You may have heard of SAP software. It’s a software system used by thousands of medium sized and big businesses all over the world. The purpose of the system is to join the whole company together and let hundreds and often thousands of workers to record, share and recall information about the physical and financial activities of the organisation. Successful enterprises are lead by smart individuals who comprehend the strategic value of this category of software, such as how it can give them a picture of why difficulties are happening inside their company or where there might be opportunity for refinements.
This type of software application is often known as ERP. It is very sophisticated, very expensive and can take along time to implement. A deployment of ERP software is a significant investment but this doesn’t stop big firms procuring these systems.
Until recently software similar to this was not feasible or affordable for tiny enterprises. As a result small companies have not been aware of the substantial benefits that ERP systems can deliver. Small enterprises have been hoodwinked by predatory manufacturers like Sage Software and Intuit that small business accounting software is the answer. These systems most often have no features to enable their owners to connect the whole organisation or perform common tasks such as customer relationship management.
It is for this reason that small business ERP vendors similar to Salesorder.com have started to make great progress in the market. They provide on demand software which includes all of the major functionality a small firm needs at an affordable price. What is even more fascinating is these platforms are a cinch to operate and can be delpoyed rapidly.
Today ERP applications are no longer the privilege of big firms.
A Harvard Business Review article “Why Few Executives are Skillful Managers” made the following points: “despite the billions of dollars, euros, and yen invested in coaching and management development, remarkably few executives can be regarded as skillful managers.” I figure that the majority of top level managers with responsibility for large teams either do not possess the required skillsets — or they just don’t practice what they preach. Why? There are three main reasons. First, pressure to deliver results with too little time make it nearly impossible for business leaders to consider consequnese, reflect and apply the best action. Secondly, budget constraints can limit support and follow-through of even the best intentions. Finally, behavioral change is difficult — it’s all too easy for a development plan to slip to the bottom of the to-do list.” The article suggested the following development areas: delegation, management distance, visibility, work-life balance, and continuous learning and reflection.
Consider this… I do not disagree with the issue of executives making skillful managers; however, I have some other thoughts on what should be done to address the problem. Many Executives would do a better job if they adopted the philosophy of the 3 Rs of business; i.e., everyone doing the Right things, and doing them Right, at the Right time. This management system needs to be different than the establishment of somewhat arbitrary goals throughout the organization for departments without a structure plan for determining what will be done differently to determine how the goals are to be met. Additionally, this management system must address the implementation of strategies that lead to targeted efforts that are in line with the financial needs of the company.
With the linked described system, Executives would now have a structured framework for them to operate within that cannot be gamed. Lean Six Sigma consulting and/or coaching would provide more of a structure for what they should be doing to be successful operating their businesses within this infrastructure.
Organizations can have many problems because they are measuring the wrong things, which can lead to unbeneficial or detrimental behaviors. Almost every organization’s measurement and improvement systems need to be improved. Organizations need to avoid the basic red-yellow-green balanced scorecard measures, which, can lead to significant firefighting that does not benefit the enterprise as a whole.
To create a valid process capability statement data needs to be from a stable or “in control” process. Let’s have a sampling process so that if mulitple persons examine the same process their conclusions should be the same even if the process is considered “not in control”. With this statement, reference is made to how they sample from the process, not a chance occurrence. “Predictable” is often easier to understand than “in control”.
It is better to use ppm as a response for process capability and process performance indices, rather than Cp, Cpk, Pp, and Ppk, which can be very confusing and deceiving. A better practice is to use a probability plot to describe process capability/performance, since a probability plot offers more output flexibility and data understanding potential than process capability analyses that also provided Cp, Cpk, Pp, and Ppk outputs. When make a process capability/performance metric statement probability plots are also very useful, even though no specification exists. To get organizations out of the firefighting mode, probability plotting is not the most important issue relative to creating a no nonsense balanced scorecard measures system.
Corporate objectives, when implementing the Integrated Enterprise Excellence (IEE) measurement system, can be achieved. In the IEE methodology, there can become a measurement “pull” for the initiation of projects when a predictive metric does not produce a desirable improvement for the enterprise as a whole. To accomplish this goal, a measurement system is desired which is independent of how a sample collection system is developed.
30,000-foot-level balanced scorecard measures’ (control charting) primary purpose should be an overall view of customer experience. Assuming that there is consensus with this position, a couple questions need to be asked to determine if there is agreement as to what should be considered as a potential common cause and special cause input variable source in a 30,000-foot-level control chart. This is in contrast to the timely identification of an issue using a control chart to stop a manufacturing line for problem resolution because of an out of control signal, which is something that is typically conveyed in classes but does not often occur in the “real world”.
Let’s discuss a typical situation where process raw material is changed day by day. To be sure, consider that some raw material characteristic affects the process’ output. Should we consider raw material as a potential common cause variability source or a special cause variability source?
