For all the doubters who think British Manufacturing is dead…

Thank to Top Gear for putting things into perspective..

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Why emerging from a recession may be bad news for some companies

http://www.reuters.com/article/2013/09/13/us-britain-zombies-idUSBRE98C04Q20130913

This article from Reuters shows why the upside from the recession may result in more businesses going to the wall.

The fact is that many businesses, size being no distinguisher, are hanging on having stripped everything to the bone but not done anything other than slash and burn under the guise of ‘efficiency’.

The bad news is, as we have said many times before, that people are working twice as hard but on inefficient (broken) processes, see our article here… http://wp.me/p35beS-j

Therefore, when there is an upturn in demand, they will struggle to cope and either not deliver, or hire extra staff at a premium to cover the ‘spike’.

The result of this will cashflow issues.  And as a result of that, the best will just scrape by, the worst will go bankrupt!

So what can you do? – well the start is to admit that there is room for improvement, find some metrics that really mean something to your business and measure them!  Then, simply work out how efficient (or not) you are against these metrics and get better!!

Some steps to take:

  • Work out what adds value and what you are doing for vanity.
  • Do the value adding stuff more effectively, faster (without adding people/processes or waste).
  • Work out what is common in what you do (most businesses have a roughly 80/20 split in what is common/uncommon, despite their protests to the contrary).
  • Find the most efficient way of doing this repetitively with minimum waste.
  • Look at eliminating the non-value adding stuff.

Easier said than done?  ABSOLUTELY!

Necessary?  ABSOLUTELY

Remember some of the big names no longer on the high street who were taken down by the recession?  Blockbuster, Woolworths, Habitat, they all ran out of money!  Make sure you don’t!

Then

  • Develop a culture of continuous improvement; small incremental (daily) changes which improve customer service and increase efficiency.

These small changes lead to game changers; bigger improvement which lead to real competitive advantage.

So do you have the courage to move away from slash and burn?

Call Lean 4 Business on 0845 108 3949 and see if we can help you.

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Five overriding principles of Lean.

 

There are FIVE overriding principles to Lean.

 

  • Identify Customers and Specify Value – The starting point of a Lean Journey is to recognise that only a small fraction of the total time and effort in any organisation actually adds value for the customer.   By defining Value for a specific product or service from the end customer’s perspective, all the non-value adding (NVA) activities – or waste – can be targeted for removal.

 

  • Identify (and map) the Value Stream – A Value Stream is the entire set of activities across all parts of the organisation involved in jointly delivering the product or service defined above.   This represents the end-to-end process that delivers the value to the customer.  This may go beyond the ‘factory gates’ to suppliers.

 

Once you understand what your customer wants the next step is to identify how you deliver it to them.

 

  • Create Flow by Eliminating Waste – When you first map the Value Stream you will find that only 5% of activities really add value, this may be up to 50% in a service environment.  But in any case, there is still room for improvement!!

Eliminating this waste ensures that your product or service “flows” to the customer without interruption (queuing), detour (unnecessary operations) or waiting.

 

  • Respond to Customer Pull – This is about understanding customer demand for your service and then creating a process which responds to it.  The aim is to produce only what the customer wants when the customer wants it (and with 100% quality, right first time (RFT). 

 

  • Pursue Perfection – Creating Flow and Pull starts with radically re-organising individual process steps, but the gains become truly significant as all steps link together.  Over time and with persistence, more and more layers of waste become visible and the process continues towards the theoretical end point of perfection, where every asset and every action adds 100% value for the end customer.

In following the five principles of Lean you will achieve a state where this is “business as usual”. 

 

Lean ensures that the business is drives towards an organisational strategy that constantly and consistently delivers value to the customer. 

 

This allows the organisation to maintain a high level of service (higher than its competitors) whilst being able to grow and flex with changing markets.

 

But it’s not overnight and does require alignment with and between all parts of the organisation.

Andy Dobson – M.D. Lean 4 Business:  “People think this ‘lean stuff’ is all about Manufacturing but in reality, the principles work anywhere!  Put quite simply, if the customer doesn’t value it, why do you do it? – I think I feel a blog post coming on!”

