What's out of whack?
Next, we go to work examining the processes and/or projects impacting the strategy. Generous use of data (six sigma methods), process mapping (lean disciplines -- value stream mapping), theory of constraints and factory physics guide the intervention at this point. Basically, we find the core conflict (see my article)
causing us to improperly manage our time-inventory-capacity buffers,
operating costs and bottleneck.
Variation not only comes from within
our operation, it also comes from the customer. Understanding the
sales process uncovers customer variation and operational variation because the
troubles in sales are often symptoms of problems inside the operation.
Once we determine what to change, we move to the next phase...
| What needs to be in place to change?
The
change always involves subordinating to the bottleneck and removing
variation. Rapid, lasting results are produced when we follow the Tipping Point Model to create and manage change. Along the way, a model for accountability
is introduced driven by one question, "What else can we do to reach our
objective?".
At this point, your people have "caught" the tools and
methods needed to start the improvement cycle over again. Proving once
again that: To grow profitability, you must grow your people.
A note on variation: Variation is everywhere. Your customers exhibit five kinds
of variation. It's our job to design our processes to comprehend
customer variation and not create any more of our own. Variation detracts from throughput (ability to generate revenue),
increases our operating costs and inflates our inventory (reducing
working capital). That's the physics and finance of variation. The
psychology of variation -- We control it, and yet we don't!
To get a feel for this, read my article, "Achieving Results" and play with the MS Excel spreadsheet, "The Four Partners". |