Raw material should be considered a source of common cause variability in most opinions. If we all agree and there is also agreement that control charting should provide information consistent with what we believe with respect to special and common cause identification, we will not use x-bar and R charts.
Why is this? With our current belief system, the fundamentals behind the creation of an X-bar and R chart can seem inconsistent. X-bar and R chart control limits are only a function of within subgroup variability. When considering x-bar and R control chart limits, variability between subgroups has no affect. The control limit calculations of an individuals control chart provides control limits that are a function of the variability between subgroups. The control chart upper and lower control chart limits might consider the variability between raw material lots; but this would not occur in an x-bar and R chart.
X-Bar and R Charts generated by statistical programs such as Minitab can show process capability, but we don’t think that is the way to go. Following X-bar and R charts can create a lot of fire fighting. X-bar and R charts are not used when making an IEE 30,000-foot-level assessment.
Believe it or not, some people find it hard to believe that the x-bar and R chart they learned about in their basic statistics class has issues. Several 30,000-foot-level articles can be found in the “On-line Resource Library” link at www.SmarterSolutions.com, which provides more details and shows an example, not only for a continuous response output but other outputs as well.
Unfortunately it is probably often true that someone could be reprimanded because of a know-it-all attitude by leadership when suggesting how the overall business could be improved. However, now top leadership is often having major credibility problems, which could mean the stage is set for change.
However, suggesting an improved business system will not be easy. How leadership is approached can often guarantee success. Advocacy selling is the way to go. A leading thinking influencer can have top leadership connections. Headway can be made through his person when presenting a clear concise approach that directly addresses leadership pains; i.e., not selling the benefits. What needs to be sold is a system that is much more than implementing process improvement from a brainstormed list of potential candidates.
The following statement makes sense to me: “We all need a different set of business approaches and metrics that can bring sustainability to our own future development.” If we don’t do something NOW our grandchildren will not have the life that we have grown accustomed to.
To be sure, advocacy selling can trickle up to leadership who have the right intentions for the business in its entirety. We will find executives that would like to have a no-nonsense system for analyses blended w/ innovation, improvements and measurements that benefit the overall corporation. There must come a time when corporate america moves away from top executive changes every new season with an accompanying new-fangled business methology, where the old guard was granted a major golden parachute even as the company value plumeted during their term.
Need help implementing process improvement systems? Achieve the Three Rs of Business; Everybody doing the Right things and doing them Right at the Right time. Subscribe to the articles in the “On-line Resource Center” at www.SmarterSolutions.com that provide insight to a long-lasting Integrated Enterprise Excellence (IEE) system that overcomes these issues.
If you have a passion for implementing process improvement systems, consider becoming an IEE Blackbelt.
Obviously not everyone can work remotely as some vocations require workers to consistently attend their employers premises or travel to perform their tasks in person. But for those of us are allowed to work remotely then I thought it would be useful to share my experiences and present some practical advice by writing and publishing it on the Internet in the hope that I could give others valuable ways for adapting to remote working or managing remote workers.
I can tell you that there are groups of so called ’experts’ on the web who will try and sell you online education for substantial sums of money, believe me you don’t have to do this.
I am lucky enough to be able to work anywhere I choose and just about everybody who asks me what job I do wants to get an idea of how I manage to work remotely. Don’t be fooled here I am still perfecting the art of remote working as everyday I discover persons on the net who show me new knowledge and I am constantly uncovering new software and approaches that make my life easier and improve my productivity.
In the past seven years I have immensely adapted my working methods to enable me to do just about all of my work remotely with a box of online tools and rigid self discipline. One late night whilst searching the net I discovered Quickbooks online and this inspired me as to what just might be possible. The encounter with web based ‘on demand’small business accounting software was inspiration for me and the start of my ‘remote working experience.
I have to mention up front that proficiently working remotely is as much about the systems as it is about self management. Working remotely also means imparting to your co-workers, supervisors and clients as to what they can expect and how they will maintain contact with you.
In ‘Remote Working Part 2 – Why self discipline is important’ I discuss how to focus.
W. Edwards Deming, in his book, Out of the Crisis (Massachusetts Institute of Technology, 1982) stated, “We shall speak of faults of the system as common causes of trouble, and faults from fleeting events as special causes….”
Does Deming and Shewhart view the theory of variation differently? Forrest Breyfogle says that mathematically the control limits for a Shewhart x-bar and R chart are not affected at all by variability between subgroups.
To illustrate the implication of this consider that you have a raw material lot that changes every day and it has a large affect on the response of the process. Remember we are subgrouping by day. The x-bar plot of an x-bar & R control chart will invariably show many out of control signals; i.e., the Shewart term “assignable cause” can be applied to the raw material.
