverables.
13.No structured reviews mechanism between the business head and the next level
14 Functionally I am right; but as an organization, we fail mentality across the level 
15 No Monthly business performance review by the business head
16 ERP system is either tried  or hold  for correction
17.Thinking that  ERP system will solve all our today's communication issues
18 No structured  HR policy on recruitment and compensation
19. New product development is given least priority. No structured cross-functional team reviews
20. No time for a celebration of small success and always  firefighting mode to serve the customer

The point is to relook at your organizational symptoms and work on eliminating or reducing the intense to prosper!

Thursday, 17 May 2018

Why need to elevate the operator's role in SME organization?

In the entire value chain, most of the value addition happens in shopfloor while converting the input into output. Mostly value addition is being done by the operators. 

Some of the common complaints or problems faced by the management team are

1. Difficult to source the skilled operator 
2. Cost of operators is increasing 
3. Operators not  staying for long 
4. Rejections/reworks are more and being identified by the Quality inspectors before despatch

Even though skill gap, supply vs. demand of skilled people are external to the organization, some of the factors are being governed by the organization, and if the organization focus more on those factors, the above problems can be managed well.

some of the problems like cost/quality issues/retention are all influenced by the internal environment, culture and the management related.

For example, driving efficiency and bringing down the cost of engaging operators is management driven. One of the pitfalls we observe in most of the organization is the defining the roles and responsibility of the operator from day one. Operators are being recruited as the person responsible for operating the equipment only. He is expected only to perform loading and unloading the components. Quality of the output is not expected out of him, and there are other agencies or inspectors are in charge of the quality control of the product produced by the operators. 

Also, the operators are not encouraged to keep the workplace right regarding housekeeping and checking some of the basic equipment parameters on a daily basis.

A shift is required to position the operators as the complete in charge of production output as per standard both on quality and efficiency. He has to be trained and instructed from day 1 as complete in charge of his workplace.

Benefits of redefining or elevating the role of the operator:

1. Engagement and ownership increase as human beings expect more challenges, responsibilities, and appreciation.
2. It is easy to improve the quality when the issues are detected and corrected at SOURCE and by the PRODUCER than by any other person, at the remote location and time period.
3.when the efficiency increases, cost of operation comes down

The point is to elevate the role of operators to reap the benefit of reducing the operations cost and increasing the engagement!

Wednesday, 9 May 2018

which is one performance measure (KPI) indicating your organizational strength?

As there are many methodologies and key performance metrics (KPI)  to assess the organization strength. In fact, no one measure does not indicate the complete picture of the organization.

However, as a business head, if you want to gauge quickly about your organizational capability, people working culture, communication process and likely future prospects of the business, one key performance indicator will show you the strength of the organization.

That is " Delivery Actualization"  or "Customer order fulfillment on time."

Given the order position, if your organization meets  "Delivery commitment 100 % every time and that too on time, then we can presume, the organization is built on people and process strength.

why we insist this measure is dipstick measurement to assess the organization strength :

Irrespective of each functional efficiency, only when there is a cohesive team, business process and daily management practices, and capability, then the organization can deliver on time with 100 % actualization. This KPI  indirectly measures the organizational strength.

Relook at your organizational performance on order fulfillment for last one year, and you can relatively understand your organization's strength!

Thursday, 26 April 2018

Changeover time loss reduction is compelling need for organization- why?

When the manufacturing facility produces a different component of same of the different family, it needs time between one component to another component change in the equipment or facility. The time required between two components production is called change over time or setting time.

To be specific on the definition of changeover or setup time is the time elapsed between last good piece of component  A to the first good piece of component B.It comprises Preparation Time before setting + Actual setting in the equipment + Quality proving the new component as per specification.

Why is there a compelling need for changeover time loss reduction initiatives?

In external socio-environment, there had been a shift in customer's preference, lifestyle, affordability, and expectation of spot delivery or short lead time and so on. This change in external leads to the following challenges to the business internally.

1. Frequent new product launches and reduced shelf life  of the product
2. Increase in variety with moderate/high volume
3. Meeting delivery commitment  

How the external scenario affects the organization capability on changeover time loss reduction?

Unlike it is justifiable to have dedicated equipment/facilities, the organization has to produce all varieties of the same family group in the same equipment/ facilities. If the changeover time is high, it will affect the organization in the following ways

1.Utilization loss to the equipment/facilities
2.Loss of capacity
3.Increase in manufacturing cost as all the losses would be accounted as manufacturing overheads only
4.o counter high changeover, if the organization goes for higher lot sizes, it will affect regarding higher WIP / FG inventories, possible rejections/ rework/planning cumbersome and other communication issues.

on the contrary, if the organization is continuously working on reducing changeover or setup time loss, it will  help

1. Faster delivery leads to customer 's acceptance and possible sales volume growth
2. Better manufacturing cost, in turn, product price
3. Quality improvements due to coordinated and standardized work during setting 
4. Improves the morale of the working people as they are mostly affected due to unorganized changeover process.
5 Short changeover time brings flexibility to the organization to produce variety and at the same time, not losing the utilization and people efficiency loss.

Going forward, those organization who are specialized in variety handling with minimal production cost would be fittest to survival.

One of the competitive advantage for the organization is that developing the capability to reduce the changeover continuously and increase the flexibility in meeting the customer's requirement

Tuesday, 17 April 2018

Why is monthly business(KPI's) review important ?

