Tuesday, December 9, 2008

Planning is the Key to Success to Implementing Lean

Lean is a philosophy that is based on continuous improvement, the simplification and standardization of business processes, and the elimination of all forms of waste throughout the organization. Implementing Lean techniques can help companies to improve their operational performance and customer responsiveness and drive positive results to the bottom line.

Companies that are new to implementing Lean often times start with taking small steps, sometimes as a trial to test the process. Once they realize the early benefits of using Lean techniques they get more aggressive with their strategy and expand the program throughout the organization. The basic steps to developing the Lean plan are:

  • Review and assess Lean readiness within the organization
  • Identify the readiness issues that must be addressed to make Lean successful
  • Develop aLean strategy and metrics that will be used to guide the Lean implementation
  • Analyze and prioritize improvement opportunities
  • Provide overall Lean education and training, including change management
  • Develop a plan of action for implementing the improvement opportunities

Engaging top management is vitally important to facilitate the adoption of Lean philosophies and technologies. In order to get and sustain buy in from top management, it is important to make them realize that adopting Lean tools and concepts will help assure the long term viability of the company.

Benefits of implementing a well planned Lean effort are:

  • Alignment of operations and corporate strategy
  • Clear enterprise-wide communication
  • Increased throughput on the shop floor and front office
  • Reduced costs by the elimination of wastes
  • Increased flexibility in satisfying changing customer demands

As the famous adage goes “it is easier said than done”, companies face challenges in implementing Lean concepts. Having a systemic approach to the implementation, incorporating education at all levels along the way and focusing on change management will help assure success in the adoption of Lean tools and concepts.

Are you Best-in-Class?

Monday, December 1, 2008

Cost Control Becomes the Number One Pressure

Cost control has been cited by Aberdeen Research as the number one pressure impacting the ERP strategy within a manufacturing company. This phenomenon is particularly prevalent in process industries where cost control has gained a renewed focus in these economically hard times. As a result of their recent survey, the top four pressures were listed by Abredeen as:
  • Must reduce costs
  • Must improve customer response times
  • Must be easier to do business with
  • Need to manage growth expectations

With the emergence of cost control as the number one business driver this year (number two last year), the following were listed as the top cost issues:

  • Rising costs of raw materials
  • Rising energy costs’ impact on manufacturing operations
  • Rising energy costs’ impact on in/out bound transportation
  • Impact of poor quality
  • Proliferation of changeover costs

ERP systems are able to assist the organization in managing these costs with the integration and data availability that are inherent in most systems today. By properly aligning business processes and ERP functionality, manufacturers should be able to gain control of most of their significant costs. Along with the standard features of an ERP system, there are special enablers that exist in many systems that can prove to be very useful:

  • Advanced Planning and Scheduling
  • Inventory Optimization
  • Material Change Management
  • Event Management (triggers and alerts)
  • Manufacturing Execution System (MES)
  • Enterprise Asset Management
  • Specialized Inventory Management features: Lot Traceability, Shelf Life Management, Actual Costing, Co and By-Products, Compliance Reporting

Peak Enterprise Solutions is able to help clients redesign their business processes and utilize the tools of the ERP system to allow them to increase the value of their business.

Are you Best-in-Class?

Monday, November 24, 2008

ERP Helps Enable a Successful Business

Rising costs and a troubled economy have caused cost reduction to be the top business driver behind most technology initiatives today. In their report “2008 ERP in Manufacturing”, Aberdeen Research found that the pressure to reduce costs has surpassed both growth and customer service as the main business driver of ERP strategies. Not only are production costs rising, but the cost of quality, the cost of transportation and the cost of energy are becoming more and more challenging to the bottom line.

An ERP system that is properly matched to the needs of the company and utilized as an overall part of the business processes is able to serve as a business enabler to provide the visibility needed to control costs and enhance customer service. It does so by providing a framework for standardized business processes utilizing best practice concepts and allows coordination between different business functions. Some of the key benefits of a successfully utilized ERP system include:
  • Better visibility to business processes across multiple functions and departments
  • Improved customer responsiveness
  • Reduction of inventory and improved inventory accuracy
  • Reductions of administrative and manufacturing operational costs
  • Improved manufacturing schedule compliance and complete on-time delivery
  • Reduced customer lead time and improved quality performance.

