Increasing productivity and achieving more from existing resources is a challenge every Business Manager faces and will be addressed in this Productivity Journey Reference Guide.
- In supply chain logistics businesses, such as Forwarders, significant operational effort is directed at processing surging data loads rapidly
- In service businesses, such as Accountants, significant operational effort is directed at gathering and manipulating data for taxation compliance
- In manufacturing businesses, such as Sheet Metal Shops, significant operational effort is directed at creating product to match client specifications (data)
Some businesses manage, track and process jobs (especially in supply chains) where there is a lot of productive capacity consumed by data entry and the checking and correcting of data errors.
Some businesses manage teams where a lot of capacity is lost due to workflow practices that are not visible.
Whilst other businesses manage complex operational flows where a lot of the productive capacity is lost due to the dependencies within the flows.
Use the table of contents below to navigate through the guide:
- The Management Dilemma the Productivity Journey solves
- The Maturity Model
- The 9 Phases of Productivity
- Productivity Journey Application examples
- Why should I embark on a Productivity Journey?
THE MANAGEMENT DILEMMA THE PRODUCTIVITY JOURNEY SOLVES
Business are frequently caught in the problem of granting local accountability yet wanting Managers to behave for the global good of the business. It seems unavoidable that to grow the business we, as individuals, will run out of capacity and must start delegating to others. With further growth comes further delegations until we end up with a structure consisting of Senior Management, Departmental Management and Functional Management. As having everyone managing everything is ineffective we split roles and accountabilities. Naturally our people respond by seeking ways to make the functions / people they are accountable for function the best they can.
That’s all great except the business also acquires an operational flow that crosses over departmental boundaries and results in cross departmental problems “What optimises my area does not necessarily optimise your area”
The sum of the individual gains does not equal system gains
PRODUCTIVITY MATURITY MODEL
The Productivity Maturity Model guides Managers to pick, choose and stack the gains of the different approaches. The Productivity Maturity Model also allows Managers to plan with high leverage the next productivity gains they will achieve. The maturity model represents a systematic way to manage your own Productivity Journey.
9 PHASES OF PRODUCTIVITY
Businesses develop and mature, similarly to the concept of a child growing up. As a business matures it is able to achieve new heights in productivity, the people in the business gain additional experience and find new ways to leverage their time.
The codification of businesses maturing is the 9 Phases of Productivity and the maturity model. There are step changes in business leverage. Step changes that occur when the business discovers an answer to the question “How do I get more from my business without hiring more people?”
Phase One - Manual
This is the starting point on the productivity journey. It’s not ideal, but it does the job. Chances are that you know you can do more, deliver more value to your customers, make your people more effective or use your software better. The hard part is working out what ‘better’ looks like and how to get there. The trick is to never get complacent with where you are now, just ask what is the next small step I can take.
Phase Two is about getting rid of the paper and getting the work into a computer system. No more printing out stacks of paper for a single job. The job along with all its details are stored in the system. Even documents relating to the job are attached electronically.
Phase Three - Enterprise Integration
Now that the business has been computerized (Phase Two), it’s time to get the most out of that system. This is achieved by being more efficient in the way data is stored, shared and used.
The first step is to eliminate data re-keying as much as possible. Data should be entered only once and then be available to all departments which may need it. Data re-keying is time consuming and serves no productive outcome, making it a big waste of time and money. It also increases risks, with every re-entry providing an opportunity for an error. Compounding the risk is peoples’ tendency to take less care when it’s the 3rd, 4th, or 10th time entering the same data.
Phase Four is much like Phase Three, but the network is widened. Instead of making data easily accessible to other departments, the accessibility is extended to other businesses, both up and down the supply chain. This should not be a one-way street, ideally customers and suppliers will share data with each other, providing more visibility and productivity to everyone.
Phase Five - Workflow
Implementing Phase 5 means the process itself is recorded in the system in the form of Standard Operating Procedures (SOPs). All jobs contain a series of steps/progress markers (essentially a to-do list) which can be easily followed and updated by all staff members. This allows the same process to be followed job to job, regardless of who completes the job.
Phase Six - Workflow Automation
This phase is all about using automation to improve and streamline workflow management. There are two
- Workflow management reacts to changes and divergences in the environment by updating the job to incorporate a more appropriate SOP.
- The system completes actions that previously required a human, such as updating job information or status, monitoring jobs, and sending information to external parties.
This phase is all about getting more control over your workload. In Phase 5 and 6 you removed a lot of wasted capacity by standardising and automating much of your work. However, there is a limit to this, you still have people who need to complete process steps in order to deliver value to customers. Phase 7 and 8 are about accelerating what cannot be eliminated or automated. It is a fine tuning of your workflow system to get even more reliability and productivity.
