Category Archives: Operations

Operations management best practices. Keys to efficiency, executing, and cost controls

Maximizing Millennial engagement

Statistically the Millennial/Gen Y’s are the most diverse and the most socially aware generation yet.  If you sell a product or employee more than a few people, you need to have a strategy on how to communicate and engage this growing population.  Doing this correctly will amplify your message, value and ability to generate revenue significantly.

In 2014, 36% of the workforce was comprised of Millennial’s (born 1976-2001) and by 2020 46% of the workforce will be.  A majority of these 80 million adults are in the workforce today.  Of them 64% are reported to ask about social policies of a company during interviews and 24% indicate it as a key factor when accepting a job.

Businesses who adapt messaging, management practices and policy the earliest may win the loyalty of this critical group.  Loyalty translates into engagement and retention, and is a great motivator.  In my personal experience, this is the most savvy and hardest working generation that I have managed.  In my 25 years of management I have managed boomers, Gen X, Y /Millenials and each clearly have different values and goals.  Building a program around a workforce’s values and goals so they feel as though they are contributing may be the best motivator.  Read a case study

Synergy seldom happens through “old school” management. 

The common denominator for attracting this group as followers is through the corporate leadership strategy.  One thing needed is that a Millenial generally needs to feel comfortable that a company is adding to society in some way.  This is vital for recruiting and this workforce may be the most productive group to date, so some companies need to rethink the benefits they offer.  The Benefits program is where the money comes from for many companies that offer the types of programs that attract this workforce.  The trend to decrease company match in 401K’s by a point or two, decreasing vacation or sick days, even eliminating cafeterias in the building frees up finances to point towards newer benefits that are more valuable to this generations.  Benefits exist to attract workforce, they(benefits)are an added value to working for a particular company.

How to attract or engage this group? – Learn from Disney

Walt Disney was not exactly known for taking care of his employee’s.  Early strikes from artists nearly shut down his studio.  Yet, he taught us the key to managing the millennial population…….

In the mid to late 1980’s the restaurant industry saw how important it was to not only serve food quickly to their guests but they realized the value of creating an “experience” for there patrons.  Theme restaurants boomed and dominated the industry.  This started with Ground Round and TGI Frdays but was perfected by Applebee’s.  Applebee’s International grew to over 1400 restaurants worldwide in record time and they did it by creating an “experience” the diner was comfortable with.  When the kids say “lets go to Applebee’s”, parents generally didn’t argue.  This was all inspired by the “experience” the guest received when going to a Disney theme park.  Roy Disney understood the importance of creating an escape and what a lasting impression it made.  If you focus efforts on executing the “experience”, loyalty will follow.

After Lloyd Hill popularized the “customer experience” motif with Applebee’s, the Healthcare industry was next.  To this day most hospitals place a great emphasis on the “Patient Experience”.  There have been departments created around tracking it with surveys, hour upon hour of staff training, and the bed side visit has been completely re-scripted, and it has all worked!  Studies show that hospitals that create the best overall “experience” for the patient have less open beds than those that don’t and they have a greater number of Outpatient procedures booked while also enjoying a much lower cancellation rate.  When the healthcare industry shifted it focus to the “experience” of their guests, it increased loyalty.

Many businesses need to start focusing on what I call the “Employee experience”  and go to lengths to include it as part of the culture.  Millenials grew up knowing this environment as the norm.  Everywhere they went someone was competing for them to have the best experience, so why should work be any different?  Focusing your company on the “employee experience” will increase engagement, productivity and satisfaction and isn’t that what you want?  One of the Core Values of Applebee’s was “Fun”.  That’s not only cool, I guarantee it works by building employee loyalty.

Whether you are looking to recruit or promote sales; here are                          5 tips to engage this group and start creating a successful         “Experience”
  1. Speak to a flexible workplace, environment and culture
  2. Demonstrate dedication to career growth through support, feedback and goal setting
  3. Boast a culture of collaboration
  4. Design opportunities to contribute to society both as individuals and as a corporate structure
  5. Competitive Compensation structure

 

Bonus – #3 is worth repeating, it is that important – Promote a climate of leadership and development, this group doesn’t respond well to being managed and micromanaged.

