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Continuous Improvement

​STATE OF MIND

Sales and Operations Alignment (S&OP)

1/1/2017

1 Comment

 

Objective of S&OP

An integrated business management process through which the executive/leadership team continually achieves focus, alignment and synchronization among all functions of the organization.

Needing to include:
◦Updated Forecast that leads to
   ◦Sales Plan
   ◦Production Plan
   ◦Inventory Plan
   ◦Customer Lead Time (backlog) plan
   ◦New Product Development Plan
   ◦Strategic Initiative Plan
   ◦Financial Plan

​ S&OP is an Iterative Process (It is not static, it is continually being fine-tuned for the needs of the business):
◦A properly implemented S&OP process routinely reviews customer demand and supply resources and “re-plans” quantitatively across an agreed rolling horizon. The re-planning process focuses on changes from the previously agreed sales and operations plan, while it helps the management team to understand how the company achieved its current level of performance, its primary focus is on future actions and anticipated results.
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People Focus

PART 1

•CEO/MD Sponsorship

     •Imperative; Anything else will hobble any S&OP effort
•Appoint S&OP Champion
     •Change Manager:  Needs to report to CEO/MD and be outside of Sales, Operations             and Finance Structures to be unbiased and accepted
•Behavioral Coaching/Training
     •Necessary for all key participants to drive a collaborative environment.
     •Conflicts/Attitudes need to be brought to the surface and addressed.
•Involve All Teams
     •In the design and development phase of the enabling solutions and report definitions.       For Example: Granularity, Frequency, and Horizons Reporting need to be aligned and           agreed.
•Align Incentives
     •Review how performance is measured and rewarded.  KPI’s should be transparent and       agreed by all teams
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PART 2

•Conflict Resolution Process
     •Define and document and agreed conflict resolution process between teams which            covers tie-break rules in cases of limited availability of material, time, resources or funds.
•Transparency in Information and Communication
     •Everyone needs to be on-board if there are cases where Sales has more priority over         operations or vice versa.
•Restructure/Relocate teams if necessary
     •S&OP meetings need to be face-to-face between key stakeholders and participation           should be mandatory.  Sometimes, new roles may need to be defined and team                    structures changed to move toward a more collaborative environment
•Emphasis on Commercial and Operational Discipline
     •Minimize ad-hoc processes.  This usually comes from the top and the leaders of                   various functions will need to set examples so teams get the message.
•Document and Broadcast
    •Its essential to communicate and celebrate the successes and learnings from the S&OP       Process.  Also, track improvements/savings made as case studies to capture                         organizational journey.
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Process Focus: What Should be Discussed in S&OP Meetings?

Rule #1 for S&OP meetings: If there is no data/numbers to support it, it should not be discussed.  Opinion driven decisions will cause more problems than solve*

​•Historical Performance Analysis
•Review Planning Criteria
•Review Demand Plan (14 to 52 week horizon)
•Review Supply/Production Plans
•Review Inventory and Customer Service
•Continuous Improvement Plans and Initiatives
•S&OP Actions and Next Steps
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Process Focus - Step 1 and 2, Level 1 Example

Historical Performance Analysis
•Review Last Period (Week/Month) and Year to Date
•Review Financial KPIs
•Review Forecast Accuracy at Product Family Level
•Review Forecast Bias at Product Family Level
•Review Operations Plan Accuracy at Product Family Level
•Review Cost to serve at customer account level
•Review Historical wastage and Returns
Review Planning Criteria
​•Review Warehousing/Manufacturing Capacity
•Review any changes in prices
•Review Product Range Changes
•Review merger/divestment of business areas
•Review any planned systems functionality changes
•Review Key manpower and resourcing issues
•Review Product Hierarchy Changes
1 Comment

Structured Problem Solving (High Level)

12/5/2016

1 Comment

 

Benefits of Structured Problem Solving

  • Remove time lost in debate
  • Identify weak points in processes
  • Discover systemic causes
  • Explain with reasons why an incident occurred
  • Gives a factual representation of the incident
  • Solve problems and prevent them from ever happening again!
    • In my experience, people will push back and say this is impossible...my response is a very simple question: Why are Manholes round?
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The main reason is that a round shape does not have to be perfectly positioned and the opportunity for it to fall through is eliminated completely.  We don't think about this because it has never really been a problem from its conception.

Purpose: Funnel Down to the Root Causes of Problems and Prioritize Solutions

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Understanding The Problem is Most of the Battle


​Albert Einstein was once asked how he would spend his time if he was given a problem upon which his life depended and he had only one hour to solve it. He responded by saying he would spend 30 minutes analyzing the problem, 20 minutes planning the solution, and 10 minutes executing the solution. For those overly prone to jumping into action, a bit more planning would be worthwhile.
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"I would spend 30 minutes analyzing the problem, 20 minutes planning the solution, and 10 minutes executing the solution."

Common Structures at a High Level:
​PDCA, DMAIC, A3, 8D/PSP

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​​PDCA
The PDCA-Cycle, also called the Deming-Cycle or Shewhart-Cycle, is an iterative four-step management method used in business for the control and continual improvement of processes and products. PDCA is used for medium sized problems and the Act-phase implies that the PDCA-Cycle should start again in the sense of a continuous improvement process. The Plan-phase should be done very careful and therefore should consume at least 50% of the total time of the PDCA.

Steps:
Plan
Do
Check
Act
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DMAIC
The origin of the DMAIC problem solving approach is the Six Sigma world (but not exclusive to Six Sigma), referring to data-driven improvement cycle used for improving, optimizing and stabilizing business processes and designs. Basically, it is a 5-Step PDCA used for large problems where typically a huge amount of data is available. Therefore DMAIC is often related with statistical tools, but this does not have to be. The duration of a DMAIC project may exceed more than three months, dependent on the complexity of the problem and process to be improved.
​
Steps:
Define
Measure
Analyze
Improve
Control
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A3
The A3-Report, developed by Toyota, is an 8-step PDCA that should fit on an A3 sheet of paper. It is a collaborative and visual tool (graphs should be included). The A3 is also used for solving medium sized problems, which can be solved in one week or less.  It provides a simple and strict approach systematically leading towards problem solving over structured approaches.

Steps:
Clarify the Problem
Break Down the Problem
Set a Target
Analyze the Root Cause
Develop Countermeasures
See Countermeasures
Evaluate Results and Processes
Standardize Success
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8D/PSP
The 8D problem solving process, or 8D-Report, is a method developed at Ford Motor Company used to approach and to resolve problems, typically employed by engineers or other professionals. Focused on product and process improvement, its purpose is to identify, correct, and eliminate recurring problems.  It is an 8-step PDCA with focus on fast reaction to customer complaints (e.g. a delivered component or product failed at the customer or in the field). Typically the first three steps should be accomplished and reported to the customer in three days. Basically PSP is the same thing like the 8D, but used in aerospace industries.

Steps:
Plan + Create Team
Describe the Problem
Define Containment Actions
Analyze the Root Cause
Define Possible Corrective Actions
Implement Corrective Actions
Prevent Recurrence / System Problems
Celebrate with the Team
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  • Home
  • About
  • Services
    • Change Management and Business Process Optimization
    • Automation of Repetitive Computer Tasks
    • Data Analytics, Forecasting and Modeling
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