Metrics to be used to measure success in an ERP environment include:

  • Inventory Days Supply – number of days inventory based on projected usage.
  • Manufacturing Schedule Compliance – percentage of work that is completed on time per the manufacturing schedule
  • Complete and On-time Shipments – orders shipped complete and on-time per the customer’s requested date
  • Order Cycle Times – various cycle times can be measured, but the customer order date to the delivery date cycle measures the time from a customer point of view
  • The Bottom Line – The most important measure! As cost performance improves, so will the bottom line.

Are you Best-in-Class?

Monday, November 17, 2008

Git-r-Dun to Make Change Successful

Any organization that is trying to make a change to how it operates will encounter issues of making the change that will dictate the level of success achieved. People tend to stay “in the mode” as long as there is more of a reason to do so than not. The longer the current practice has been in place, the more fundamental the change or the more the entire organization is affected are key issues that will determine how successfully the change is made. When an organization is making a significant change to the processes being used, it is important to realize the following:
  • Individual resistance to change is the norm, not the exception.
  • People must be informed, empowered, willing and able in order for changes to be made effectively.
  • Personal and organizational values affect how people react to change.
  • People go through the change process in stages and go through these stages as individuals.

There are several reasons that organizations fail to succeed with changes that are attempted:

  • There are unclear or unrealistic expectations for what the change is trying to accomplish.
  • The company culture is misjudged or ignored as it relates to how the change will be accepted.
  • Change management is viewed as expendable and/or is not done proactively.
  • Communication to those involved and affected is not done effectively or is done too late in the process.
  • End users who must participate in the change are neglected in the overall process.
  • No action plans or meaningful metrics are developed to provide guidance or monitor progress.

In order to manage the change that is being attempted, an organization needs to proactively:

  • Understand what the change means to the organization.
  • Assess the readiness of those involved.
  • Identify talents to be used in making the change.
  • Develop a plan and appropriate metrics that are simple and easy to understand.
  • Assess results review and adjust.

And finally………Git-r-Dun!

  • Spend time where the action is.
  • Get feedback from others.
  • Push to the next level of improvement.
  • Follow through with expectations.
  • Let people ask questions.
  • Give honest assessments.

Are you Best-in-Class?

Monday, November 3, 2008

Learning Plans Help Retain Key Employees

For quite some time, the idea of working for a single company for an entire career has been outdated with employees continually looking for opportunities that help them advance in their professional life. One of the keys to retaining good employees is to provide a learning environment where the employees can expand their knowledge base and nurture their career goals and aspirations.

According to Aberdeen Research, Best-in-Class companies:
  • Standardize the career planning and development process.
  • Have a “development” mindset within the organization.
  • Actively promote learning programs to those who can benefit.
  • Apply the learning mindset to non-managerial employees.

There are many educational sources that an organization can use to build and promote a learning program. Some of these sources include:

  • Professional society memberships, meetings and certifications.
  • Business and technical seminars and conferences.
  • Local educational institution programs such as a community college or university.
  • Private consultant companies with workforce training programs.
  • E-learning programs that include the internet, computer based learning, virtual classrooms and digital collaboration.

In order to be Best-in-Class, companies need to:

  • Apply the learning mindset to non-managerial employees.
  • Hold managers accountable for developing internal potential.
  • Define metrics that define and track educational performance.
  • Implement processes to promote learning and celebrate successes.

With a learning program that advances the knowledge of the employee, the company benefits due to the expanded knowledge of the workforce and the employees are more apt to stay put since there is a path for growth and progression.

Are you Best-in-Class?

Monday, October 27, 2008

Lean Applies to the Office Too

Lean in the office is not about eliminating staff or resources, it is about improving the value of activities so that workers are performing duties that directly relate to the result that the customer wants. And, it’s not only for front office functions of manufacturers. Service, retail, professional, healthcare, educational, governmental, volunteer or any organization that delivers something to a customer via a process involving multiple people and activities can benefit from leaning out the processes, eliminating waste and working to the needs of the customer.

Lean focuses on five principles that can be applied to office environments as well as to production environments:

1. Value Definition
2. Process Mapping
3. Uninterrupted Flow
4. Customer Pull
5. Pursuit of Perfection

Much like the shop floor, a lean office consists of processes that have eliminated waste, minimized non-value added activities, corrected performance issues, integrated disjointed processes and automated required activities. The only real differences between the shop floor and the office are that information is usually being processed instead of actual material components and the product being delivered may be a service, not a physical item.

