Waste-Added Tax (WAT) – how much are you paying?

Waste-Added Tax

Waste-Added Tax

Every activity that doesn’t add Value for the Customer costs you money. Money that increases cost, reduces margin and makes you vulnerable to leaner competitors.

It’s the tax that you pay for inertia and inefficiency. And it’s the tax that keeps on taking. Every day that you aren’t implementing Lean. Every day that you lose focus on improvement. Every day that you keep on doing what you’ve always done.

With labour and materials costs continuing to rise, and customers wanting price reductions, it’s the tax that you must avoid. In fact, reducing Waste-Added Tax should be part of everyone’s daily activities.

Here’s a suggestion: show WAT as a line in your Management Accounts. Measure it, publish it, hold people accountable, set targets and apply your problem-solving process to reducing it.

 

Better, Cheaper, Faster – myth or fact?

I regularly meet people in manufacturing who still see life as full of trade-offs and compromises. “There’s no such thing as perfect”. “If it goes any faster, it’ll break down”. “We can get better material but they won’t pay for it!”. “if we turn up the speed, we’ll get more rejects”.  “If you pay peanuts, you get monkeys”. “We make the best, so we have to charge top dollar for it”. “We might be able to do it faster, but it’ll cost you!”.

Any of these phrases sound familiar? I’ve spent my whole working life listening to them. And I don’t believe any of them. Let me tell you why…

From the day we’re born, our reptile brains are hard-wired to learn about cause and effect. “Cry – get fed”. “Touch the stove – get burned”. As human beings, we’re very good at seeing these links. So good in fact that we can see links that don’t exist! And soon, many of these false links come to be accepted as true.

“You only use 10% of your brain”, “Alcohol helps you sleep” “Humans lose most of their body heat throgh their heads”. Common knowledge? Common myths, in fact.

And the moral of the story? If you’re serious about making step changes in your manufacturing performance, start with your own myth-busting. Challenge preconceptions, focus on the facts and run some experiments. Change the dialogue – “Where’s the data?”, “What’s the evidence?”, “Show me the facts”, “Humour me – let’s try it.” Many’s the time I’ve seen a machine run faster with absolutely no decrease in quality at all.

So what’s your own experience – and which myths have you helped to bust?

QCD - Quality, Cost and Delivery

QCD

 

So what is Continuous Improvement then?

Earlier this week a colleague and I were grumbling about all of the jargon and acronyms around Lean and CI, and a general lack of plain English. “So what’s CI then?” asked another member of our group. Cue two red faces. Here were our attempts at explaining what Continuous Improvement is about:

“It’s about following the improvement cycle – Plan, Do, Check, Act. First, Plan what it is that you want to improve and why. Second, have a go – Do it! Thirdly, step back and Check how it went. Fourth, decide what worked and what didn’t, and take further Action as required. Finally, keep on going through the cycle until you get the results you want.”

“Make sure the team understands exactly what they want to improve and why. What will success look like, how will they measure it, and how will they go about it? Then put the plan into action – try it; experiment! Review what happened. If you like the results, keep at it – “lock in” the new “Best Way” through training, standard procedures, etc. If you didn’t get the outcome you planned for, what have you learned and what will you do differently next time? Make some changes, and plan your next approach. Keep at it until you get the results you want.”

So – how would you explain “CI” in plain English?

PDCA

The Improvement Cycle

 

Job Opportunity – Operations Manager (Manufacturing) – Norfolk, UK

GT Bunning & Sons Ltd. is a well-established, growing and profitable manufacturer of Manure Spreaders and Pallet Inverters, employing 80 people and exporting to more than 35 countries around the world.  Since its origins as a blacksmith’s forge, the Company has built an enviable reputation for the quality and robustness of its products, its aftersales support and the integration of new technology.

The business is in a period of strong growth and is looking to appoint a change-oriented Operations Manager to join the team and help take the company to the next level.

Reporting directly to the Managing Director you will be responsible for organising and improving the production of the full product range, meeting ever-increasing customer demands and introducing new, more effective ways of working.

