Episode A.021 The Operations Element

Introduction
This week we continue our focus on the post pandemic re-opening of business. Other than dealing with customer and employee fears, there is nothing different or special about today's show except urgency. Unlike other expansions at the end of a contraction, this was not a structural - it was imposed. Normally a contraction (recession) is a result of over supply and decreasing demand awaiting a unplanned event to prick the bubble. In this case the demand still exists with diminished supply and we have sufficient information to predict the beginning of an expansion. The purpose of IBGR programming this month is to prepare the entrepreneur for the turnaround. it will require acting with urgency over the next 4 months.
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Show Objectives
This show will focus on all of the elements or functions required internally (including build products or delivery services) to run and grow the business. Remember everything is a process and there is little difference between making something and delivering services to a customer.

What You Need to Know
We have discussed over several shows the core processes of business. Instead of focusing on all ten, we have selected the few that are the challenge of the small business owner.

Processes to Analyze & Improve

1. Accounts Payable
2. Accounts Receivable 
3. Purchasing & Inventory (Raw Materials, WIPI, and Finished Goods)
4. Attracting, Selecting, and Onboarding People
5. Production or Projects (Work!)
6. Marketing, Sales, and Service

What You Need to Do
For each process you need to follow the same script.

1. Best Practices for Process Design / Redesign
2. 3 Pillars of Quality (Lean)
3. Value Mapping
4. Lean Performance Metrics

Process Design / Redesign is how work is designed and managed. The goal is to achieve a market position of Lowest Cost Provider (LCP) as compared to competitors. LCP does not mean lowest price,  it means you make or deliver the product or service faster and better for less giving you the ability to use price as a sales tactic.

The 3 Pillars of Lean: Balance, Demand, and Waste

Value Mapping

• Select Process to Improve – start with the process that has the highest potential to improve margin.
• Conduct QFD (Quality Function Deployment) – understand customer requirements and make sure all are covered by the appropriate step (TO BE).
• Create “AS IS” (current process) Value Map – visual map of how work is currently done by steps or equipment.
• Design “TO BE” (improved process) Value Map – visual map of how it should be done, ensure it includes data from the QFD to ensure both process and delivery quality.
• Design Metrics – ensure the new process and individual behaviors are measured to better  manage performance.
• Write SOP (Standard Operation Procedure) – make it official – this is how we work from this point forward.
• Write Job Descriptions and Requirements – codify what is expected for each position, job, task, etc., leave no doubt what is expected.
• Create a training plan to build skill mastery (competence) in this order (1) current position, (2) other positions in their process, (3) promotable positions.

Lean Performance Metrics

Next Show:  A.022 Marketing & Sales Element