Steve Beeler

You have a goal…I have a way to get you there.

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Sales Funnel

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The Sales Funnel is at the core of business development. Theory of Constraints and Lean Thinking are manufacturing fundamentals. Good things happen when these concepts intersect.

Sales Funnel

Start by mapping your sales funnel from the beginning. What are the steps from contact to lead to prospect to customer? Capture decision points and criteria to qualify leads and prospects. Document rework loops where steps are repeated…and why. Note IT systems utilized along the way. This long chain of events will be cross-functional: credit approval in finance, feasibility in engineering, costing in purchasing, etc.

Next collect flow metrics: numbers of leads and prospects, conversion rates to quotes and orders, days and dollars in funnel, etc.

At a level of abstraction, your process map is beginning to look a lot like a factory…because it is! The sales funnel converts leads into customers just like a factory converts raw materials into finished products. Both have capacity constraints. Both are full of waste. Both can be improved through Theory of Constraints and Lean Thinking.

Consider a case study.

A client company was in a business that designed, manufactured, and installed mostly custom products. Its sales funnel was a project management process that included site renderings, permitting, and electromechanical design. While there was a backlog of outstanding quotes, the company’s factory was often waiting for orders. Could the flow through the project management process (aka sales funnel) be improved?

Here is a redacted portion of the company’s very complex sales funnel that incorporates the entire span of project management activities through installation:

Sales Funnel map

From this map, short-term bottleneck actions were identified to reduce waiting, rework, and overprocessing:

• Publish standards for weights and measures
• Refine pre-production status codes
• Scrub standard product catalog to eliminate pricing errors
• Expedite new customer credit approvals
• Increase visibility of long-lead items
• Standardize permitting process
• Identify key jurisdiction permitting contacts
• Provide building codes and standards training

Longer term, project management software was implemented to further improve the linkage (and communication) between upstream project management and downstream purchasing and manufacturing.

Operations engineering tools like Theory of Constraints and Lean Thinking are not just for factories.  When applied business processes, in this case the Sales Funnel, more money comes out and faster.  What’s not to like about that?

For more on this topic, click HERE for a great blog post with examples of effective sales funnels.

5S

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Lean thinking is not just for factories. 5S is an easy to implement process to organize any workplace. With a little pro bono coaching, my new friends at Holland Physical Therapy have completed their first 5S project. Here’s how we did it:

5S

We started out with this quick one-page lesson in 5S, the seven wastes, and Plan-Do-Check-Act. As you might expect from its name, 5S is a five-step process. It is a pathway to a clean, uncluttered, organized workplace reducing waste and improving productivity:

1) Sort
2) Set In Order
3) Shine
4) Standardize
5) Sustain

Introducing the seven wastes (defects, overproduction, transportation, waiting, inventory, motion, and over processing) sharpened the focus on waste reduction. Introducing the Plan-Do-Check-Act continuous improvement cycle reinforced 5S as on on-going, every day commitment, not a one-time event.

Next, with a shared understanding of terminology and principles, we did a quick walk through of the clinic. Five of the seven wastes seemed to apply the clinic’s lack of organization…we could not find examples of overproduction and over processing. Cleanliness was not an issue. However, the Holland Physical Therapy team was greatly concerned about not finding something when needed and the time wasted looking for it.

The cable column was selected as the initial application area.

We first sorted through the area and set aside what was not needed. Then we organized and labeled everything used at the cable column. Masking tape was used to temporarily identify parking spots for the many accessories. The team agreed to sustain the cable column 5S through an end of day tidy up: anything out of place would be put back to where it belongs. After a day or so, the team assessed the area, made improvements, and moved onto the next 5S application area. P-D-C-A.

5S Group Photo

Through 5S, the team at Holland Physical Therapy is on their way to better utilize their space and easily find what they need when they need it.

Checklists

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My motorsports hobby runs on checklists. Checklists provide three essential functions before and during a race weekend: communicate work instructions, provide visual confirmation, and increase my available bandwidth. That’s quite a bit from a few sheets of paper on clipboards!

Here are three of my most valuable checklists:

Race Weekend Packing List. It takes a lot of parts and tools to operate a race car, even a relatively simple one like a Formula Ford. The Race Weekend Packing List, of course, lists everything that is to be loaded into the trailer. Every race weekend is a little different, so an “Added Starters” section allows for flexibility: extra sun screen and Gatorade in July, sweat shirts and hot chocolate mix in October. The primary purpose of the Race Weekend Packing List is to ensure that nothing is forgotten. It is so much easier to check these boxes in the shop than to be at the race track without something!