The successful candidate will have proven experience as an Operations / Production Manager working in a similar environment of engineering batch or discrete production, and fully conversant with modern manufacturing techniques.  Able to understand and interpret fabrication and assembly drawings, you will have a track record of implementing and leading major change in a comparable environment.

Of graduate calibre and experienced in working in a business with turnover in excess of £5m per annum, you will also have strong critical thinking and problem-solving skills, sound financial understanding and the commercial acumen to contribute to our senior team. Strong leadership skills are essential, and success in this highly visible new role can lead to further progression within the business.

Please DO NOT contact this blog but apply direct via Indeed.com –

https://www.indeed.co.uk/jobs?q=gt%20bunning&l=norfolk&vjk=e0f14d60f59e4620

Japanese Manufacturing Techniques – the early days of Lean in the UK

In the late ’80’s I was fortunate to join a very fast-growing electronics company that was one of the first UK manufacturers to adopt what was then known as “Just-in-Time Production”. I was employed as Materials Manager to implement a new MRPII system and to introduce Just-in-Time supply to a reduced supplier base. The concept of “Lean” was not then known, and the main focus of business improvement activities was around Total Quality Control, Zero Defects and Quality Circles.

One of the very few English language books available at the time was Richard J. Sconberger’s Japanese Manufacturing Techniques, first published in 1982, and still on my bookshelf. Even the title of the book shows that the main focus then was simply to copy what were thought to be the main techniques of successful Japanese manufacturers. In fact, each of the book’s nine chapters deals with one of these “techniques”.  Chapter 4 in particular indicates this thinking: “The Debut of Just-in-Time Production in the United States. Lesson 4: Culture is no obstacle; techniques can change behaviour”

Sadly, this view still persists to this day with some manufacturers. They still see “Lean” – as we now call it – simply as a set of tools and techniques to be learned and applied. Not surprisingly this narrow approach rapidly leads to disappointment and then a search for the next “initiative”.

Over the last 30 years we’ve come to realise that Lean is a company-wide philosophy that requires strong Leadership at all levels, a respect for people and a willingness always to look for a better way. Yes, the right tools and techniques are important, but there’s much, much more to Continuous Improvement than tools and techniques.

If you’d like to share your own experiences of “Just-in-Time” and Lean, please register and comment. And if you’d like some help with your own Lean journey, please email me at Andrew.Nicholson@ImproveMyFactory.com

QCD is out of date – you need CxVAR

For decades now manufacturers have measured their performance in terms of Quality, Cost and Delivery. These days that’s no longer good enough. If you really want to raise your game here are some measures you need to be thinking about:

Cx – Customer Experience. The customer’s total life-time experience of your products, services and brand. Think customer journeys, Net Promoter Score, Fault-Free Years in Service and the like. Talk with them, partner with them, have the difficult conversations, grow old together.

Value-Add. This goes to the heart of what manufacturing is all about – taking a whole load of inputs and resources and turning them into something more valuable. Value-add per employee is a critical measure of productivity. At the plant level, it’s one of the “critical few” measures, and at a national level increasing productivity is the only real way to improve living standards.

Responsiveness. Simply delivering a product “on time” (which date exactly?) doesn’t really cut it. How agile and responsive are you to customer needs? Do you know exactly what’s important to your customer? Can you flex volumes, delivery times and specifications? Do you need to offer guaranteed lead-times, short lead-times or both?

If you’d like an up-to-date, independent review of your KPI’s and objectives, contact Andrew.Nicholson@ImproveMyFactory.com

Being Busy and Being Efficient – What you Need to Do When

We’re all aware of the “Busy Fools” syndrome – high output, high costs, high stress, and high risk. When you’re up to your neck in alligators it’s tempting to just keep ploughing on, Head down, bottom up, you know that you’re wasting time and money but you hope for the day when everything “quietens down” and “gets back to normal”.

If customer service deteriorates, this might be self-fulfilling. An IT industry insider once described to me the typical cycle of a high-growth IT business – rapid growth leads to poor service, which slows growth. Service improves, the company grows, service declines, ….. and so the cycle continues.