All too often, office improvement efforts concentrate on how to do things better rather than concentrating on what things really need to be done. By using a Lean methodology, the “how” part does not get addressed until the “what” part is defined, leaned and redefined. This methodology consists of:

  • Creating a team of process owners that fully understand the business process.
  • Performing current state process mapping activities to identify how the process works.
  • Indentifying all of the process inputs and outputs and their suppliers and customers respectively.
  • Building a future state map of what the process should be.
  • Developing a work plan that identifies what activities must be done, who will need to do the work and when these activities should be completed.

By applying the lessons learned in manufacturing and focusing on the five principles of lean, those who have embraced a Lean Office and its disciplines have made an important change to how their business operates. Getting administrative personnel focusing on continuous improvement and the customers’ needs is just as valuable as getting the shop floor to be lean in regards to the organization being competitive and profitable. The key to success in a lean environment is for the entire organization to “Be Lean”, not just “Do Lean”.

Tuesday, October 21, 2008

Competency Management - Managing the Knowledge of the Workforce

In the global, technology based economy of today, organizations face a daunting task of keeping their workforce talents in sync with the current and future requirements needed in order for them to stay competitive. Competency Management programs are based on identifying the business processes that exist in a company, breaking them down into their specific tasks and understanding what each individual needs in order to perform the job. Once this is done, tools and programs need to be developed and used that will keep the workforce educated and trained so that people are able to grow and change as business environment changes.

Results from companies that focus on these issues include improved employee retention, improved employee performance and improved revenue per employee. Aberdeen Research has identified that Best-in-Class companies have five main reasons for focusing on competency management:
  • Aligning the workforce with business objectives
  • Improving workforce productivity
  • Increasing the flexibility and agility of the workforce
  • Identifying high potential workers
  • Reducing employee turnover

In order to achieve Best-in-Class performance, companies need to:

  • Understand their business processes, identify the core competencies required and link them to the lifelines of the organization.
  • Identify current and anticipated gaps in organizational knowledge and skills based on this core competency analysis.
  • Develop and/or seek out workforce education and training programs that will close the identified gaps and keep the organization moving forward.
  • Add performance based rewards to compensation models so that workers can see a direct benefit to learning and higher levels of performance.

Are you Best-in-Class?

Monday, October 13, 2008

Real Business Value from Learning and Development

In today’s economic climate, organizations are forced to focus on getting as much as they can from what they've got. With the workforce being considered the most critical resource for most companies, getting the most value from employees via education and training is becoming a priority for most. In a recent survey by Aberdeen Research, Best-in-Class companies shared some common characteristics:
  • 73% have integrated their learning strategy with their organization’s overall strategy.
  • 70% have identified and inventoried all existing learning resources available to be used.
  • 57% have defined the workforce core competencies required for each job and function.

They found that these characteristics had the following results:

  • Improved employee performance on average 22%
  • Improved workforce retention on average 19%
  • Improved new employee time-to-productivity on average 18%

Aberdeen also listed the top five ways that learning and development have the most impact:

  • Developing skills to meet business changes
  • Preparing employees for future opportunities (i.e. succession planning)
  • Increase workforce productivity
  • Getting new employees up to speed quickly
  • Retaining critical employees

In order to reach Best-in-Class performance in this area, businesses need to:

  • Identify all stakeholders that can benefit from learning and make them aware of what is available.
  • Establish a well defined process to identify specific knowledge gaps that can be resolved through education and training.
  • Integrate learning with performance management and make learning readily available.

Are you Best In Class?

Peak Enterprise Solutions has a comprehensive program for workforce education and training that includes classroom training and hands-on application training.

Monday, October 6, 2008

KPIs and Performance Management

Business success depends on the ability to measure and react to Key Performance Indicators (KPIs). Executives and managers need to make timely and accurate decisions in order to improve the operation of the organization and relationships to their customers. Best-in-Class companies are focusing on solutions that provide timely accurate information in order to improve operational performance. These solutions include:

  • Improve executive visibility to operational drivers.
  • Replace “gut-feel” decisions with “fact-based” decisions.
  • Understand operational life-line drivers of performance and how to measure them.

