Steve Beeler

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

Theory of Constraints

COVID-19 Toolkit

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COVID-19 Toolkit“Adapt or perish.” This H.G. Wells quote captures perfectly today’s business environment. So much has changed so quickly. COVID-19 is affecting everything, everybody, everywhere. From six of my blog posts, here is a post COVID-19 toolkit to adapt your business to today’s new operational challenges:

SQDCME. There is just so much to do. When things are hectic, SQDCME prioritizes competing objectives and provides focus on the vital few: Safety, Quality, Delivery, Cost, Morale, and Environment.

Managing by Walking Around Quality Audit. People have changed seats. Many are now working from home. In just ten questions, you can quickly verify that your quality system is still functioning.

Business Process Mapping. Business processes are being re-engineered for a suddenly remote world. Process mapping answers questions about what actually happens inside your company. As such, it is an excellent tool for designing robust processes and communicating changes.

5-Step Throughput Improvement Model. Customer order patterns have changed and your internal operational constraints have moved. Here’s a quick refresher on Theory of Constraints and Goldratt’s 5-step throughput improvement model…how to find and break bottlenecks.

Sales Funnel. Is your constraint now outside the four walls of your plant? This blog combines business process mapping, Theory of Constraints, and Lean Thinking to improve the throughput of your sales funnel.

8D Team Oriented Problem Solving. An 8D is a simple but structured problem solving method that reinforces team work, encourages a bias for action, and delivers robust and permanent solutions across organizational boundaries.

Six great tools and methods to better equip you and your team for post COVID-19 challenges. Please feel welcome to put them to use. Adapt, don’t perish. 🙂

Pro Bono Help

The COVID-19 business contraction feels more severe than the credit crunch ten plus years ago. For me, that likely means not much in the way of new projects for the next six months or longer.

I will be fine. The kids are through college and my retirement is funded. But for those who work to provide for their families, the ramifications of COVID-19 are unthinkable.

Need some help with this post COVID-19 toolkit? Don’t hesitate to reach out.

Pro bono, I am offering my time to those struggling operationally to get their businesses going again. Quality, delivery, and cost solutions. Business processes for a newly remote world. Project management. A fresh eyes look. There is no reason for me to be sitting at home while small businesses are going under and jobs are disappearing.

If you are a neighbor along the Lake Michigan shoreline, here’s the link to the Michigan West Coast Chamber of Commerce COVID-19 Business Toolkit for government agency contacts, general business resources,  best practices, etc.

Stay safe!

Steve Beeler

Business Process Mapping

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Business process mapping answers the who, where, when, and how questions about what actually happens inside your company. They can range from relatively narrow questions (how are credit applications approved?) to more comprehensive questions (how is a customer enquiry turned into a factory work order?)

business process mapping

While a business process can be complicated, business process mapping itself is straightforward. Here’s how:

Only three elements are required:

(1) A box captures a process step. A typical business process will have dozens or more steps from start to finish. Write process steps in a “do something” format (“Review Credit Application”).

(2) A diamond captures a decision point. They are often written as questions (“Credit Approved?” or “OK?”). Yes goes one way, no goes another. Diamonds are very important as they are often the start of rework loops. In our credit approval example, an incomplete credit application (a quality defect) will have to be sent back for missing information, a waste of both time and money.

(3) A triangle captures inventory. In our credit approval example, there is a queue of applications (electronic or paper) ahead of the analyst. Where inventory collects in a business process is a great clue as to where the constraint (bottleneck) resides. Break the bottleneck, and the throughput of the entire business process is improved.

Connect these elements in process logic and you have a business process map. A brainstorm session with sticky notes on a white board is a great way to get started. Map your existing process first. Take a picture with your cell phone…this is your current state process. Now for the continuous improvement. Experiment (move things around, add or delete steps, change approval authorizations, change acceptance levels, etc) until you have a nimble and robust business process.

As an example of business process mapping, here is a redacted portion of the upstream “sales funnel” for a manufacturer of custom products:

Sales Funnel map

Business process mapping is a great training aide. There is no better way to visualize how a new employee’s roles and responsibilities fit into the bigger picture.

Need some help?  Click HERE for my contact page.

Sales Funnel

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The Sales Funnel is a core business development concept. 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 and rework:

• 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.

Theory of Constraints and Lean Thinking are not just for factories.  When applied to 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.

Great Books

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Great Books

After a crazy busy summer with the FF50th, I am finally moving into my home office. In addition to finding my slide rule, I have rediscovered so many great books! Here are three great books from my personal library:

The Goal

 

The Goal by Eliyahu Goldratt. The first book on Theory of Constraints. Very cleverly written as a novel, not as a text book. “In isolation yes, in combination no” is a lesson that I apply (successfully and profitably) over and over again.

Out of the Crisis

Out of the Crisis by W. Edwards Deming. Deming’s values and clear thinking provide timeless direction. Correctly categorizing variation (common cause vs special cause) keeps me out of a lot of trouble.

Getting to Yes

Getting to Yes by Roger Fisher and William Ury. This is a great book on how to get things done: focus on common interests, create win-win options, consider alternatives. Don’t leave home without a BATNA!

What great books are on your shelves?  Click on the GET IN TOUCH button below.

Variation and Waste

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Variation is at the root cause of almost all waste in manufacturing and business systems.  It is no coincidence then that variability reduction is the foundation for the Toyota Production System (Lean Thinking) and its success in continuously reducing waste.  Two games of chance with dice and cards illustrate the linkage between variation and waste.

The first game is a single piece flow system with five machines.  The output of each machine is represented by the total of two dice.

The average of two dice, of course, is 7.  However, our five-machine system only averages 4.3…a 38% loss!  Why?  Variation and waste.  In single piece flow, no machine can outproduce another.  Production is lost through waiting losses (blocks and starves) when the machines interact with each other.  Balanced and dependent systems are surprisingly common.  They never work as expected.  In isolation yes, in combination no is a key lesson from Theory of Constraints.

The second game is a system of three machines feeding an assembly area.  The output of each machine is represented by the draw from a deck of cards.  In order to assemble a product, all three cards must match.

Variation and Waste

Each machine is produces one card per time period.  Jokers represents a defective product and cannot be matched.  The decks are shuffled so the three output sequences are independent.

Variation and Waste

Quite a few cards collect (to the right of the decks) before there are matches for the assembly machine to assemble (to the left of the decks).  Work in process inventory (WIP) and lead time are horrendous.  Throughput suffers as the assembly area waits for matches.  In isolation, each machine is successfully producing cards.  In combination, the system is performing poorly.  Variation and waste again.  This time the variation is in sequence, but the waste is equally dramatic.

Variation and waste.  Not exactly like peanut butter and jelly.  While variation is always present, robust systems can be designed through discrete event simulation to minimize the linkage between variation and waste.