In my experience Millenial/Gen Y’s are attracted to a company for what I mentioned in the first part of this blog, and choose to leave because of one or more of the bottom 5 points.  Incorporate those points into your culture, manage this group by results and mentor them so they succeed and you will be as amazed as I at how this will help your company build loyalty and generate the revenue you were hoping for.

 

Carpe diem!

Why Goals Fail

Being a “realist” helps create worthy goals and many confuse what they wish to accomplish as the targeted goal in place of what will actually have a valuable contribution or a permanent solution to the issue.  Many look at problem solving as a bandaid, as a method to get them by or kick the can rather than finding the root cause to eliminating the issue.  The only real solution is to stop a problem at its source and many spend their time on goals that don’t address the problem at its source, they focus on various symptoms.

Having been inundated with blogs and newsletters  since the end of December about how to manage yourself to create goals, I felt the need to tell you why most of what you have read this year falls short and that if you follow them, how your goals may fall short also.

There are really only a few steps in the process of goal setting but before any of it starts you need to ensure two things;

    1) Is the person looking at the problem able to see the root cause?

    2)  Does the proposed goal eliminate the root cause of the problem?

If not, go back and keep trying until you can answer yes to both.

Once you have a worthy goal, use the old but proven “S.M.A.R.T. Goal” acronym for planning your goal.  I am sure you know the one; Specific, Measurable, Attainable, Relevant, and Time based. It not only works, it works really well.  Don’t try to reinvent the wheel looking for a quicker, easier, or sexier way.  This has been used by the largest, most efficient companies throughout the world for decades, yet some blogger somewhere has come up with a new, better way?  Even if it sounds boring, do it the proven way because at the end of the day (or year)

it’s about the results isn’t it?

The last thing you need and the reason why your goals may fail this year boils down to one word: accountability.  Who is holding you accountable for these?  Yourself, a Supervisor, a spouse?  While we don’t like to believe this, few of us have the self discipline to make sure we follow the plans we make to the letter.  It is easy (and human) to make adjustments as you go which changes a goal and lessens the positive effect these actions will ultimately have on you, your business or your family.  Some how you feel justified doing it at the time, but at the end of the year, the problem still exists. You’ve either shifted your goal or accomplished part of it and let yourself off the hook.

A partial goal should be considered a failure.  If not, why set the goal in the first place?

Being accountable to someone changes that by increasing the rate of success.

Questioning someone on the progress of a planned goal makes them pay attention.  It is human nature to not feel comfortable when reporting that you did not complete something.  Discussing the obstacles you encounter with an Accountability Partner can help considerably to keep you on track.  When goal setting with my clients or employee’s I always recommend an “Accountability Partner”(usually me, but I can be tough) someone to periodically report milestones to or be questioned by to help maintain the focus on results.  A good Accountability Partner will continually ask about results even if you didn’t have any at the last meeting.  They don’t need to be an expert on the subject, they just need to follow up and get you talking about it.  Think squeaky wheel…

Easy right? Here is a recap-

You want your goals to work?  Remember these 3 things

  • Does the goal solve the problem?
  • Is it planned correctly (SMART)
  • Is it managed correctly (Accountability)

 

Carpe diem!

 

Click here to contact  C.S.Simons Consulting for a FREE template to help you establish and organize your goal setting process.

10 steps to a better Inventory Process

To many it is a dirty word, but most businesses understand that “taking inventory” is a necessity and must be dealt with.  The frequency of it is often determined by the industry and it ranges anywhere from once a week to once a year.  But Inventory is an extremely important tool and when managed properly will not only add to a companies profit line, but contribute to keeping your cash flow lower.