If we can avoid this decline in service levels then we’ll need to accept that things won’t just “quieten down” and that “busy” has become the new “normal”. So we need to know what to do about it.

And businesses who are “Quiet” and “Efficient” also need to have effective strategies.

That’s why some years ago we developed this simple “Busy” / “Lean” Grid, to help business leaders understand where their business is, and what they need to do about it. Let’s have a look at each of the four quadrants:

  1. “Busy and Inefficient” – the “Busy Fools” scenario. The busier we are, the less efficient we become. Stress levels increase, service declines and productivity tails off. One of our biggest challenges (as a management consultancy and training organisation) is in persuading prospective clients to stop chopping down trees and spend some time sharpening the axe! In this situation very few business leaders have the courage to make everyone “down tools” for a week to transform the way they operate, so we need to find another way. The solution is to spend a couple of hours training staff to identify the main sources of wasted time and effort, to generate improvement actions, and to implement a prioritised improvement action plan. Pretty soon, productivity increases, stress levels are reduced and morale improves.
  2. Quiet and Inefficient” – the “About to go out of business” scenario. At this point, massive action is needed to turn around the company’s fortunes. Sales, service and efficiency all need to increase – often with little or no investment available. Fresh thinking is required, often driven by new Leadership.
  3. “Quiet and Efficient” – the “All dressed up with nowhere to go” scenario. Being Lean is all about adding value and eliminating waste. Many organisations like eliminating waste but far too few focus on increasing the “value-add”. If you find yourself in this situation then you need to get close to your customers, understand exactly what they value and are prepared to pay for, and find more and more ways of providing this. As part of our work with clients in this quadrant we focus on VAST – Value-Added Sales Techniques. In the longer term, this needs to become part of effective Supply Chain management.
  4. “Busy and Lean” – the “making it look easy” scenario, where most of our clients are! When you’ve truly embedded Lean thinking and Continuous Improvement, the rewards are very clear. Even in a recession, sales increase, margins improve and people still find time to make this month better and more efficient than last month. These World Class organisations invest broadly across the business, they innovate their products and processes, they look to inspire their employees and stakeholders and they understand “why” they do what they do.

Whichever quadrant your business is in, if you’re keen to improve contact info@NicholsonConsultancy.com. We can help you add value, reduce costs, and “work smarter not harder” – all at the same time!

How to break out of the “Too Busy to Improve” trap

Once you’re up and running with Lean and Continuous Improvement, you’re in the “virtuous circle” where you’re continuously becoming more efficient, saving more time, and investing some of that time in becoming even more efficient.

But if you’re very busy and you haven’t yet started your Lean journey, what do you do?

The biggest danger to avoid is just to “wait until things quieten down”. This approach can be self-fulfilling – but not in a good way! If you don’t improve then the downside of “being busy” can be longer lead times, higher costs and reduced performance. All of which can lead to a permanent – sometimes fatal – reduction in business as customers go elsewhere. This is often called the “busy fool” approach – putting in more and more effort, but getting back less and less benefit.

Instead, you need to get started on the virtuous circle by finding ways to “force in” about 10% of additional time and resource “up front”.

To do this, you need to do a bit more of the things you always do to increase your capacity: work some short-time overtime, cut back on time-consuming unprofitable work, bring in additional labour, contract out some of the workload, reschedule low-priority work, etc, etc.

And then you use some of that time to provide some short, sharp awareness training about Lean, non-value-added activities and the Eight Wastes. People will soon identify where the problems are, and come up with improvement ideas. Then you help the teams to prioritise their ideas and implement them. Focus first on improvements that save time and make the job easier. In no time, you’ll start getting some “quick wins”. Productivity increases, morale improves and people start to smile again.

Pretty soon, you’ll experience the unusual sensation of having time to actually stand back and think. And then you realise that the virtuous circle has begun….

If you want help to break out of your own “Too Busy Improve” trap, contact Andrew.Nicholson@ImproveMyFactory.com. Pretty soon, you’ll be getting better results with less effort. And who knows, you might even start to enjoy work and live longer!

