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Top Ten Success Factors Of Lean Six Sigma - Identifying Success Factors Critical To Deployment, And Evaluating Which Tools Have The Most Impact On Projects

Identifying success factors critical to deployment, and evaluating which tools have the most impact on projects

New research has identified the success factors critical to the success of a lean six sigma deployment, and the ones that make a difference etween partial and complete success.

The research also examined tool use in projects, and evaluated which tools were best understood, and which ones had most impact in projects. In finding that there is a link between understanding and impact, and that tool understanding is mixed, the analysis highlights the fact that

the greater understanding of the tool, the greater the impact.

This affects the success of a programme in many ways, not least because if there is a lack of understanding about a tool,then it is unlikely to be used, despite the fact that it may well be the most appropriate and effective. Furthermore, the level of management commitment is adversely affected by a lack of tool and technique understanding, and therefore for

greater executive buy-in, management must have a knowledge of the tools and techniques available.

SigmaPro, a global provider of lean six sigma training,software, consultancy services, and deployment support, teamed up with the Aston Business School, one of the top business teaching & research institutions in the UK, to carry out research into the success factors involved in business improvement programmes, and also looked at which tools work, and why in real projects. In doing so, the research identified the tools that work best in practice. “Most Six Sigma and Lean training is based around thinking from 20 years ago based on successes in Motorola and GE. We wanted to take an up to the minute look at what makes a successful programme today” says Chris Rees, Director of UK Operations for SigmaPro.

Commissioned as part of Sigmapro’s continual improvement process for their lean six sigma training material and deployment support, the esearch looked to find out what makes a successful improvement programme. It compared the responses of improvement practitioners, including Black Belts and Master Black Belts with general management and Green Belts in order to gauge the impact that increased technical knowledge has on project success, and the tools that are most effective in gaining that success.

Success Factors Important for a Successful Deployment

1. The root causes of the problems should be addressed, not the symptoms of them.

2. It is the responsibility of everyone in the organisation to ensure that quality is built in at the source.

3. An environment must be developed that encourages the constant improvement of products and services

4. Defective products and services must be considered as unacceptable.

5. The customer requirements must be fully understood to be able to provide good quality.

6. All people in the organisation are responsible for quality improvement

7. Leadership and resource needs to be given by top management

8. Data must be used to support and verify the success of the improvement initiative

9. Customer satisfaction is a critical measure for business improvement

10. Resistance to change must be actively managed “As the use of the lean six sigma methodology and tools are growing quickly, researching its success factors is important to make sure that lean six sigma is not misused and so continues to have a high positive impact.” says Mike Titchen, Master Black Belt at Sigmapro and part of the research team who

collated the data and analysed it using lean six sigma tools and techniques.

Dr Ben Clegg of Aston Business School thinks that, “lean six sigma practice has enormous potential to improve business performance.

How the training of professionals in tools and success factors takes place, and the implementation of these in practice, is currently an under researched area. It should be a concern of all leading researchers and training organisations in this area to ensure that it is performed correctly in order to maximise its impact”.

The first part of the research asked respondents to rank a list of 30 success factor statements sourced from various respected ‘gurus’, such as Deming, Ishikawa, Crosby and Feigenbaum. Respondents were asked to rate each statement for its importance to a programme generally, and from there whether they believed it had been implemented successfully in their organisation.

Of those surveyed 25.6% of respondents reported complete success with their change programme, whilst 73.1% said it was a partial success. Interestingly, it transpired that general management – the sponsors of the programmes - are much more likely to describe the deployments as a complete success than those working within the programmes. This comes as no surprise to Mike Titchen. “I think practitioners are more critical, and focus not only on how well the deployment is accepted, but also on how well their internal processes are working (eg project selection, review sessions, BB development etc)” he says. “Sponsors, on the other hand, are happy to see positive results, and focus less on the process side.”

The successful implementation of the factors would also appear to be directly related to the programme participant’s belief in its importance, with eight of the top ten factors deemed critical to success also appearing in the top ten of those most successfully implemented. This is evidence that buy-in from all the participants in the programme is heavily influential on its success, regardless of the technical tools and techniques available.

