5 Reasons to Love Process Maps

My sense is that to most people, process maps are boring and uninteresting. I mean who wants to sit down and write out how a product flows from one process to another? Well, I do and I actually love process maps, seriously, I do.

Why do I love process maps? I find them intriguing, for me a process map is a moving picture, with both sound and action. I become curious about how each process integrates with the whole map. It’s like an adventure, where I imagine what’s possible.

This all seems like a lot of fun and games, and it is, but what I like best about process maps are the benefits they provide my clients and our organization. I’ve listed my top five.

  1. Planning
  2. Training
  3. Execution and Performance Management
  4. Throughput Maximization
  5. Process Improvement

How do each of these translate into realized benefits? Here’s how it works for me:

  1. Planning – when I understand all the processes and sub processes a product travels, I can plan for its arrival at its next destination/process. I understand how many people, what material and equipment I will need at a given time. I look to the map to navigate and plan resources accordingly.
  2. Training – With a map, I can share the journey of the product with my colleagues. With a shared understanding of the beginning and ending point, people begin working toward a common goal and seek to learn how to best get from one process to another process.
  3. Execution and Performance Management – With an action plan and a map, implementation becomes a shared responsibility because my team has helped to create the plan and they understand their role. Performance is measurable to the plan and compared to the plan and if unexpected results occur, we go back to the plan and make adjustments.
  4. Throughput Maximization – Having documented processes allows me to analyze each process, define process times and uncover bottlenecks. Once I understand where the constraints are, I am empowered to engage in, and encourage a problem-solving approach to the situation.
  5. Process Improvement– I think I like this benefit best. With a plan, and performance feed back for each process, I can make improvements to one process, and understand how the improvements affect the whole system. This eliminates bottlenecks, and reduces work in process so the whole systems flow evenly and smoothly.

Finally, let’s not forget that all these benefits add up to better quality, increased profitability and better client satisfaction! With all these benefits, it becomes easy to see why process maps are a really important business tool and why I love them!

What do you like best about process maps?

5 Key Factors For A Successful New Product Launch

New product launches are complicated.  Often there are complex information details yet to be determined while also planning for a successful launch.  Ambiguity and last minute changes in forecasts, design and marketing content can negatively affect both the product quality and on-time delivery.

While launching a wide variety of new products, I have found the following 5 factors useful in combating the complex challenges inherent in new product launches.

    1. Communication – it is essential to create an open dialog about the goals of the launch. Understanding topics including commercialization and customization need to be fleshed out, since this will affect costs, manufacturing processes and on-time delivery.  Additionally, managing expectations through asking appropriate questions, providing explicit feed back and expressing concerns about how different choices impact launch goals, is necessary.
    2. Flexibility – launches are dynamic, and flexibility is required to negotiate all the necessary changes involved from concept to completion.
    3. Scalability – The ability to create and design systems for the many possible configurations of the product’s specifications and quantities is mandatory.
    4. Detailed Specifications – After negotiating all the change in the planning process, it is absolutely necessary to clarify the final processing specifications. Both establishing and communicating the finalized, written specifications through out the supply chain ensures that a high quality part is created.
    5. Execution – Coordinating, validating and improvising provides the basis for a successful new product launch.

Instituting these 5 factors doesn’t remove the complexities of a new product launch, but it simplifies the process and helps me and my management team maintain our sanity!

What complexities have been most challenging for you and how did you overcome them?

It’s Official – ASAP Is Nationally Recognized Women’s Business Enterprise

After an arduous process, ASAP has received its official certification as a Women’s Business Enterprise from the Women’s Business Enterprise National Council.

Adding value to our client relationships is important. In addition to increasing quality, capacity and profitability, ASAP is helping our clients meet their diversity supplier requirements too!

If you are interested in learning more about how this certification can benefit your company, please contact me at saratn@asapwi.com.

Best regards,
Sara

Quality! ASAP Earns Intertek ETL Certification

I am pleased to announce that ASAP has added another quality distinction to its portfolio – ETL Listed Mark from Intertek.

Thank you to my staff, whose attention to detail makes great quality happen every day and thanks to our clients for your trust, confidence and continued business opportunities you send our way – thank you!

Best regards,
Sara

45 Seconds = $25,000 in Savings

Really? 45 seconds.  I can’t even brush my teeth in 45 seconds, boil an egg or sing the ABC’s.  But I can save $25,000 – how?

We all know time is equal to money.  Workforces are paid based on the amount of time spent working, and therefore a monetary value is placed on time.  A strategy then to save money in this difficult economy, is to save time and that is exactly what process improvement does – saves time and consequently, saves money.

The depth of savings is of course, dependent on how time is valued.  In the model below, we illustrate how saving 45 seconds in process time equates to saving money.

Seconds Saved

Fully Burdened Labor Rate

Project Run 5 times/year

45

$20

$2,500.00

$12,500.00

45

$25

$3,125.00

$15,625.00

45

$30

$3,750.00

$18,750.00

45

$35

$4,375.00

$21,875.00

45

$40

$5,000.00

$25,000.00

The beautiful thing about making process improvements is that the savings are not a one-time event, but rather an ongoing return on investment earned each time the process repeats.

