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Upcoming Events
February 9th 2012 07:30 am
- Making Data-Driven Choices
February 14th 2012 01:00 pm
- Optimizing Your Product Development Process
February 15th 2012 08:30 am
- Engaging Your Employees
February 16th 2012 12:30 pm
- Design for Manufacturability & Tour Pentair
February 21st 2012 01:00 pm
- Failure Mode and Effects Analysis (FMEA)
February 22nd 2012 01:00 pm
- Benefiting from Product Modularity
February 23rd 2012 08:00 am
- Maximizing Throughput Velocity with TOC
February 29th 2012 08:30 am
- Leading Down New Paths
February 29th 2012 08:30 am
- Persuasive Coaching & Influencing
March 1st 2012 01:00 pm
- Measuring the Right Things
Article Index
Increase Your Office Capacity: Eliminate Wasteful TransactionsArticle by: Kelley Buckentine Do you have more work to get through in your office than you have people to do it? Are departments frequently or even routinely missing deadlines? Are you subsidizing the workload with temporary help? Are vacations on hold until backlogs are eliminated? |
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Executing the Plan to Get Things DoneArticle by: Lynn Moline & Mike Braun News late this summer about Alliant Techsystem's role in building NASA's new space shuttle reminded me of one of my favorite stories about leadership's role in getting things done. |
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Book Review: Practical Lean AccountingArticle by: John Hehre In companies around the globe, people on the shop floor and in offices spend considerable time entering data into computers. Some information is entered more than once. |
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Why do you need to change? Author Unknown The answer is simple when you think about it; you need to change because you are changing. Think about the last time you went to the store, you knew what you were going to buy because you've purchased it many times before. |
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MN Economic ConditionArticle by: Dr. Ernest Goss For the month of August 2007, reported September 4, 2007. Minnesota's leading economic indicator from the monthly survey of supply managers points to growth in the months ahead. |
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Increase Your Office Capacity: Eliminate Wasteful Transactions |
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Do you have more work to get through in your office than you have people to do it? Are departments frequently or even routinely missing deadlines? Are you subsidizing the workload with temporary help? Are vacations on hold until backlogs are eliminated? As is the case with many of us, we put our focus on getting things done, reducing the piles, moving forward like a plowhorse with blinders. Do we ever say, "Stop, let's take a look at all the steps we are taking to get through this process?" There's a good chance there's some over processing (non-value-added steps) occurring. If we really want to stop this vicious cycle, we must invest some time in process review. We need to take a step back to understand all the steps we have in the current process and determine which are really necessary to continue. Over time, our standard work can become burdened with non-value-added steps as a result of error proofing (often referred to as CYA). For example, once in five years a report goes out with an error. To rectify this, ten steps are added to the process instantly. The correct way to address this would be to determine the root cause of the error in the first place. If we did it right for five years, what happened this one time? Let me share a real example with you. An accounting department was continuously missing the month end close deadline, invoices weren't getting out in a timely fashion, and DSO (days sales outstanding--dollars due us) was at 56 days. One day of DSO was equivalent to 11,000 dollars -- that's over a half million dollars of potential working capital! Also our temporary help had increased to a consistent 40 hours per week as well. Where to begin, enter USA--Understand, Simplify, Automate. UNDERSTAND To understand the current process, we created a map that provided a picture of the routine steps, delays, and hand-offs in the accounting process, and who performed which ones. We added timing across the top. Because many steps were gated by other things needing to happen first, we wanted to depict this in our map. We used colored yarn to show which steps were gated by other steps. As you can imagine, we ended up with a spider web! SIMPLIFY This picture of the process allowed the accounting team to easily identify or actually "see" the redundancy that could be eliminated immediately. Non-value-added steps, steps being done manually, and steps done automatically really jumped out. AUTOMATE Once the process was simplified, we could easily address automation. We knew we were not automating waste into the process since we were able to eliminate many of the non-value-added steps. The Results With USA in place, we were able to free up a combined 40 hours of two of the five accounting people's time, thereby allowing us to eliminate the temporary help expense completely. Month end close time was reduced by 30 percent. DSO has dropped by a significant percentage. "If we keep doing what we've always done, we'll keep getting what we've always got." Don't be afraid to stop the craziness, take a step back, and update those process steps.
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Executing the Plan to Get Things Done |
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News late this summer about Alliant Techsystem's role in building NASA's new space shuttle reminded me of one of my favorite stories about leadership's role in getting things done. The story has to do with the crisis aboard Apollo 13 in 1970, when an explosion crippled the spacecraft's oxygen and electrical systems. (The incident inspired the 1995 hit movie by the same name.) Ground control operations chief Gene Kranz had a vision of the crew returning safely. But as songwriter Stephen Sondheim once said, "Everything depends on execution; just having a vision is no solution." So Kranz quickly began to execute his vision. Assembling his highly competent crew, he first explained what was known about the situation, how much oxygen the crew needed, and how few hours remained to come up with a way to provide it. Next, he displayed a boxful of materials that represented every object the crew on board had at their disposal to jury rig an emergency oxygen system, from pliers to duct tape to empty canisters. This, he told his people, was everything they had to work with to save the astronauts; their job was to figure out how the crew in orbit could use those items to modify the oxygen system before it was too late. Of course, the technicians delivered and the astronauts returned safely. What Kranz did was classic great leadership, what every good executive does to assure that things get done. He started by delivering on what is arguably the leader's most important job: picking the right people. Next, he had a vision but he also had a plan for executing it. The plan included a critically important goal, to bring the crew back alive, and metrics like the required cycle time and the amount of oxygen needed. He also provided all the information and resources available and explained what was not available (the scope and boundaries of the job.) While we don't know exactly what he did next, we can assume that he stayed close to the project team, offering "candid dialogue," the encouragement, challenging questions, and feedback that Larry Bossidy and Ram Charan call, in their book, Execution,/i>, "the ammo of execution." Not all managers succeed at leading this way; that's why things that need to happen don't happen in many companies. Getting things done requires leaders to walk a fine line between micromanaging and abdicating authority, to be present and alert without calling all of the shots. It's a tough job, but the rewards are clear.