Checklists

Lola T-540 Checklist. This comprehensive, three-page checklist organizes the preparation of the car. Unlike the Packing List, the Lola T-540 Checklist has multiple columns. In the shop, everything is checked off to ensure that the car is race ready. At the track, not every nut and bolt must be checked before each session. Line items that must be checked off (lug nuts, tire pressures, fuel, body fasteners, etc) are left blank, those not needing attention that session are hashed out. The work content in each column is different, reflecting required maintenance frequencies. Across the columns and down the rows, the Lola T-540 Checklist outlines the maintenance plan for the weekend and visually confirms the readiness of the car. This example from the FF50th took on quite a bit of rain…

Hewland Mk9 gear change with checklist

Hewland Mk9 Gear Change Checklist. Every so often, the decision is made to change gears at the race track. No need to panic. The long column of the left lists all the parts and supplies that will be needed. The other four columns outline the steps required to disassemble the gearbox, sub-assemble with the new gears, and then put the whole thing back together again. Included in the assembly instructions are torque specs and error-proofing steps. This checklist facilitates teamwork and provides detailed, sequenced work instructions, both very welcome when time is short. With an exploded drawing for reference, everything is under control.
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Can you use checklists in your plant, office, or clinic? Almost certainly. I use them in my day job, too. One that comes immediately to mind is the 30-question checklist I use to perform operations assessments. Here’s a quick checklist for checklists:

Do you need to ensure that essential items are not forgotten?
Do you need to ensure that critical tasks are not missed?
Do you need to provide detailed, sequenced work instructions?
Do you need to coordinate multiple people?
Do you need to know the status of work in process?

And how do checklists increase my available bandwidth? Thinking is done back at the shop. At the track, my team knows what to do, when to do it, and has the parts, tools, and supplies needed. A quick glance through the checklists and I know all is well. I can focus on driving the car. You will enjoy the peace of mind, too.

Want to learn more about checklists? Here’s a great book: The Checklist Manifesto by Atul Gawande.

Plant Rearrangement

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Plant Rearrangement Image 2

Successful companies are faced with significant challenges while moving up the growth curve. A plant rearrangement and/or relocation is often required to add capacity. It is a big undertaking to move everything and everybody while maintaining production. Here are three tips for a successful plant rearrangement:

Plan and communicate. A complete plant layout of the “new” plant is essential. Better to find out that there is not room for everything in AutoCAD than after the physical moves have begun. A Gantt chart to document move sequence and timing is equally essential. Again, it is better to have thought through the move sequence before getting painted into a corner. To obtain buy in, allow time in the planning process to socialize the new plant layout and timing plan. The more input, the better.

Identify risks. Effective project management mitigates risk.  Besides moving equipment and people around, what else must happen for the plant rearrangement to be successful? Integrate these parallel actions into your Gantt chart. Is a key supplier’s JIT/JIS implementation aligned with the plant rearrangement timing plan? It won’t be unless that risk is actively managed.

Extra Floor Space Image

Provide slack. A little slack in floor space, people, and time will minimize problems. Extra floor space will reduce the (inevitable?) probability of moving something twice. If new equipment is coming in, a staging area (whether in the plant or at a nearby warehouse) will be required. Overtime will be needed to build ahead before production cells are moved. Build some slack time into the Gantt chart to absorb delays and the otherwise unexpected. Bringing in an experienced project manager can provide the fractional leadership to pull everything together.

Managing projects, big and small, is a big part of my day job as a Professional Engineer.  Visit my Project Management page for methods and case studies.

Plant Rearrangement

Slide Rule

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I found my slide rule the other day while moving into my new home office. While made obsolete by hand-held calculators, a slide rule still teaches a valuable lesson in precision, or more specifically, false precision in the digital age.

Slide Rule

Divide 4 by 7 on a calculator, your smartphone, or in Excel and something like 0.57142857 will be returned. Now, perform the same operation on a slide rule, and (after some squeezing and squinting) 0.572 will be returned. Wow…the digital age is so much more precise!

Not so fast. Granted, the calculator returns more decimal places but the answer may or may not be more precise. How can that be? Good engineering practice is to express results to the same number of significant digits as the measured value with the least number of significant digits. Since it is unlikely that both our “4” and “7” were measured out to 9 decimal places, the digital age’s greater precision is an illusion.

Excel formulas to truncate significant digits are tricky and I don’t know anyone who uses them. Even so, we can all easily limit decimal points to something more reasonable than nine places.  The slide rule jockeys of the 1960’s had it right: they put a man on the moon to three significant digits.

So that’s the lesson on precision. Curious as to how a slide rule works?

slide rule calculator PC

Slide rules are based on base 10 logarithms. A logarithm is the power to which a number must be raised to equal another number. The base 10 logarithm of 100 is 2 because it takes exactly 2 tens (10 x 10) to equal 100. Adding the logarithms of two numbers is the same as multiplying the two numbers. Similarly, subtracting logarithms is the same as dividing one number by another. By sliding the scales and cursor relative to each other, logarithms are added or subtracted to perform multiplication and division.

A slide rule can also calculate square roots, cube roots, sines, tangents, etc. If I remember correctly, I did not use my slide rule for the trig functions. I looked them up in tables like this one from my CRC Standard Mathematical Tables, a reference book full of way too much information. Calculators are much easier!

CRC Trig Tables

Here’s a link to an NPR article on slide rules including a demo:

https://www.npr.org/sections/ed/2014/10/22/356937347/the-slide-rule-a-computing-device-that-put-a-man-on-the-moon

In my day job as a Professional Engineer, I don’t use a slide rule anymore, but I still crunch quite a few numbers.  Please feel welcome to visit my Operations Engineering page for overview of frequently used methods and some case studies.