Aberdeen research has determined that among Best-in-Class companies:

  • 82% have at least one year of experience in managing operational KPIs.
  • 52% use reporting capabilities and information from their ERP systems.
  • All have improved customer renewal rates by 4.7% year-over-year vs. a decline among non Best-in-Class.

In order to achieve Best-in-Class performance, companies need to:

  • Identify the key operational areas of the company that need to be measured in order to improve success to the customer.
  • Identify which areas will benefit most from developing and using KPIs to make improvements to the process.
  • Develop a “selective few” set of metrics that are tied to the lifelines of the company and that are straightforward and easy to understand.

Are You Best-in-Class?

Tuesday, September 30, 2008

The Customer Needs to be the Focus

Successful companies are continually looking to the customer to measure their success and are focused on improving the customers’ experience in order to improve revenue and profitability. According to Aberdeen Research, 75% of Best-in-Class companies proactively manage the customers’ experience through specific review programs. In so doing, they continually review business processes throughout the organization to assure that all processes are tied to satisfying the customer.

Aberdeen found that within those that are Best-in-Class companies:

  • 90% had year-over-year increase in customer retention
  • 84% had year-over-year increase in customer satisfaction
  • 68% had year-over-year increase in customer profitability
  • 67% regularly incorporate the customers’ experience into management decision making
  • 53% perform regular review of all customer-facing business processes as well as other processes in the organization

In order to achieve Best-in-Class performance, companies need to:

  • Perform regular review of all processes to assure they are in sync with the needs and desires of the customer.
  • Implement a set of metrics and measures that tie the business processes to the satisfaction of the customer.
  • Establish a mind set of continuous improvement so that the organization can change as the customer demands change.

Are you Best-in-Class?

Monday, September 15, 2008

Defining the Value of Quality Management

The process of quality management has evolved of the years with increasing pressure from customers, government and shareholders driving manufacturers to produce higher quality products while reducing the cost of quality. Aberdeen Research has determined that Best-in-Class companies have a significantly lower cost of quality with:

  • 9% less revenue lost due to internal failures
  • 6% less revenue lost due to external failures
  • 2% less revenue lost due to assurance costs
  • 2 % less revenue lost due to prevention costs

    Totaling 19% less revenue lost due to cost of quality

In order to achieve these Best-in-Class performance levels, companies need to:

  • Create/Improve visibility of quality processes across the entire manufacturing operation and suppliers
  • Implement Quality Management Systems (QMS) at an enterprise wide level
  • Establish real-time or near real time links between QMS and other technologies implemented across the value chain

Are you Best-in-Class?

Tuesday, September 9, 2008

Indiana Ranks Well in National Economic Performance

For many years, national media outlets, not-for-profit organizations and higher education institutions have ranked states’ performances in several important areas which impact business growth. Many of these studies have an impact on a state’s ability to grow its economy and be competitive. In addition, these studies also reflect trends or behaviors which factor into site selection decisions. While rankings are not the be-all and end-all of economic vitality, they provide key insights into how a state approaches issues which impact business operations.

CNBC: “America’s Top States for Business 2008”
Indiana is ranked #13 overall and placed in the Top Ten for cost of doing business, transportation and business friendliness. Indiana improved 13 spots from the previous year’s ranking.

Forbes Magazine: “2008 The Best States for Business”
Indiana is ranked 25th and ranked highest of all neighboring states in the Midwest.

Chief Executive Magazine: “2008 Annual Best & Worst States for Business”
Indiana is ranked 8th. The Hoosier State was the highest-ranked state outside of the Sun Belt, based upon response from 605 top corporate executives.

Site Selection Magazine: “Annual State Business Climate Rankings”
Indiana is ranked 11th and showed improvement in several areas of the survey, including corporate executives’ opinions of the state. Changes made to Indiana’s tax structure have been well-received by corporate decision makers.

Governing Magazine: “Grading the States ’08: A Management Report Card”
Indiana is ranked 9th and scored highest in: financial controls/reporting, structural financial balance, hiring talented team members, managing employee performance, infrastructure maintenance, infrastructure intergovernmental coordination, infrastructure internal coordination, and managing for performance. Indiana ranked higher than all but one of its neighboring states in overall performance.

source: www.insideindianabusiness.com

Monday, August 25, 2008

Lean in Supply Chain is Key for Success

Although C-level executives are enthusiastic about the benefits that can be derived by “Leaning out” manufacturing operations from plant to plant, there is a large performance gap between those companies that are simply using Lean techniques on the shop floor and those that have built a culture based on Lean thinking throughout the Enterprise and in particular, the supply chain.