For More Information

Check out this video to learn more
about how small process modifications can make large improvements to profitability.

Click Here to learn more about how
ASAP can help you increase your process efficiencies.

Imagine the opportunities – what would happen if I could save 45 seconds on, 2, 3 ,4 different processes?  How could this affect my capacity to grow my client base?  How could this affect my ability to invest in new products? How could this affect my ability earn that promotion? How does this affect whatever it is, that is important to me?

45 seconds. It’s less than the time it takes to brush my teeth!

Performance Problem Solving 101: Moving Beyond The Pointy Finger

Performance evaluation can be a messy topic. Often it is difficult to understand why performance output does not match expectations.  Part of the complexity is separating out personality conflicts and learning to focus on the situation.  However, focusing on the situation requires us to unravel or peel back the layers to uncover the inputs to performance.  Three important inputs include:

  • Process – the work instructions to perform functions
  • Tools – the equipment, machinery, jigs, computers, etc used to enhance performance
  • People – those who perform processes/functions

Taking time to focus on each of these inputs provides insight into how they effect performance and measures the degree to which each is aligned and leveraged for optimal performance.

The next step is how to evaluate each input.  A great way to begin an evaluation process is to gain an understanding of the current state by asking questions about each input.  Beginning with process, process questions might sound like this:

  • Is the process written
  • Does the process support the desired outcome
  • Are there redundancies
  • What quality level is the process capable of producing
  • Are tasks combined to reduce motion and waste
  • What are the cycle times

Once the process is defined and validated for quality and productivity performance goals, we can evaluate the tools.  Tool evaluation questions might sound like:

  • Do the existing tools support quality goals – what tools could be incorporated
  • Do the tools proper enhance productivity and decrease cycle times
  • Are the tools easily accessible
  • Are the tools well cared for and maintained
  • Do the tools allow for self correcting behaviors

Now that the process and tools questions are resolved, we can move to an evaluation of the people engaged in the process.  People questions might sound like:

  • What physical skills are necessary
  • What intellectual/emotional skills are necessary
  • What problem solving skills are necessary
  • What leadership attributes are needed
  • What training is necessary

After exploring,  problem solving each component can begin.  Knowing how to measure each input helps to untangle and align each for the best possible outcome – And it could lead to a happier work force too!

What have been your challenges in performance evaluation?

Revealing The Hidden Costs Of Manufacturing

I recently wrote a blog article about achieving a target product cost through design and process improvements.  A fellow colleague wrote a great comment regarding total cost vs. unit cost as a method for supply chain decisions.

Yes, total cost is different from unit cost.  This begs the questions: what is total cost? An economic definition includes variable cost, fixed cost, capital expended and the total opportunity costs of each production input.  While this definition is accurate and makes sense in theoretical economics, it is not very helpful to those of us charged with making complex supply chain decisions.

To unravel the more essential question: “what are the components of total cost relative to my product, my company, my manufacturing facility?”, me and my team, have created the following model:

This model, revealing the total cost of manufacturing, can seem overwhelming.  However, studying the model does give us an insight into just how complex costing can be.  And while there are barriers to accurate information, the model can be used as a begining point to drill down into each component and then re-assemble or roll up into a total cost, creating a more robust decision making platform.

What have been your challenges in determining total and unit costs?

Brand Loyalty – What Is The Cost Of Disappointment?

You know how if feels, last minute purchasing, ordering the product too late, rushed delivery, hurry to the store – all to receive a less than attractive product package.  Maybe the package is dented, torn or crushed; or it could have been previously opened or it is missing critical components.  Maybe you are a manufacturer waiting for inputs to your process and half of the product is lying on the floor of the truck.  This is disappointment.  Disappointing experiences are remembered, repeated and attached to our brands.

To those of us familiar with the concept of brand loyalty, we understand that when brand loyalty is damaged, there are consequences.  Yet, the concept and its ramifications seem to be intangible, emotional and difficult to express in mathematical terms.  When this is the case, it becomes challenging to create a business case for investing and improving processes that directly influence brand loyalty.

Interestingly, I recently came across a study on consumer behavior when presented with damaged packaging.  The information I found most fascinating include:

  • Perception of a product as a “brand you trust” dropped from 73% to 41% when packages were even slightly damaged
  • 25% of the most brand-loyal shoppers question the safety of the product when the package is damaged
  • Up to 55% of shoppers discarded the brand, and 36% opted to purchase another brand

These numbers presented are eye opening, but what, then is the financial impact of these data? Taking the information in the study, we applied a hypothetical percentage of damaged packaging into the model and based on the following assumptions, we arrive at the model below.