Image

 

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When a company says ‘our people are our greatest asset’ – ask them to show you their Asset Management Plan

At Lean 4 Business we do process, but as a result we also do people.

We don’t claim to be HR experts, but we know someone who is….  step forward Rose Green who runs her own employment relations consultancy, Rosemary Green Ltd.

Whilst our MD, Andy Dobson was speaking with Rose, she told him an interesting statistic;

“100% proof:  Good HR will boost your company profits” says report [1]

In terms of added value, the top third of firms in this research out-perform the bottom two thirds by £1,500 per worker per annum.  Increase your investment in HR by only 10%, so the argument goes, and you will achieve this financial improvement.  

Furthermore, the share price performance of the listed firms scoring the highest ratings in the “Company Performance Index” outperformed those at the bottom by 20%.

[1] ‘People and the Bottom Line’ by the IES and the Work Foundation  http://www.employment-studies.co.uk/pubs/summary.php?id=448

So we asked what were Rose’s top tips and here is a Top 10…

  1. Recruitment Strategy:  Managing your recruitment, selection and induction well will provide you with the right employees in the right place, at the right time, so look at resourcing strategically and build anticipated requirements into your business plan.    All the global players are focusing on talent management right now, NOT re-structuring.  Why?  Because in a recession there is an opportunity to hire the best skills at competitive rates – and when the upturn comes they will be one step ahead of their competitors in the scramble for sought-after skills.
  2. Job Descriptions:  A good job description should include the main purpose of the job, main tasks and the scope of the job.   From this you can then draw up a person specification – a profile of the skills and aptitudes considered essential and desirable in the jobholder.   These are the essential building blocks of a sound recruitment process.
  3. Assessment:  A range of ways of assessing candidates such as application forms, structured interviews, tests, assessment centres and role plays can be used depending on the nature of the job, the skills of the recruiter and the budget for recruitment.    Interviews alone are not usually a good enough guide to the suitability of candidates.
  4. Training:  If people involved in recruitment aren’t properly trained they may select unsuitable candidates. They may also discriminate unlawfully on the grounds of:  age; disability; gender identity; marriage and civil partnership; pregnancy and maternity; race; religion or belief; sex; and sexual orientation.  There is no limit to the amount that candidates can claim if they believe they have been unfairly treated at the recruitment stage so protect your business and make sure anyone involved in the recruitment process is trained and competent.
  5. Appraisal:  Make sure you are getting the best out of your people by regularly reviewing progress against S.M.A.R.T. goals.   Appraisals work best where there is a tailored competency framework which encourages your staff to use behaviours appropriate to your organisation and its brand values.  If your existing performance management / appraisal scheme has become tired and ineffective now is the time to review it.
  6. Engagement:  Look after your employees and help them achieve their career goals by ensuring they have personal development plans which provide them with opportunities for personal growth.   Why?  Motivated happy employees create the ideal customer experience for your client.   Encourage diversity to reflect the changing needs of your customers and clients.    Carry out regular employee surveys to find out what your employees really think. Support flexibility in the workplace; enabling employees to balance their working life with their private life will increase their levels of engagement and loyalty to your business.
  7. Performance Management:   Regular reviews mentioned above can help to improve employees’ effectiveness by identifying strengths and weaknesses and determining how their strengths can be best utilised and their weaknesses overcome. They can help to reveal problems which may be restricting employees’ progress and causing inefficient work practices.  If these problems are not resolved by support and training, or by changing work practices, the effect on the organisation can be toxic.  Grasp the nettle and manage poor performance promptly and effectively whilst minimising risk to the organisation by using fair and transparent processes carried out by properly trained managers.     Get external help early on in the process if you need it.
  8. Role of the Line Manager:   The line manager is the critical relationship when measuring levels of engagement in your business; make sure yours are trained, competent and manage their people properly.   They should carry out regular appraisals, hold regular team and individual meetings, manage poor performance as well as the good, and act as a role model for your business.  Once someone starts to supervise others, their technical competence is secondary to their ability to achieve great results through their people.
  9. Managing Change strategically:   A common path to growth for successful businesses is to acquire other businesses which align with or complement your own.   However reports in the financial press show that acquisitions often fail because of woolly concepts such as ‘culture’ or ‘people’.   It is baffling that organisations willing to spend millions continue to miss out on this key piece of the puzzle.   If you have plans for growth ensure that you understand the culture of your own organisation fully, before you take on the culture of another.  Make sure you carry out detailed due diligence on the people side as well as financial, and plan properly for cultural integration after the sale.
  10. And finally….. In case we haven’t emphasised it enough already, set aside some resources to invest in HR and you will reap the rewards.    Can you really afford to miss out on a 20% increase in your company’s  performance?

