Lean Guy and Money Girl worked around each other, listened
to each other and other team managers talk about their current statuses and
issues in the Monday 8am meeting every week, but did not really connect the
dots between the results they were both trying to achieve individually. Sure, everyone has gone through the Intro to
Continuous Improvement training, the site was 99% compliant to that
target. And the site completes their
mandated “3 Kaizens per Year” target easily by the end of the second quarter
every year; we are number 1 in the company!
Sound familiar? While these goals and targets are not bad, do you know why they exist and the purpose they serve? We spend a considerable amount of time talking about activities that are value-added in a process, but how does this translate into increasing the value of the site or company?
Unless you work in a Lean Consulting company or write books,
being an improvement facilitator does not translate into a product that can be
traded or sold. You are in place to help
teams, individuals, and Leaders improve performance around the products or service they
create and not just in traditional manufacturing, but also support organizations that
provide information products. And if you
keep score of your achievements, like most of us do, you may use money as a
score. This can be achieved by removing
wasteful activities that decreases the different categories of labor in a
product thereby saving money, or by improving the quality of the process that
creates the product and avoids cost overruns.
One thing these have in common is the impact to the total cycle time;
that is from the time the order is placed until the payment is received.
When we think about the value of the company the common
definition is the sum of the net present values of all future and current cash
flows. Those cash flows are the results
of taking orders, buying material and labor, and delivering products and/or
services; total cycle time is the result of taking the difference between those
first and last dates. Reducing the total
cycle time can move future cash flows ahead (inflows) and increase the value of
the company. Reducing the non-value
added activities reduces expenses (outflows) and increases the value of the
company. Improving the quality from the
process reduces unplanned expenses (outflows) and increases the value of the
company.
With all the reviews and approvals and getting signatures and fixing the order amounts and providing status on deliveries and picking up lunch for the boss, when do we find the time to input new orders and collect revenue from our customers? When Lean Guy and Money Girl have a chat over coffee in the
break room, they find that their goals and objectives almost fit in a way where
they can help each other. Working
together, they construct a plan that moves the site forward faster and further. Isn't that what synergy is really about?
If they could find a way to bring in the Quality and
Purchasing Leaders into the discussion, then the plan can begin to have a
strategic flavor. What are the most
expensive defects from the suppliers that need the most help where expedite
charges eat up 35% of the budget? How
does this disrupt the flow when the parts are installed in the wrong sequence?
Some of us don't work on or support the manufacturing floor and in these cases you still must focus on the thing going through the process. Information products like quotes, reports, engineering drawings, marketing plans, patient information, and the like still go through a process. There are suppliers, internal customers, and external customer that have an expectation that what they receive is complete, correct, and on-time.
We all have our part to plan and play in with the products we touch. And everything is special, we all get it, and ultimately we have to connect the activities and performance characteristics to those products from order until delivery and payment. Money Girl can be a big help in making the important things happen. The faster the work flow, the sooner revenues can be used on the next project or reduce debt.
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