Why your Manufacturing company needs an Inbound Marketing Strategy

Written by Gemma Rogers  |  27, July, 2017

There is no escaping the fact that there has been a seismic shift in the way customers buy, and the manufacturing industry is no exception. Research shows nearly 90 per cent of B2B buyers begin by doing their own research online.

Manufacturers can no longer rely on a direct or distributor sales force to generate growth. Traditional sales and marketing tactics, such as print advertising, trade shows and cold calling don’t work like they used to. It is also difficult to calculate the ROI of such methods for manufacturing companies with typically long sales cycles. The famous quote: “I know that half the money I spend on advertising is wasted. My only problem is that I don’t know which half” rings very true. In an industry which relies heavily on measurability of processes and systems, this is something of a discord.

Some of the more modern marketing methods such as online paid advertising and pay-per-click promotion, while 100% measurable, only offer a short-term solution; the minute you stop pumping money into a PPC campaign the lead flow stops.

You need a different approach, and adopting an inbound marketing strategy could be the answer.

Why Inbound is the perfect fit for Manufacturers

Sales need to position themselves more as advisors; providing informative and educational information to assist buyers in their decision-making process. Information that goes beyond what can be found online; that adds value, that addresses buyers’ needs, aspirations and fears. Only then can you begin to gain a buyer’s trust.

An inbound approach to sales and marketing focuses on creating relevant, high-quality content that pulls people to your company, attracting traffic that you can convert to leads and close to sales over time. So, it’s perfect for the longer sales cycles associated with manufacturing. After all, long and complex sales cycles require strong relationships.

With an inbound strategy, you build a baseline to measure future progress more accurately – and specific, measurable and attainable goals. These goals inform the tactics you’ll need to achieve these outcomes.

Follow these seven steps to develop your Inbound Marketing Strategy

1. Establish a baseline audit, goals and timelines

A strong, successful inbound marketing strategy should be based on clear business goals. In your manufacturing company, you probably rely on production forecasts based on sales figures to determine how much product to produce? You understand the importance of measuring your processes and systems? Well, your marketing should not be the exception.

To start measuring your marketing, you need to conduct a comprehensive baseline audit. Questions to consider are: how much monthly traffic does your website currently generate? How many visitors convert to leads? How many leads convert to customers, for example.

2. Explore your competitive landscape

In this new digital era, it is relatively easy to conduct research on your competitors and measure how you stack up. How many followers on social media do they have, and how active are they? Can you learn anything from their content – what offers do they have? How does their website compare to yours, not only in look and feel but also in performance?

Two useful tools for conducting this research are Website Grader and SEMrush.

3. Brand messaging and positioning

This is an area that can help manufacturers stand out from the crowd. Many businesses still think a brand is about logos and colour choices. But it goes much deeper than that. You need to dig deep and develop a core message that your customers relate to, that demonstrates who you are and what you stand for, and that stands you apart from the competition.

4. Define your Buyer Persona and Buyer’s Journey

To be able to create content that resonates with your customers, it is essential you first understand who your customers are. Buyer personas are representations of your target customers based on real-world information and educated guesses. Their likes, dislikes, habits, behaviours, motivations and concerns, as well as their job function, where they spend time online, decision criteria, and more.

Even if you only manufacture one product, you are still likely to have more than one persona. For example, the marketing or purchasing department is likely to be researching on the C-suites behalf, and both groups may have an influence on the final decision.

If you have a complex and varied product offering, you may have several personas that represent the different verticals you sell into. If your sales process relies on distributors, you may consider developing personas for both the distributors and the end customers.

The best way to define personas is to include as many of your key personnel as possible in the process. Devise and circulate questionnaires and once the responses are collated, organise a brainstorming session with your team to define your final personas and then circulate the final versions to all of your staff.

5. Establish a foundation for content creation

Inbound marketing cannot work without content. With typically long sales cycles in manufacturing, developing well-considered content at each step throughout the sales funnel enables you to develop multiple touch points with prospects, keeping you front of mind as they conduct their research.