However, most people I ask will consider that the natural up and down variability of the raw material inputs to be a potential source of common-cause variability (Deming term) to the process; i.e., it is just the variability from an input parameter.
If the mean value is analyzed using an individual control chart, this variability will show as common cause; i.e., data will be in control. This is because the variability calculating the control limits for the individuals control chart is the moving range between adjacent subgroups.
Additionally, if only a single sample were chosen daily and placed into an individuals control chart (I-Chart) (instead of using multiple samples in a subgroup), the data would be shown as “common cause” variability.
The enterprise can benefit most from Six Sigma when they have an integrated scorecards and strategic planning system which leads to targeted projects that have the most enterpise-as-a-whole benefit. Silo projects in isolation that appear beneficial but have little overall enterprise financial benefit can be avoided if this approach is used. For example, from a manufacturing point of view Six Sigma production efficiency-improvement projects could appear beneficial; however, if currently the organization has much excess capacity, it can be more advantageous, from an overall business perspective, to focus on improving sales and marketing efforts.
The Enterprise process DMAIC (E-DMAIC) business-system roadmap is a systematic means to identify and execute projects that have the most benefits to the business. Strategies created analytically and innovatively can establish goals for an organization’s value chain 30,000-foot-level reported metrics that would have the greatest dynamic impact on the financials using the Integrated Enterprise Excellence system. These improvement needs would “pull” or create improvement projects that woudl impact these metrics in a postive manner.
Organizations can enhance Lean Six Sigma Black Belt training for their six sigma black belts by including Forrest Breyfogle’s Integrated Enterprise Excellence System that goes the Balanced Scorecard.
Several 30,000-foot-level articles can be found in the “On-line Resource Library” link at www.SmarterSolutions.com.
When it comes to switching to electronic procurement, many companies misuse the concept of strategic sourcing. They actually use the term to mean something else – a sort-of cover up for another corporate move. They use the term “strategic sourcing” in place of saying they are streamlining costs.
Strategic sourcing, in the core essence of the term, pertains to the attempts and efforts of the buyers to be extremely cautious in evaluating and establishing long-term relationship with their suppliers. This, in itself, is the “strategy” that a company can claim – how its buyers create that lasting interrelationship with the suppliers – because it entails cultural reconciliation between the buyer and the supplier. For an interrelationship to become mutually beneficial, either or both parties have to embrace change in attitude, tradition, and perhaps some beliefs. This approach requires profound and far-reaching planning, and other management considerations. The strategic configuration, because of its specific processes, can be considered in practice within a company.
The key to reaching a long-term plan is adopting and forming an operational process that will navigate the procurement group to the right and relevant track. It is critical for the development and implementation of the strategy.
From any company’s statements of income, specifically a manufacturing company, much of the revenue or sales of the business is reduced because of the cost of goods. Most of the time, ¾ of the company’s sales reduction is caused by the requirement to purchase raw materials for product manufacturing. So what can be done? A company can form a team which will serve as the enforcer of procurement strategy. The responsibility of the team is to ensure proper implementation of the operational processes involving supplier relations. Such will absolutely increase the business’ net income.
Adopting strategic sourcing requires critical decision making, hence should be planned out well properly. Long operational processes are expected to be undergone by the company since strategic sourcing is a long-term endeavour. Strategic sourcing does not end and is not achieved by merely using the term with the intention of cutting costs.
Unfortunately it is probably often true that someone could be reprimanded because of a know-it-all attitude by leadership when suggesting how the overall business could be improved. However, now top leadership is often having major credibility problems, which could mean the stage is set for change.
However, suggesting an improved business system will not be easy. Success is often dependent upon how we approach leadership. Advocacy selling is the way to go. A leading thinking influencer can have top leadership connections. Headway can be made through his person when presenting a clear concise approach that directly addresses leadership pains; i.e., not selling the benefits. What needs selling is an enterprise-wide system that is much grander than implementing process improvement projects from a brainstorming session.
The following statement makes sense to me: “We all need a different set of business approaches and metrics that can bring sustainability to our own future development. We must do something different now or our grandchildren will not have the same life that we know and love.”
For sure advocacy selling can influence leadership who strive to do the right things for the enterprise. Surely there are leaders that would like to have a no nonsense system for measurements, analyses (blended with innovation), and improvements that benefit the system as a whole. There must come a time when corporate america moves away from top executive changes every new season with an accompanying new-fangled business methology, where the old guard was granted a major golden parachute even as the company value plumeted during their term.
Can you use some help implementing process improvement systems for your enterprise? Achieve the Three Rs of Business; Everybody doing the Right things and doing them Right at the Right time. Subscribe to the articles in the “On-line Resource Center” at www.SmarterSolutions.com” that provide insight to a long-lasting Integrated Enterprise Excellence (IEE) system that overcomes these issues.