Many dread the process.  It can be very lengthy and tedious.  We thought it would be helpful at year end to pass along some tips to help make this process more efficient for you.  Simply put, the more organized you are, the easier and quicker it goes and the better you do it, the more you know where your money is.  When working with clients, I often offer to do an inventory with them.  They usually jump at the offer for help, and it gives me great insight as to how they run their office and thus lets me know where to dig in deeper.  The goal is usually to do a better job with Inventory and save them time doing it.  I have listed those things I look for below.

Inventory is a process; don’t view it as a task.  So many look at it as a one time task of counting what’s on hand.  That part of the process is referred to as the Physical Inventory, but it should not be viewed as the only component.  What leads up to, and happens after the Physical Inventory is equally important in the process and each adds to the efficiency of the other.

Why is this process so important?

Inventory takes a lot of time to perform correctly.  What if you could save ½ hr or more every time you do it?  I save most people at least an hour by having them follow the steps below.  Oh, and also….this is money were talking about.  Inventory is important because the dollars it identifies are vital when figuring out your product costs, so the more detailed the collection process, the better your product costs look.

If you don’t have everything I list here in place, it may take a few months of implementing to really see the effects of how much time it will save you.

Here are what I refer to as  the 4 components of the Inventory Process;

Determining need(s)

    • Establishing what needs to be in your inventory ahead of time helps streamline the counting process.
    • Establish Product specifications and Order guides to insure consistent ordering.
    • Have Vendor agreements to insure pricing, quality and consistent supply.
    • Have Production systems in place that can establish pars on items needed to inventory.  Keeping inventory as low as possible to meet demand.

Organize

    • Organizing storeroom logically and insure items are located together.
    • Establish product pars to insure adequate space is available.
    • Create Physical count sheets to mirror storage to accelerate counting process.  (see “Shelf to Sheet” below)
    • Have someone clean and organize store room prior to counting.
    • Create different count sheets for different store rooms and consolidate like items at the end of the counting process (not during)

Daily Management

    • Label and date to help insure proper rotation (everything has a shelf life)
    • Limit access and secure storeroom when not in use. (Key control)
    • Minimize storeroom personnel to ensure consistent receiving and control
    • Limit who receives orders and handles invoices
    • Perform account receivable tasks as invoices are received

Monthly Management

Pre- Physical counting

    • Ensure the most current price is on the Inventory extension sheet (Master Spreadsheet) for each item (changes by industry) and that it is done prior to Physical counting day.  Account receivables need to be up to date at time of Inventory counts.  Doing price changes at the same time is proven to not be efficient.

Post Physical counting

    • Review and tally all Physical count sheets.  If products may be found in multiple spots, consolidate to one number to enter on the Master spreadsheet.  Doing this ahead of time will expedite the data entry AND begins the analytical process.
    • Enter counts in Master spreadsheet to allow for calculations (referred to as “Extensions”)
    • Review extensions and look for obvious errors.  – Key miss-types or entered as “each” but priced by “case” would be one of the more obvious
    • Analysis of inventory by category totals and comparison to prior inventory.  Look for any major differences, variations, or trends.

Depending on the industry, I generally advise establishing an acceptable variance by Inventory category becomes established.   If over the “acceptable” variance (5%?) then have the manager report as to why.

Other key points that will help your Inventory process
  • Make sure how it is being counted is consistent with how it is purchased, used or stored.  If it comes in a case of 100 ea., yet they are only used 1 at a time, then break the sheet down to an “each” price and inventory them by the “each”.
  • If it is purchased by the pound, then make sure there is a scale available when inventorying occurs.  Do NOT assume each one is a given weight.  There is a reason why the maker doesn’t price the product this way.
  • The Physical Count process needs to be completed at a designated time when no product will be entering or exiting the storeroom(s).  Often done after hours or before business start for the day.  If you have multiple units doing individual inventories, it is important to insure they all do it at the same time, otherwise performance comparisons are difficult.
  • Utilize  “Shelf to Sheet ” – a 2 party system during physical inventory.  Inventory is not about filling in what is on the count sheet; it is about capturing the money on the shelf.