Is your content well balanced, covering topics for each stage of the buyer’s journey? And is there a variety of formats? Not everyone has the time or patience for eBooks. Have you considered other formats such as quick guides, blogs, video and infographics?

Develop a content plan that plugs any gaps in your content offering, ensuring that you are writing with a persona in mind at all times. Identifying existing resource and potential budget for outsourcing here is important as content creation can be a challenge. Do you need to recruit someone, or possibly hire the services of a content writer?

6. Exploring optimal website performance

This is another area where many manufacturers fall down. It is not enough to have a visually appealing website or an online catalogue of your products. Your website needs to be about your customers, not your services, features and benefits.

In order to rank highly on Google there are some fundamental basics your content must include, such as keywords, H1 titles, meta descriptions and title tags. Your website must also be responsive and optimised for mobile, have sound security, a fast page load time, to name just a few.

By considering a platform such as HubSpot, you can take your website to a whole new level by using smart content. The smart content functionality in the HubSpot platform is a powerful tool that enables intelligent personalisation by data segmentation, device, location, persona type and lifecycle stage.

7. Close the loop with inbound sales enablement

Inbound marketing will generate new leads for your business, but the way in which your sales people deal with these new inbound leads may need to adapt. An inbound lead is more informed and more qualified than an outbound lead.

The final step of the inbound marketing strategy is to conduct an audit of your current sales process and look for areas of improvement. This could include reviewing your sales literature, product brochures, pricing guides. An alignment between sales and marketing is needed to ensure your marketing provides relevant content and enables Sales to focus on the prospects in their pipeline that will close.

Platforms such as HubSpot enable Sales to use event-triggered technology to spot the signs that someone is ready to buy and spend time with the right prospects.

Marketing teams can provide email templates for salespeople to use, and tools such as sequencing can automate follow up emails, so salespeople no longer need to keep track of follow-up with prospects.

Most modern CRM systems can record email correspondence and calls and log activity reducing the need for manual data entry.

By following these steps, you will build a strong inbound marketing strategy for your manufacturing company. Implementing an inbound strategy will help you to reach more of the right people, at the right time, on their terms. It will create a clear structure for your sales and marketing efforts from which you can build a strong inbound marketing foundation for your organisati

Written by Gemma Rogers

Gemma brings over 15 years experience in sales and marketing across a wide range of industry sectors, from large multinationals to small start-up businesses. Her passions are inbound marketing and inbound sales, creating unique and memorable websites and campaigns to engage and delight potential clients and customers alike.

A quick way to prioritise improvement ideas and suggestions

If you’re swamped with improvement ideas and suggestions, here’s a quick team-based approach to prioritising them – Ease and Effect:

  • Write each idea on a sticky note
  • In turn, read out / explain to the team each improvement idea
  • For each idea, first ask the team “How Easy do we think it would be to implement this idea?” Get the team to reach consensus on this – “Easy”, “Medium” or “Difficult”
  • Secondly, ask the team “If we did it, how much impact or Effect would this idea have?” Get the team to reach consensus on this – “High”, “Medium” or “Low”
  • Use a flipchart sheet or large piece of paper and draw out a 3 x 3 Ease and Effect Grid. Use the vertical for “Ease” and split this into the three categories  “Easy”, Medium” and Difficult. Use the horizontal for “Effect” and split this into the three categories “High”, “Medium” and “Low”.
  • After each idea has been reviewed and ranked, place the sticky note in one of the nine boxes, based on its “Ease” and “Effect” rating.
  • Prioritise the ideas based on the following ranking:
  1. Easy to do, with High Effect
  2. Easy to do, with Medium Effect
  3. Medium to do, with High Effect

Keep track of progress using a simple traffic light (RAG) system – ideas that you haven’t yet started are coloured Red, ideas that you’re currently working on are coloured Amber and ideas that have been completed are colured Green.

 

 

 

 

 

 

You can download a copy of the Ease and Effect Grid (and lots of other useful stuff) here: http://www.nicholsonconsultancy.com/free-downloads/

And if you’d like some help in running your own Ease and Effect sessions, contact Andrew.Nicholson@ImproveMyFactory.com