To be most successful, organizations need to extend the lean thinking concepts from the shop floor to the entire supply chain including, the front office and executive suites, customers and suppliers. By doing all of this, the company will progress from “Doing Lean” to “Being Lean”. Best-in-Class performers have three basic characteristics:

  • Transfer of Lean thinking from the shop floor to the supply chain
  • Consistent senior management commitment across the supply chain of suppliers, customers, and distribution partners
  • Extension of Lean concepts and techniques across the entire value chain

Once the Lean way of thinking is successful within the organization, suggestions for expanding into the entire supply chain include:

  • Include major suppliers, customers, and partners as part of the audience as they are deployed across the supply chain
  • Evaluate each supply chain process as to applicability of Lean concepts
  • Implement performance measurements that span the supply chain network. Measure quality, cost and delivery performance.
  • Build mutually beneficial relationships with partners to share information and synchronize planning activities driven by ‘Pull’ demand concepts

Are You Best-in-Class?

Friday, August 15, 2008

Peak is featured in the SB Tribune

South Bend Tribune Weekly
August 11. 2008 6:59AM

Consulting Firm Wants to Help Businesses Run Better

By JENNIFER OCHSTEINTribune Correspondent

Brad Staats wants to see manufacturers reach their peak value.To help companies realize this goal, Staats started his consulting firm, Peak Enterprise Solutions, just more than a year ago.“We work with manufacturing companies to help them run better businesses,” said Staats.While he and the consultants who work with him don’t touch finance, human resource, sales or engineering aspects of a company, Peak Enterprise Solutions deals with the rest of the business processes. “From the time the order is made from the time it is shipped — we deal with all the processes involved in running a business,” he added.

Staats and the consultants he works with work in four business practice areas: business consulting, which includes enterprise resource planning; lean manufacturing planning and implementation; systems solutions and educational programs.A resident of LaPorte for the past 20 years, Staats said he started the company partly because he saw a need for it within a 100-mile radius of South Bend.“I feel there is a lot of opportunity to help companies, and I wanted to keep consulting,” Staats said. “I saw a market for it.”

With 25 years experience in consulting and manufacturing management, Staats started consulting in the steel industry, deciding to go into business for himself in April of 2007.While there are three active consultants associated with Peak Enterprise Solutions, Staats has no employees. He said the three form an association of consultants that offer expertise in different areas of manufacturing. Staats calls in different consultants to differing business situations.

His company’s services are based on “rate of return” and savings to his customers. His goal is to save his customers “more than what they’re paying us. We want to bring value to a company.”That means that his fees cannot be justified if the company doesn’t see a savings after his services are rendered. And Staats said he believes he can help his customers see savings in the companies by helping them improve and streamline their business processes and strategies. On top of that, Staats offers a free, one-day analysis to customers to determine whether he can help them. It gives him and the executives of a company a chance to talk and for Staats to propose any savings he can bring the company through his work with them.“We can see each other firsthand and understand each other” with a meeting like this, said Staats.

He believes what makes his company unique is the methodological approach he takes to implement strategies and educate employees, which includes team building, supervisory skills, effective communication and time management classes.For instance, when helping implement a lean business model into a company, he has a step-by-step process he follows based on the needs of the company. His methodology also takes on a holistic approach, working with everyone in the company from executives to those who work the shop floor. And he can oversee the entire project with a bird’s-eye view through project management.“This is my one focus — to keep everyone on task and to keep moving forward for the project,” Staats said.

For more information, contact Staats at (574) 232-3610 or visit his Web site at www.peakindiana.com.