                 Process -One person starts in the upper corner of a storeroom and calls to                                             the second person.  The person calls what item it is and how many there                                                are.  The second person finds the item on the count sheet and writes down                                             the amount.  If they don’t find the item on the sheet, they write it down                                                   separately to be added at the end of the process.  The first person then goes                                       to the item adjacent to what they just counted and calls that item off etc.                                             This is done throughout the storeroom and is a methodical way to ensure                                               everything is accounted for.

  • Make sure Physical counts are never taken while someone is sitting at their desk.  Mistakes happen and this is why they call it “Physical” inventory.
  • Lastly for proper control a non Ordering/Receiving person should be involved in performing the physical counts also.  This is a common Risk Management practice plus; people that touch these products everyday are more likely to make assumptions/mistakes during a lengthy Inventory process.

 

Carpe diem!

 

Hello World!

Today I am introducing a new blog series from C.S.Simons Consulting.  This blog will feature several different types of content on the issues that business people struggle with every day.  Advice will be given on a variety of subjects that directly effect your revenue and we are always looking for questions or topics for discussion, so please don’t be shy.

Here’s a quick overview of the categories we offer;

“Ask an Expert” Series

A collection of questions asked of me or my collaborators about many different business or management topics.  Presented simply with brief answers but we are always available to elaborate on them if you’d like.  These may be answered by someone in our firm or other experts we collaborate with.

“Conversations with a Consultant”

The format in this series is designed to be easy flowing with out too many buzz words and corporate talk.  Just simple conversations, focused on information designed to assist you with your work and help you make more money.   The majority of these topics will fall into 1 of 4 areas; People, Products, Operations, and Marketing.  These 4 key areas’ are found in every business and are the most important indicators of your businesses ability to generate revenue.  C.S.Simons Consulting exists to help others make more money, and these are the same areas focused on in our proprietary “M.O.R.E. Assessment Tool©.

“Quotes, Observations & Ironies”

Favorites and classic quotes, probably some opinions on business related current events and those that know me should expect periodic sarcasm.

 

Please let me know any questions that you have about these topics or how to implement the changes mentioned into your business.  I am here to help.

 

Carpe diem!

Conversations with a Consultant – Operations

This area of the blog will be dedicated to the broad category simply called “Operations”.  Much of the focus will be dedicated to the common components that people skip for one reason or another.  I will show you the details to consider and tie those to the dollars and cents of your business.  Most people understand the discussion regarding “operations” in the business and how it has a direct reflection on your profit, so I don’t need to sell anyone on the importance of this category.  This is most commonly focused on in the Manufacturing or Retail sectors, can focusing on it improve the Financial or Healthcare Industry?  I will discuss these and other industries to show you what you may be missing!  I have clients from these sectors that will absolutely agree this is linked to your businesses ability to generate revenue.

The bulk of this blog will be multiple conversations over time around general management topics like Financial reporting, Auditing, Crucial Policies (every business needs), Time Management (my most popular seminar!), the many sides of Human Resources, and Labor management to name a few.  As with all of the blogs on C.S.Simons Consulting, special efforts will be made to break these down into actions that fit the scale and scope of your business.  Continued focus and discussion of these common subjects in a conversational format will make it much easier for operators to “fine tune” their own programs.  So questions are encouraged!

But I promise to still challenge you in ways that you may not have thought about!

Operations comes down to a few key area’s; Planning, Execution, Measurement, and Correction.  This blog will challenge industries that don’t think one of these pertains to them, and show them the importance.  I will also provide broader concepts to consider and different approaches to accomplish these.  Learn from my 25 years of Leadership in Operations Management, because I want to help.

This category will help keep you focused on the two things that matter most;

1) how to increase your businesses ability to generate revenue

2) how to be more profitable.

 

Carpe diem!