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Book Review: Practical Lean Accounting |
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In companies around the globe, people on the shop floor and in offices spend considerable time entering data into computers. Some information is entered more than once. Most, if not all of these transactions are wasteful. Granted, some transactions are required by current systems or by rules and regulations. At one time in the not so distant past, these transactions were an integral part of computer systems. These systems were originally intended to maintain control over large inventories, long lead times, and complex manufacturing processes. As Lean manufacturing becomes reality, however, inventories and lead times shrink to a fraction of their former levels, and control over shop floor processes is accomplished with a variety of simple and straightforward tools, most of which are striking for their lack of reliance on computer transactions. Yet in many cases the transactions and old control systems still linger. The book Practical Lean Accounting by Brian Maskell and Bruce Baggaley (New York, New York, Productivity Press, 2004) provides a clear path for streamlining accounting and control systems without sacrificing control. This path parallels the activities taken to implement Lean manufacturing. First, the book provides extensive discussions about how traditional financial measurement and costing systems often obscure the true benefits of Lean manufacturing. For example, as excess inventory is used up, existing overhead is spread across fewer production hours which reduces profitability. Naturally, the book provides detailed descriptions of alternative financial and costing systems. Next, several chapters present new status and performance measurements. Issues with existing measures are also discussed. The first measures recommended are straightforward and can be implemented quickly. Examples include the "Day-by-Hour Report," which provides immediate feedback on production rate, and the "First-Time-Through Report," which measures the percentage of product made correctly the first time. In later chapters more complex measurements are introduced that are appropriate once the Lean culture is fully established throughout the organization. The authors recommend a different approach to collecting the data associated with tracking product costs that takes advantage of the simplification that Lean manufacturing provides. The primary focus is on the cost of the overall value stream rather than individual activities associated with each operation performed on each part. The broader perspective requires fewer transactions and provides a more realistic view of actual costs. Finally, there are a number of chapters aimed at eliminating unnecessary and wasteful transactions once alternative controls are in place. The book also features a diagnostic tool designed to suggest which chapters are most appropriate for the company's current situation. This tool, along with many examples and forms, are provided on a CD included with the book. The authors Maskell and Baggeley are recognized as experts in Lean accounting. The book is a comprehensive text that covers essential areas to consider while improving traditional systems. The book is designed to be used as topics become relevant along a company's Lean journey. This book would be an excellent addition to every Lean library and required reading for all who are responsible for supporting and using accounting systems. Hear from three manufacturing companies on eliminating wasteful transactions and applying lean principles to accounting functions by attending the next Manufacturers Alliance Monthly Educational Program. Learn More
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Why do you need to change? |
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The answer is simple when you think about it; you need to change because you are changing. Think about the last time you went to the store, you knew what you were going to buy because you've purchased it many times before. When you get there, you find it and are just about to head for the check out when another product catches your eye. You take the time to discover it has a better perceived value than what you've been buying. It's at that moment, you put down what you've purchased before and decide to try something new. It should sound familiar because it is happening all the time, you've just added to what is known as a market shift. The company that made the product you used to purchase will now have to focus on that product line to avoid obsolescence. The company that made the product you are now purchasing will have to ramp up and hope its product has a long life span. It is not a matter of "if", it is a matter of "when". How will you respond to these continuous changes? Companies that don't understand market shift and Lean thinking prepare themselves by buying pieces of dedicated equipment, have rigid "oversized" material handling, align themselves with poor supply channels and other such paradigms to where their only answer to change is "I can't". It is with this mindset the business itself will pay the ultimate price of obsolescence.  Companies that understand market shift and Lean thinking prepare themselves by waste elimination and flexible resources. Something is always being improved, even if it looks "lean". Their manufacturing has very few large pieces of dedicated equipment. They are likely looking at making their own equipment to some degree so when the change comes, they can reconfigure the components into the next generation. Their material handling tools are "right sized" and mobile. Their vendor selection process is fairly detailed, in some cases, more detailed than an employee selection process. The ultimate would be to establish a partnership between the two companies so that both can achieve a win-win. Those who are truly successful at change should be able to change, as fast as us and our buying habits. Take the test, what are you buying today that you didn't 5 years ago?
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MN Economic Condition |
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For the month of August 2007, reported September 4, 2007. Minnesota's leading economic indicator from the monthly survey of supply managers points to growth in the months ahead. The Minnesota Business Conditions Index advanced to 56.4 from to 55.5 in July. Components of the overall index for August were new orders at 58.3, production at 60.4, delivery lead time at 54.2, inventories at 60.4, and employment at 47.9. "Minnesota's growth continues at a modest pace and slightly above the region. Nondurable manufacturers, including food-producers, detailed much stronger business activity for August than durable-goods-producers. Telecommunications firms in the state experienced a weak August," said Goss.
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Kelley Buckentine is a dynamic lean leader, energetic trainer, and is certified as a 6 Sigma green belt with experience on both sides of the fence: operations and marketing. She may be reached at kelley.buckentine@gsnai.com