Monthly business key performance indicators (KPI's) review is meant to review previous month business and functional performance against the target and discuss, arrive the action plan to improve the business performance in the subsequent month.

Most of the SME business heads are not consistently conducting the monthly business performance indicators status review.

Some of the beliefs which hold business head not to review consistently

1.As I am spending full time here, I know  the P&L trend, and it is not required to conduct reviews with the team
2.The team does not have the time, or no people are capable of collecting and organizing all the data
3.Why should we discuss all the information along with the team?
4.Meetings are going to be time wasters as nobody is going to give solutions.

Emerging and a smart organization has the practices of setting the business and functional key performance indicators (KPI's) every year beginning and use to review the progress or status of each KPI along with the team every month before 10th of the month.

Advantages of reviewing KPI's status along with the team

1.The team is aware of the goal set and status at any point in time 
2.The team becomes accountable for results as they are being questioned on the performance every month
3.Ownership and engagement improves as data is being shared and communicated to all
4.Helps the organization to improve the performance in the subsequent month. In the absence of monthly KPI reviews, response time would become less (P-D-C-A cycle)
5.When the monthly reviews become a culture, all the functions are keen on the data accuracy, timely sharing the data.In the absence of monthly routine reviews, data capturing and analysis itself a major task for the business head

Relook at your business practices and beliefs on monthly business and functional KPI's and initiate performance-based culture in your organization !!

Tuesday, 10 April 2018

My thought process on initiating lean manufacturing in small and emerging organizations

         Lean is achieving “more with less.” That is, making more production with

given resources or increased efficiency or achieving with less cost.

      Lean manufacturing system can be understood by relating to a human body. If the person is lean means general understanding is that he is free from unnecessary FAT in his body, hence free from unnecessary side effects like BP, Pain in joints, laziness, and the person is perceived as healthy, more flexible, and active.The same way if the organization is lean means, it is free from unnecessary fats like high inventory, high rejection, high breakdowns or line stoppages factors, etc  which leads to more flexible in delivery, less lead time , low cost of manufacturing and free flow of communication ( This is the way I introduce lean to new forums in my consulting workshop).Hence making the organization ( across all functions), extended supply chain system, any functional units (like machining, assembly, painting) need to be lean for increased efficiency, low cost, quality at first time and reduced lead time.

Lean is not a tool for cost reduction or cutting manpower or increasing efficiency alone, it is a culture building process or way of thinking and running a day to day business activities.When the lean is understood only as an application of tools like 5S, SMED, Visual management, poke yoke, it results in short-term impact in a particular cell or unit on a short time basis. It becomes difficult to sustain. Most of the organizations are keen on learning the tool and applying without understanding the big picture of linking with business objectives or culture building process.

Any lean initiative must start from CEO or head of the organization and more importantly, it has to be linked to the business need or goal.Moreover, lean should not be driven as separate initiative without linking with the business / functional objectives.When we drive as a separate initiative under one lean champion, lean efforts will be continuing as long as the champion is intense and driving as long as the entire team is undergoing a lean period in production or sales. Once demand /volumes pick up, the lean initiative takes back seat as it is perceived as EXTRA work for the organization.That is the reasons a few organizations are not taking the lean-to next level from grand inauguration ceremony and except few improvements on housekeeping and visual systems

In my consulting role, I am insisting lean implementation when there is full conviction from CEO, and there is a compelling need for driving efficiency, improving the bottlenecks for business growth and management agrees to work with us minimum six months to 2 years.
In some organizations, we failed to bring the momentum when the leadership team looks at lean initiatives as a quick remedy for their inherent problems.

To summarise, key ingredients I used in all lean initiatives are
  1. Form cross-functional team
  2. Involve CEO in reviews
  3. Develop Business / Functional KPI's which are important for business / CEO to drive
  4. Educate the team to see the waste in the system through VSM workshop or interviewing process
  5. Make priority list along with the team to focus on waste elimination
  6. For the identified waste, apply suitable lean tools starting from housekeeping (2S), Visual management, SMED, Best Maintenance practices, Daily work management like tracking hourly, daily output/quality issue tracking and reporting
  7. Create forums for review meetings with operating team, cross-functional meeting among heads and weekly review meeting with CEO or business head
  8. Review, Update KPI and tracking 
Becoming a lean organization is not a one-time event, it is a continuous journey.

Monday, 9 April 2018

Why sustenance is important in workplace?

In most of the organizations, we can hear one common phrase “we have already implemented this initiative, but not continued or this will not work here”

Why do people come to conclusion as “no initiative will work in their workplace?". The reason is lack of consistency in implementation. 

In today’s internet world, there is not much ignorance of knowledge and know-how; it is only lack of consistency in implementation.

How this inconsistency will affect individual & Team?

When you implement some initiatives, not consistently follow it and eventually drop it, you are giving a subconscious message to yourself and team that you are not sensitive to results or incapable of execution. This inconsistency will impact the confidence of the leader at an individual level and encourage mediocre performance at the team level. The next time when you think of new initiative, old memory reinforces you about failure or low confidence pulls you down from taking action.The root cause for all consequence is inconsistency in implementation.

 So, in personal and organizational level, if you take any initiative, be sure that you are consistent in your implementation even though you are relatively slow in taking a decision. Ultimately your consistent actions push up your confidence and your consistent actions inspire others to follow. This is one of the traits of leadership, i.e. consistency in thinking; talking and doing.You are meant to be a leader for others!!!!