Monday, August 4, 2008

Supply Chain Management: A Key to Success

Aberdeen Research Group’s survey of over 800 supply chain executives found just how tough the business pressures have become in their supply chains and highlighted the critical role that supply chain management can play in the overall success of the company. They found that Best-in-Class companies had:

  • Finished goods inventory turns of 28 turns
  • Total logistics costs as a percentage of sales of 5%
  • Perfect order percentage (complete and on-time) of 96%

In order to achieve these results, they found that:

  • Best-in-Class companies are 1.7 times more likely to have end to end supply chain visibility.
  • Best-in-Class companies are 1.5 times more likely to have implemented cross functional metrics across the entire enterprise.
  • Best-in-Class companies are 2 times more likely to have a single executive with overall supply chain responsibility.

In order to improve and achieve Best-in-Class status, companies need to:

  • Invest in data quality as part of the supply chain initiatives.
  • Institute a formal Sales and Operations Planning roadmap to execute reporting and metrics.
  • Improve supply chain responsiveness in order to manage and react to market events.

Are You Best-in-Class?

Monday, July 28, 2008

Best-in-Class Success via ERP

Pressures to reduce costs outweigh all other business drivers regarding Enterprise Resource Planning (ERP) systems. While ERP is generally viewed as required, it can also be key to streamlining the business processes. Aberdeen Research has surveyed over 1200 manufacturing companies and found that while ERP implementation generally produced a reduction on costs and improvements in scheduling across the entire organization, Best-in-Class companies had better results:

  • 20% reduction in levels of inventory with 97% accuracy
  • 95% manufacturing schedule compliance
  • 97% on-time and complete shipments
  • An average of 3.3 days to close a month

This survey showed that Best-in-Class companies:

  • Implemented 30% more ERP functionality
  • Implementation is 33% more likely to be owned by line-of-business executives
  • Standardized enterprise wide procedures for all business processes

In order to achieve Best-in-Class, companies need to:

  • Assign ownership of ERP success to line-of-business executives
  • Broaden the use of the ERP system to include all of the functionality available
  • Standardize common practices and ERP implementation

Are you Best-in-Class???

Wednesday, July 23, 2008

Gain Visibility across Production

Manufacturing executives have many challenges optimizing performance while attaining corporate goals. In today’s economic environment, a significant reason for performance management is operating cost reduction while continuing to serve the customer. Aberdeen research has found that:

  • Best-in-Class manufacturers operate with 25% operation margin.
  • Best-in-Class manufacturers realize 19% increase in On-Time Delivery, a 21% increase in OEE, and a 22% increase in yield.
  • Best-in-Class manufacturers realize 97% Raw Material Yield.

Their research also found that:

  • Best-in-Class manufacturers are 65% more likely to standardize exception handling processes and procedures across manufacturing operations.
  • Best-in-Class manufacturers are 2 times more likely to enable continuous improvement teams with analytics and real time visibility.
  • Best-in-Class manufacturers are 4 times more likely to display operational data and metrics in real-time.

In order to achieve Best-in-Class performance, companies must focus on improving operations in the following ways:

  • Automate data collection across manufacturing operations and use this data to control production.
  • Provide role based visibility to information and establish automated workflows across manufacturing operations.
  • Invest in visualization and analytical technologies to gain visibility across all operations and improve decision making.

Friday, July 18, 2008

Lean Transformation Strategies

Lean transformations that effectively improve the culture and performance of
an enterprise use an integrated approach across people, business processes,
and technologies. Based on the survey responses of over 800 manufacturing
professionals, the Aberdeen Research Group has identified specific strategies for manufactures to deploy at every stage along the Lean journey. Survey results show that firms enjoying Best-in-Class performance share several common characteristics which include:

  • Lean processes are standardized across the enterprise and are based on best practices.
  • Executive ownership of Lean initiatives exists, and these executives have worked to establish Lean Centers for Excellence across the enterprise.
  • External consultants are utilized to set expectations, help establish best practices, and train the appropriate number of internal champions.
  • Lean Scheduling software solutions are used to standardize processes and support decision makers in real-time.

Aberdeen has identified required actions for enterprises at every point of the
Lean journey. In each case, the required actions have been validated by the 800
survey respondents and shown to improve KPI performance in defects, first
pass yield, on time delivery, and throughput. Actions to reach Best-in-Class include:

  • Use external Lean domain experts to begin training, set expectations and establish best practices for pilot Lean initiatives.
  • Establish executive ownership of local Lean initiatives and establish a pilot Lean Center of
  • Excellence to support best practices across the enterprise.
  • Use manufacturing operations management capabilities to enable Lean tools that support Lean Scheduling and Execution initiatives.

