business rescue and recovery in a challenging economic time! tom davis lean business initiatives...

Business Rescue and Recovery In A Challenging Economic Time!

Tom DavisLean Business Initiatives

TomDavis148@Gmail.com

(Lean May Not Be the Immediate Answer)

LBI LBI

What is Lean ?

A systematic approach to managing business activities to generate the maximum return.

Simply…..

The Identification and Elimination of Waste!

Components of Lean

• Training• Facilities Improvements• 7 Wastes• 5’s• Value Stream Mapping• Kaizen• Visual Processes

Typical Process

Material30 days

Sub Assembly15 days

Assembly10 days

Test5 days

Pack/Ship3 days

Total63 days

MaterialLead Time

29 Days

Sub Assembly Queue14 days

Assembly Queue9 days

TestQueue2 days

Pack/Ship Queue2 days

Waste56 days

Waste Process

90% of Lead Time is Waste

Value Stream Mapping

• A simple and powerful tool to model specific, finite business processes.

• The core activities:– Current Condition– Ideal Condition– Target Condition

“5 Whys” --- & --- “Ya But’s”

Kaizen

• What does Kaizen mean?• What is a Kaizen event?• What is the key benefit of Kaizen?

If everybody makes just 1 improvement a day..100 Employees X 5 X 52 = 26,000/Year

Incremental Approach …… Baby Steps!

Change Management

• Roles Will be Changing• People Will be Nervous• Trust Will be Key• Training and Clear Communications• Lean Initiatives Are Not Optional

KPI

• Too Little Space

• Cost + Profit = Sell Price• Planned Overproduction• Some Defects Acceptable

• You Have All The Space You Need

• Sell Price – Cost = Profit• Zero Over Production• Zero Defects

Traditional Lean

What is Rescue and Recovery?

Depends on the Specific Situation

• Operational Issue?• Financial Issue?• Product or Market Issue?

Usually it is a Combination of Factors

Initial Intervention!

• Stabilize the Business• Assess the Business• Assess the Management• Assess the Products

Liquidity?

CASH IS KING!

Assessment

• Operational– Is the plant Safe? Environmental?– Are there systems in place?– Are they sufficient?– Is the Staff Capable?– Is the Plant and Equipment Adequate?

Assessment

• Financial– Review• Income Statement• Balance Sheet• Cash Flow***

– Are There Financial Systems?– Are They Being Used Properly?– Are They Robust?

Assessment

• Product and Market– Is the Target Market(s) Being Served?– Does the Product(s) Serve the Current Need?– Where is the Product(s) in its Life Cycle?– What is the Product(s) Margin?• Commodity• Engineered• Custom

– What is the Perceived Value?

Assessment

• Management:– Is the Staff Properly Educated and Trained?– Do They Have the Required Experience?– Do They Understand the Situation?– What are the Deficiencies?• Skills• Leadership• Urgency

– Do They Have and Understand the Expectations?

SWOT

• Strengths• Weaknesses• Opportunities• Threats

Recovery Plan

• Tighten the Focus– Market– Operational– Fiscal Control, Fiscal Control, Fiscal Control

Baby Steps…….Take the Gain!

Value Stream Mapping

• A simple and powerful tool to model specific, finite business processes.

• The core activities:– Current Condition– Ideal Condition– Target Condition

“5 Whys” --- & --- “Ya But’s”

Organizational Expectations“They Go Both Ways”

• Instill Honesty by Being Honest• Let Employees Know What is Going on & Expected!– Most Times They Already Know Better Than You Do.

• Employees Want & Deserve to be Well Managed• Clearly Communicate Expectations• Verify that Employees Understand the Implications

of Failing to Meet Expectations– Individually– Collectively

Change Management

• Behaviors and Roles Will be Changing• People Are Nervous• Trust is Key• Training and Clear Communications are Pivotal• Rescue Initiatives Are Not Optional

Management Behavior

• Do Nothing Immoral, Illegal or Unethical• Appropriate Transparency:– Financial – Suppliers– Selected Customers– Employees

• Maintain a Positive Outlook but Don’t Underplay the Risks!

Comments

• Recovery is a Management Process• Recovery Benefits from Transparency• Recovery Requires Functional Integration• Recovery of Business Performance Benefits

from Visual Monitoring

QuestionsContact: TomDavis148@Gmail.com

Cell: 508 496 7210