To Mike, this shows the importance of Change Management. “When the General Electric heuristic for making initiatives work - E = Q x A (Effectiveness of the programme is a function of its Technical Quality times its Cultural Acceptance) - is considered, it can be seen that there is a fairly even split between cultural and technical factors. This implies that the people aspects of any improvement programme are as important as the technical tools and techniques used. This is why we at SigmaPro spend a lot of time in our Training on Change Management.”

Best Understood Tools

BBs / MBBs

1. 5 Whys

2. Fishbone

3. Pareto

4. 5S

5. Measles Chart

Best Understood Tools

Non-Experts

1. Brainstorming

2. KPI

3. Process Mapping

4. Basic Statistics

5. Gantt Chart

Tools considered most effective – BBs / MBBs

1. Process Layout

2. Visual Management

3. What, Where, When, etc.

4. CTQ Trees

5. Process Mapping

Tools considered most effective – Mgmt / GBs

1. Process Mapping

2. KPI

3. Poka Yoke

4. Best Practise

5. Brain Storming

The second part of the research dealt with specific tools and their impact on deployment success. Respondents were asked to rate 77 lean six sigma tools in terms of their own understanding of them, and then in terms of the impact the tools had on a successful programme. In finding a strong correlation between the understanding of the tool and its perceived success, the research shows that as the advanced tools are considered more effective, it is vital that management should have at least basic awareness training in them in order to appreciate their impact.

Unfortunately, it seems that this rarely happens. “In my experience, they are often reluctant to do this,” says Mike. “And this has a significant negative impact on initiative success.” One worrying result of the research is the apparent fact that more often than not, the urgency of a project determines the selection of tools: the more urgent a project, the more likely a simple tool tends be used, even if it is not the most appropriate or effective.

SigmaPro have already begun to incorporate the results of the research into their training material.

If you have any questions regarding the article, please do not hesitate to contact SigmaPro at:

Regus Business Centre

Central Boulevard

Blythe Valley Business Park

Solihull

B90 8AG

United Kingdom

Tel: +44 (0)1676 532 470

Fax: +44 (0)1676 534 544

http://www.sigmapro.co.uk

SigmaPro UK- Six Sigma Training. Your online resource for Lean Six Sigma Training and Consulting. Lean Six Sigma Training courses from August 2008. Get free tips, resources, special offers and trends HERE

Increasing Business Productivity With Software

To succeed in any business, employers need tools and information to boost productivity. Computers improve productivity because they can accomplish tasks faster and eliminate the need to manually repeat routine tasks. Gone are the days when a paper timesheet was used to calculate payroll in the workplace. Timesheet software can be installed to help businesses get organized and be more efficient and it is usually compatible with both Windows and Apple Mac computers.

Managers need employees to work and avoid wasting time on needless tasks. Paper timesheets can get lost and clutter desks. Timesheet software is a more reliable way to keep track of employee time and attendance. The timesheet software keeps a log of sick time, vacation time and other time spent away from work. The software automatically tallies timesheets each month giving employers and employees more time to accomplish business objectives and it can be configured to send email reminders to managers who need to approve the timesheets. The timesheets are submitted and approved electronically.

Timesheet software aids employers in managing and analysing employee productivity. The software not only automates timesheets but also manages centralized data securely. It can be a means of providing reports so that possible problems can be foreseen ahead of time. When possible problems are planned for, the business can work to solve the problems before they happen.

Some managers use the timesheet software to track employee task progress. A timesheet software manages shifts, and schedules activities in real time. Through the software it is possible to create a to do list, keep a time log and enter project information. This helps businesses to plan and execute business goals. It is a convenient way to manage time and resources to accomplish business objectives. It also serves as a timekeeping device and improves employee performance by keeping desks free from needless papers to file.

The software is a vital accounting tool. It can be configured to bill by the hour or any other time unit. The various programs can also calculate payroll and bill clients. The software is used for printing accounting reports as well as the creation and monitoring budgets.