Sales price = $5
Percent of users switching brands = 36%
Annual Revenue = one $100,000 project per month

Revenue Quantity Percent Damaged Product Packaging QTY Damaged Return Cost Customers Lost Due to Brand Switch Revenue Lost Due to Brand Switch Annual Revenue Lost Due to Brand Switch
$100,000 20,000 1% 200 $1,000.00 72 $360.00 $4,320.00
$100,000 20,000 2% 400 $2,000.00 144 $720.00 $8,640.00
$100,000 20,000 3% 600 $3,000.00 216 $1,080.00 $12,960.00
$100,000 20,000 4% 800 $4,000.00 288 $1,440.00 $17,280.00
$100,000 20,000 5% 1,000 $5,000.00 360 $1,800.00 $21,600.00
$100,000 20,000 10% 2,000 $10,000.00 720 $3,600.00 $43,200.00

 

Reviewing this model, I notice at the 1% defect rate, my damage is only costing $4,320 per year.  While the observation is correct from a GAAP accounting perspective, it does not take into account the costs to acquire new customers, the lifetime value of customers, and attrition rates.  Additionally, the perspective does not count the number of people with whom the 72 lost customers discuss their disappointment.

For More Information

Check out this video to learn more
about how to prevent product damage within the supply chain.

Click Here to learn more about how
ASAP can help you with your damaged product issues.

So, what is the total cost of disappointment?  It seems to me, the answer lies more in our approach to the question, than the articulated dollar amount.  When we engage in a process that allows us to explore different perspectives including, sales and marketing data, operational data and the experiences our customers are having, we might then obtain an accurate account of the cost of disappointment.

B2B Relationships: Trust, Transparency & Commitment; Revenue, Profit & Cash Flow

Defining what a successful B2B relationship entails may differ depending on many factors. Some of those factors can include corporate mission, vision and values. Other influences might be determined by our particular role within our organizations. For me, I notice I feel and perform best when trust, transparency and commitment are present in the relationship.

Trust, transparency and commitment may not be viewed as typical ingredients to successful B2B relationships and often characteristics such as revenue, profit and cash flow are the rule of measure. Revenue, profit and cash flow are essential. A Business’ survival depends on the presence of these elements earned through its relationships with client companies. Since business survival depends on the presence of the revenue, profit and cash flow, what difference, if any, does it make if trust, transparency and commitment are not a component of the relationship?

I believe the difference lies in two things, choice and the human element. Organizations and businesses are more than a series of automated systems and processes converting and conducting transactions – every business possesses a human element. Next, there is the issue of choice. Today, businesses have more choices than ever to have their needs met – and ultimately, it is people who make business decisions from a myriad of choices.

If people, working inside businesses, do not have a sense of trust, transparency or commitment from our relationship with them, how can revenue, profit and cash flow be sustained? What prevents businesses from making a different choice?

Perhaps the best answer is that both sets of three: revenue, profit and cash flow and trust, transparency, and commitment are equally important ingredients of a successful B2B relationship.

Achieve Target Price and Earn Profits Too!

Whether launching a new product or expanding capabilities to accommodate our clients growing needs, meeting the target price is a significant barrier to earning new revenue streams and potential profits. Sometimes we take on new business opportunities as a way to gain market share, deepen relationships or to gain an advantage over the competition. While these strategies for new business serve their purposes well, it remains essential not only to meet the target price, but also to be profitable at the target price.

Fortunately, approaching target price challenges from both a design improvement and process improvement perspective allows us to open ourselves to a path toward meeting our objectives. A design and process improvement course can make taking risks less emotional and bring us into the realm of rational decision making. What if a design and process improvement method was consistently employed, and the data collected from these efforts demonstrated that a 10%, 15% or even 30% gain in profitability is likely.

One step in achieving a data driven decision-making model is to create processes that deliver reliable data needed to incorporate into an existing decision making and forecasting model. A process that generates and delivers this kind of information is presented below. It is an iterative process that synergizes with a well known Six Sigma concept, Define, Measure, Analyze, Improve, Control (DMAIC).

Step One: Define Base Process

  • Define base process
  • Create value stream map
  • Delineate sub-processes and assign cycle times to each
  • Identify and document opportunities for improvement
  • Present per product price and improvement opportunities

Step Two: Perform Project, Provide performance Feedback and Improvement Opportunities

  • Actual cycle times
  • Yield reporting
  • Constraint analysis
  • Feasibility study
    • Incorporate actual data to engineer design for manufacturability model
    • Material & equipment suitability
    • Yield and process time optimization

Step Three: Adopt New Process

  • Define new process
  • Create new value stream map
  • Delineate sub-processes and assign cycle times to each
  • Identify and document opportunities for improvement
  • Present per product price and improvement opportunities

Step Four: Perform New Process, Provide performance Feedback and Improvement Opportunities

  • Actual cycle times
  • Yield reporting
  • Constraint analysis
  • Feasibility study
    • Incorporate actual data to engineer design for manufacturability model
    • Material & equipment suitability
    • Yield and process time optimization

This iterative process continues to deepen, creating an improvement perspective and can continue until all potential waste is removed, or can be finished when a desired target price and profit is met.  The data gathered from the process can then be integrated into our decision-making models.

While the decision-making model currently in use may not be well structured and documented, we are making decisions and are therefore using some sort of model. Enhancing our awareness regarding how we go about making decisions and adding a rational perspective to our new business strategies can support our efforts to increase revenues and profits.

Click Here to download a case study supporting this model.

Click Here to begin a conversation on how ASAP can help meet your target price initiatives.

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