business rescue and recovery in a challenging economic time! tom davis lean business initiatives...
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Business Rescue and Recovery In A Challenging Economic Time!
Tom DavisLean Business Initiatives
(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: [email protected]
Cell: 508 496 7210