Rosemary Green is a human resources specialist with particular strengths in employment relations, performance management and structural change.  Testimonials and endorsements can be viewed on her LinkedIn profile http://www.linkedin.com/in/rosemarygreen and she can be contacted via her website www.rosemarygreen.com

 

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Good to hear

Lean 4 Business have some good news!!

We have found a company who are selling finished plastic components to China!!

Have a look at these guys… http://www.duralock.com

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David Lee Roth on Van Halen’s contribution to quality

This is a fantastic video of David Lee Roth explaining a very simple Poka Yoke technique involving M&Ms!

http://www.npr.org/blogs/therecord/2012/02/14/146880432/the-truth-about-van-halen-and-those-brown-m-ms

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Don’t confuse a racehorse with a nag!

Whеn уоu hear thе word “Lean” whаt dо уоu thіnk about?

Uѕuаllу people think about а piece оf steak with nо fat.

In business terms, the word Lean should mean operations with no waste, i.e. nо process performed which does not increase the value of the product or service.

  • Andy Dobson M.D.; My pet hate is hearing companies say ‘we go the extra mile’ – far better they work out what the correct distance is in the first place!

A quote heard recently “We can’t do all this business building that you want us to do, we are as Lean as we can be”.

We suggest that these businesses are not ‘Lean’ but rather have just cut heads and everyone is working harder on broken processes.

So don’t confuse a business which has slashed and burned in order to survive with a Lean Enterprise.

A truly Lean Enterprise will not make products to fill a warehouse where there is no demand in order to keep its staff “busy”.

As a perceived ‘solution’ some companies may swap people for automation, which can be a good thing.  However, if you automate a broken process you get something which breaks automatically.

Lean 4 Business specialise in getting organisations of all sizes to really address what adds value for the customer and to develop their systems to absolutely ensure that these needs are met.

Our systems can (and do) revolutionise cashflow; the life blood of businesses large & small.

But Lean should never be a short-term cost-cutting exercise, it is a mindset!  

Get it or get out, because if you don’t, your competitors will!

If any of this resonates with you then complete the form.  Or if you really can’t wait, call us on +44 (0)845 108 3949.

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A good article on getting things right for the right market..

http://www.mckinsey.com/insights/Innovation/Developing_winning_products_for_emerging_markets

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Which number represents your business best? 1, 4, 15, 60, 20

For any given industry or market, these numbers are an indicator of successfulness:-

1% of business owners will be very successful and therefore wealthy.

4% will be rich and doing well

15% will be getting there and financially fine

60% will be getting by

20% will be struggling or failing

So where does your business sit?  Statistically in the bottom 80%?  Possibly in the 15%?; either way if you’re swimming in the same pool as 80%+ of most businesses, that is where you are likely to stay.

What to do:

Identify the 1 in 4 businesses in your industry or sector and find out what they are doing differently, copy them!  They have found their niche, and so should you!

And with nearly 80% of businesses getting by or struggling, it shouldn’t be too difficult to stand out from the crowd!

  • Lean 4 Business help SMEs & mid-sized businesses to thrive no matter what sector they operate in
  • We help companies to systemise their businesses, reducing effort, and time whilst increasing customer service levels
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http://www.mckinsey.com/insights/mgi/research/productivity_competitiveness_and_growth/the_future_of_manufacturing

A good article by McKinsey showing how important manufacturing is to the state of the nation.

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