Johannesburg, 12 Feb 2007
All companies with large processing operations aim for one thing: producing more with less or more with the same, but never less with more. It's commonly called productivity.
If the jargon is to be believed, the implementation of such things as business process re-engineering, lean, workflow, TQM, BPM, theory of constraints, Internet, B2B and computer-based training should lead to a more productive workforce. If there is no cost reduction, cost avoidance, revenue protection or revenue increase then why should a new IT system be installed, workers up-skilled or processes improved?
Rethink believes that increased efficiency and effectiveness can be achieved by combining process re-engineering with production management and can be applied equally to both automated and non-automated processes, with the overall objective being one of eliminating non-productive time.
No matter what industry is represented, all businesses have processes and process analysis is a core fundamental activity of any improvement plan. All work is a process and all processes can be improved; however, the extent of the improvement is derived from the actions subsequently undertaken by the customer following this analysis.
Although process improvements are often enthusiastically embraced by companies, the same is not true for production management, an area that equally needs to be addressed since poorly managed processes prevent managers from exploiting the full potential of any improvements. Often this means managing people effectively.
The production management cycle compromises the following aspects:
* Forecast
* Schedule
* Control
* Evaluate
Nevertheless, when confronted with production management, many companies will say they follow these principles, but investigations show most companies apply few of these aspects and some not at all. So what do we mean by production management?
Many companies have a yearly forecast broken down to a monthly expectation of work, while others only an expense budget forecast. Managers need to manage processes daily, not related expenses, thus the ability to convert work volumes into resource requirements, ie a capacity plan, is often lacking. A diligent capacity plan, called a master schedule, works off standards, considers peaks, accounts for training and leave, and calculates labour and other resources needed for the work.
Once this master schedule is in place, the work can then be broken down into a weekly and daily schedule, taking all the operational nuances into account. To successfully manage work means recording and applying the data correctly utilising appropriately tools such as business intelligence software.
However, short interval control is the most controversial item of work management but is also the most effective. It means taking your day's work plan and controlling it on an hourly basis, a challenge that has been successfully addressed across a number of industries.
Supervisors are crucial to the success of managing work and short interval control empowers them to supervise effectively, although unfortunately in many of the studies undertaken by Rethink, supervisors work more than oversee. People control processes and even the most ideally designed process fail if not controlled properly.
Many within the service industries will point to workflow as the radical eliminator of lost time, the improver of productivity, and so on. Regrettably, in many instances, the processes are automated as is, without being redesigned, and then, not controlled, thus creating situations where the radical improvements that were envisaged never materialising.
One of the seemingly tragic consequences of the technological era is the mass of data produced. This data spawns numerous information reports but provides little in the form of the actions re how their processes are run and managed. In environments where downtime, absenteeism, productivity, etc, need to be measured tightly and actioned immediately, a ream of irrelevant information is frustrating.
Production reporting should be a daily occurrence and shared with the relevant staff. A half an hour reviewing operational issues and drawing up actions to resolve problems brings all parties to the table and keeps everyone informed.
MIS reporting is another area that needs a radical rethink. Every area should be managed on certain key indicators, not a mass of seemingly contradictory data between different reports. Identify these key indicators, measure them and ensure that there are no more than 10 in total.
According to Derek Miers, CEO BPM Focus: "There is too much BP but not enough M" after he had consulted with major financial service firms within the UK and Europe; "... 30-40% additional productivity is possible when a disciplined production management approach is employed, over and above the benefits possible from the core workflow/BPM implementation".
Overly controlling people with a big stick usually leads to a de-motivation situation. With the reverse, staff become more motivated since specific targets are established. It helps improve their individual measurement for the yearly performance appraisal and highlights training deficiencies. 'Gut feel' supervision is removed with visible issues shown for action and monitoring shows deficiencies in skills to be addressed.
For further information, please contact Kem Tissiman at telephone (082) 413 6044; fax (011) 285 0054; e-mail kem@rethink.co.za.
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