Phase Eight - Buffer Management
Taking advantage of the increased visibility of the previous phases, Phase 8 can be summed up as identifying and developing the right behaviours across the business to avoid excess risk. These behaviours support both long term and short term increases in productivity.
Phase Nine - Work Mix Management
- Increase price, difficult to do
- Increase volume, difficult to find more customers
- Reduce direct costs (Raw materials, carrier charges etc), difficult to do
- Change product mix in favour of products that deliver more margin, faster. Whilst difficult, it is a degree easier than 1 to 3 above
PRODUCTIVITY JOURNEY APPLICATION EXAMPLES:
Freight Forwarding application
"Like most freight forwarders Mainfreight has always sought out ways to improve the efficiency of our operations. This is a continuing process that will never end.
The promise of the visualization of where shipments were in the process life-cycle and the ability to see possible problems before they escalated was the challenge we took on… The ability to seamlessly build a workflow that covers the life-cycle of a freight movement that is handled by multiple areas of our business has helped smooth the workload and avoid large peaks and troughs.
We are continually looking at ways to improve and we are using the tools to help highlight bottlenecks, constraints and possible problems. As we move forward we see this solution continuing to help us improve and fine tune our systems so we can deliver a quality service to our customers in the most efficient and productive way.
Business Solutions and Process Manager, Mainfreight"
Manufacturing industry application
"We were about to turn on a new ERP system, we had spent a fortune on it, and it was state of the art – the best system we could buy, but it was a planning system and we couldn’t understand how we could get it to work in an environment as variable as our factory. We had all the problems of breakdowns, absenteeism, running out of materials, all of the things that trip up the rigid plan that our ERP system would produce.
The Drum, Buffer, Rope theory of TOC (Theory of Constraints) was our saviour.
It recognized and helped us manage the variability, and focused us where we needed to focus. It is just the start of a journey that is giving us the ability to continually raise our aspirations. What did these mean for us in numbers? A 20% lift in output and sales this year, in what is considered a mature business.
CEO, AW Fraser Ltd"
Consulting IT Services application
"Whilst the will and the passion were present in the company, and we were getting good feedback from clients, we knew we could do better. The systems and procedures we were using did not give us the visibility to make day to day decisions on resourcing and escalation.
Because we [now] have fewer fires to fight, we have been able to focus on how we deliver improved IT services to existing and new clients.
So, what has this meant for our clients?
- Improved scheduling of resources for projects and reduced lead time on delivery
- A significant and consistent improvement in delivery times for fault resolution, small jobs and projects
- An increased level of pro-active communication from us
- Outside the square, cost effective solutions
Business Development Manager , CommArc Consulting Limited"
Projects application – Critical Chain Project Management
The home construction industry is notorious for missing due dates, cost overruns, quality compromises, frequently upset and distressed customers, frustrated and dissatisfied sub-contractors, poor profitability, poor cash flow and poor reputation. Kevin wanted to enjoy building homes again, have happy customers and make a success out of the business.
A necessary condition for the project “get go” and ongoing success was gaining consensus from all the trade contractors to operate in ways they have never thought possible in the construction industry. For instance, the subcontractors all have helped “crash” the estimated lead times for their own respective tasks and have since stuck to them!!! And sub-contractors are not getting “screwed” down on price.
Regional Council application – resource consenting
"The challenge is to prepare a consent within the 20 statutory days. There are many jobs in progress, which means priorities can be difficult to manage. The Consent processing requires support from other teams, but they have their own priorities. The working environment is highly interruptive.
We now have a visible flow mechanism, such that we can see where people are overloaded and where stoppages are occurring. We have changed process so it makes jobs harder to stop once started. Our remote offices are more connected to our main office. We have more jobs being completed over less time. That is a very good win for us.
Resource Manager Procedures and Protocols, Otago Regional Council"
"Our planning and forward thinking became clearer once we had a process to work in. That process was challenging, but well worthwhile. Without it, our planning would be cumbersome and slow.
Transport Policy, Otago Regional Council"
WHY SHOULD I EMBARK ON A PRODUCTIVITY JOURNEY?
If you want gains from your business to capture a competitive advantage, or simply to maximise the performance of your business and you have limited resources (both people and time) then a Productivity Journey will be of value to you.
- An accelerated improvement programme
- Measurable gains translating into measurable return on investment
- A clear strategy for communicating with stakeholders
- Improvements that reach across your entire company rather than just within one department
- A commercial effect based method to assessing improvement projects for investment
- An enhanced ability to know when it is safe to cut a project short and to move the resources on
For more information on the 9 Phases of Productivity download our FREE eBook below
If you are seeking information to support your own efforts to improve then subscribe to our productivity blog
If you are seeking to accelerate your internal improvement efforts then contact us for a consulting day. We are happy to provide you guidance and act as a mentor.