Are you Best-in-Class?

Wednesday, July 16, 2008

Peak is TAG Grant Qualified

My company, Peak Enterprise Solutions, has just been qualified to deliver training and education for Lean Manufacturing under the Indiana Training Acceleration Grant (TAG) program.

By partnering with the Apprentice Academy of South Bend and Vincennes University, the Lean Enterprise Education curriculum developed by Peak is eligible to be used as part of a TAG grant where the company will be reimbursed for out-of-pocket expenses incurred for on-site training and education for Lean Manufacturing.

In addition to the reimbursement from the state, the individuals that participate in the program can qualify for course credit in the Vincennes University Business and Industry Division continuing education program “Customized Certificate of Applied Learning in Advanced Manufacturing”.

This hands-on education and training program is a great way for a company to start down the path to Lean and with the TAG grant, out-of-pocket expenses for this training are reimbursed by the state.

Why Peak Enterprise Solutions? All of our consultants have 25+ years of experience in both consulting and management, our approach uses a proven methodology, our projects are ROI based and we are locally owned.

Please visit the site www.in.gov/dwd/2698.htm for more information regarding the TAG grants.

Monday, July 14, 2008

Measurement is Key to Lean Success

Aberdeen research studies have consistently reported that the majority of manufacturers
have begun some form of Lean initiative and are at various states along their Lean journey. Manufacturers are focusing on improving operational factors in an effort to garner profits to the organization while continuing to meet customer expectations. They also report that:

  • While most companies indicate that they are Lean to some degree, few are Best-in-Class: adequate measurement and control is one missing link.
  • Operational factors are among the top three reasons driving Lean Measurement and Control
  • Operational metrics are often misunderstood or misaligned with strategic goals

Going through a lean transformation requires change to occur in all areas of the business and without some basic metrics beings in place, it is difficult to know where you have been and how you are succeeding in your effort. Developing metrics also forces the organization to determine what it is they are really trying to achieve by going lean so it facilitates getting everyone on the same page from the outset.

These metrics need to be basic, straightforward and close enough to the operation that those involved can actually influence them. Things like cycle time, changeover time or WIP inventory are things that people can see, touch and affect. Things like ROI, P/E ratios and ship-on-time percents are difficult since people have a hard time relating what they do day-to-day with these results. What is important is that the metrics being used at the tactical level support and contribute to the results desired at the strategic level, so careful consideration must be made when developing the lean metrics to be used.

Lots of things can be measured in a lean effort, so pick the few that are critical to your success. I'd love to hear what metrics are being used in your lean effort, so please let me know.

Friday, July 11, 2008

How Lean is Your Manufacturing Machine?

Manufacturing is more challenging today than ever before and most businesses struggle with many of the same critical issues:

  • Customer definition of value is constantly changing and is a lot more challenging.

  • Lead times are shrinking and on-time delivery to customers is less than satisfactory.

  • Inventory is out of balance with both shortages and excesses.

  • High cost purchasing/material mangers are expediting material.

  • There are more “Hot” tags on the floor than ever before.

  • Capacity problems…struggling to get enough product out the door.

  • Some work centers are idle while others are over capacity.

  • Profit margins are shrinking and cash flow is a problem.

  • Processes have excess labor, material or time or all three.

Becoming a lean organization can eliminate these challenges. Reduce inventory, lead times, labor cost, expediting and frustration. Increase customer value, throughput, capacity, cash flow and profits. Sounds idealistic? It's not. Going down the path to lean is rewarding and productive, both for the individual and the organization. Especially in these economically hard times, eliminating waste and concentrating on value added activities can give an organization the competitive edge it needs to stay afloat during hard times and really prosper during better times.

As I see it, there are two keys to being successful in the lean transformation:

  • Having a plan - going through the process with a plan and clear expectations will allow everyone involved to know where you are going and how well you are accomplishing the goal.

  • Managing the change - going lean is a likely a culture change/paradigm shift for the organization. It's probably a fundamental change in how the business is run, so working to make the change in behavior and then sustaining it has to be a conscious effort.

Companies that are successful at going lean are flexible, agile, good places to work and most importantly - profitable. They are able to change with the times much better than most and are poised for success in the future. There is lots of help out there if you are not sure how to go about it (most don't) so, go for it! Good Luck!