If you have a passion for implementing process improvement systems, consider becoming an IEE Blackbelt.
Dr. Edwards Deming’s Profound Knowledge deals with Systems Thinking, Statistical Thinking, Scientific Thinking, Applications of Psychology; but today’s business management system and its scorecards are not aligned to this philosophy. How does this impact your lean six sigma methodology?
As Deming pointed out it is important that managers understand variability. We need to have an executive metric reporting scorecard, dashboard reporting system that describes this variability so that appropriate actions occur. We’re not dealing with rocket science here. Is it different? Yes. As we are seeing in the economy today, if organizations don’t make the change they can have very detrimental behaviors that can be very costly.
The systems of business management are not work and they must be reinvented! Metrics and the way we report them is a critical part of this reinvention or nothing will change.
Red-yellow-green scorecards, for example, can lead to much detrimental behavior and significant firefighting. Looking down from the 30,000-foot-level on red-yellow-green scorecards shows how nothing truly important may have changed although the colors toggle back and forth.
The primary role of traditional control charts is to identify when special cause conditions occur so that corrective action can be taken in a timely fashion. We can create an individuals control chart (not an x-bar and R chart) to create a 30,000-foot-level metric report to assesses whether a process is predictable and, if appropriate, declare a prediction statement.
Even though there was much toggling between the colors no improvements were made because the 30,000-foot-level control chart did not move to a new level of stability. The probability plot (data considered a random sample of the future since there is a recent level of stability) predicts a red condition about 1/3 the events in the future. If this is not satisfactory when considered with all metric conditions a process improvement would be pulled by this measurement for creation.
This situation is not unlike Edward Deming’s red bead experiment where people were getting praised or criticized based only on the color of a bead they had chosen at random. Isn’t this not unlike what is frequently happening in businesses today to you because of our metric system?
This system takes tools of the balanced scorecard and lean six sigma methodology to an enterprise management system.
Several 30,000-foot-level articles can be found in the “On-line Resource Library” link at www.SmarterSolutions.com.
What is a SWOT analysis (also known very simply as a SWOT) and why is doing one important to your business? Use this sample SWOT analysis to help you do your own SWOT. All small businesses need to include a SWOT in their strategic planning. SWOT is a key element of successful strategy development.
I saw a company once that listed its mission as producing a product with minimum impact on the environment. While certainly a noble idea, I would ask if they were willing to sacrifice the success of their business to reduce their impact on the environment. Really, their mission was to produce the product. Doing so in an environmentally sensitive way was certainly a key result they wanted and should be a central theme in the plan. This environmental concern will definitely impact their efforts, but it wasn’t the mission. I suspect though that it was the vision of the company’s owner. So the mission was to produce a product but the owner’s vision was to be a company that produced a great product in an environmentally friendly way.
In another example, a non-profit organization I worked with wanted to restart a thrift store. They said their mission was to provide a place where people could sell their used and unwanted items. I asked what the proceeds from those sales would be used for and was told the store’s profits supported several local charities. So, I asked if, considering overhead expenses and very generous consignment policies, they would be willing to forgo the charitable gifts as long as people had a place to bring their used and unwanted items. At that point the light went on and the organization developed a mission statement spelling out that their prime reason for being was to raise money for charities. The manager then called all the workers together and explained the true mission. There was a noticeable change in the store and the next two years were the most successful in recent history.
The response was “Sure, but I did not think about any employee leaving. The business was over 30 years old and very well established. All the records were in tact and everything looked good on paper.
An old quote states: “Good luck happens when preparedness meets opportunity.”
So possibly the reverse is true that “bad luck happens when no planning meets the unknown.”.
As I said, the leader owns the vision for the organization he or she leads. This vision can be lofty and challenging, a concept that is bold and far reaching. It is leaders with great visions who motivate others to succeed and accomplish great things. To create a vision statement, consider what you would ideally like to accomplish. Don’t worry about what stands in the way, what do you really want to do?.
This creates a working harder not smarter business environment. The business owners in the earlier story are both discouraged because what they believed to be some easy money now has become a daily effort just to keep the doors open.
Resource Author Francisco Rodriguez H. Understand How to Make Money Without Money Today Todo sobre Juegos para gente que le gusta jugar Encontrar un Trabajo – Empleo es fácil si sabe dónde buscar
For any business to succeed, it must follow the three Rs of business: Everyone is doing the Right things and doing them Right at the Right time.
Management’s ultimate goal continues to provide maximum, measurable, predictable, and sustainable bottom-line results for the entire, integrated enterprise. Emergence of the process called Integrated Enterprise Excellence (IEE) from Smarter Solutions, Inc. makes all of these possible.