A timesheet program reduces administrative cost by allowing employees to enter their own time. It also reduces the risk of clerical mistakes and provides timely accurate information for managers. It also provides a way to communicate with clients and other colleagues.

Data entered in the software can be changed whenever there is a need to do so. Cost, time and other data is easily adjustable anywhere there is a computer with internet access.

Because there are a variety of timesheet software programs available in the market, it is vital to do your research when choosing a timesheet software. Find a program that is fast, secure and simple. Excellent timesheet software is cost effective and can be customized according to the business and employee needs of your company. For a business which strives to increase productivity, a timesheet software is an essential tool in project and time management.

If you are looking for time management solutions for your company, consider looking at timesheet software. It can streamline your business, increase productivity and reduce time spent on repetitive business tasks that can be automated. This type of program should be a must have in every comany’s software arsenal.

Buying Bar Chairs: Top 5 Mistakes Not to Make

There are 5 common mistakes that most bar owners and managers make when shopping for their bar chairs around the world. Those mistakes are deeply rooted in our social order, traditions, and perceptions created by mass marketing techniques.

1. Looking for Brand

Many buyers around the world look for brand rather than functionality. It starts with peer pressure in early stages (high school) and continues to live with the entrepreneur till the day he decides to buy those bar chairs for his pub. How does brand fit into this?

Bar owners will find themselves looking for a brand they’ve seen on a famous website, or even featured on Oprah as one of the best brands for the year. This is one of the biggest mistakes, since bar owners end up with chairs that do not fit their pub’s theme, design, layout, etc.

There are two key elements to consider for you not to fall into the “brand trap” as many experts call it: price and its effect.

Price does not convey functionality and quality, no matter how much we’d love to think so. You can buy a couch for a $200 and have it at your pub for more than 2 years, and you can buy a $1000 couch that gets torn the first minute a customer moves (those studded jeans can seriously damage your chairs).

The second thing to consider is to the need to prioritize. This falls under the effects factor, since buying expensive furniture will only leave you short on money to focus on other factors such as machines, decoration, etc. It is important for the buyer to remember that brands can be quite heavy on the budget, where as run-of-the-mill bar chairs can bring excellent results without leaving you broke.

2. Picking the Wrong Colors

Many post-modern design enthusiasts might tell you: there is no wrong or right when it comes to colors. However, mixing colors can bring unwanted results if done haphazardly. Many people will stop going to a pub simply because the colors are an eye sore: too bright, or too dark and gloomy.

One mistake under this category is to pick random colors under the assumption that it will create a “Modern” or “Hip” look. Randomness for modernity is an image enforced by the media, yet any design expert can tell you not all colors can be harmonious in relation to your bar’s setting and theme.

On the other hand, many bar owners tend to overmatch colors, making their bar look very monotonous. You come across many bars in which the curtains match the color of the chairs’ cushions, and the tables match the color of the wallpaper. Not only does this technique convey a very orderly and proper atmosphere, this also creates boredom for the eye, your customer will find himself falling asleep.

3. Picking the Wrong Textures

Textures are one of the most important aspects when picking your bar chairs. Wrong textures make customers less willing to visit your pub for two reasons: discomfort and fear. You might think this is such a huge statement to make, however; let’s examine such claims.

Some textures can cause discomfort for your customer during certain seasons and settings. If your pub is located in an area known to go through at least 3 heat waves every year, picking leather for your bar chairs might not be a wise choice, since it will scorch your customer’s skin. This will lead to extreme discomfort and dissatisfaction with your bar.

Another aspect in relation to textures is how your bar chair’s texture it fits with your customers’ lifestyle. If your bar is located near a construction site, you can expect your customers’ to carry around a lot of dust and stains. A customer might feel self conscious sitting on sensitive fabrics that might stain easily. This usually calls for more durable, stain friendly textures that won’t leave your customer self-conscious about sitting and moving about.

4. Picking the Wrong Design

Picking the wrong design for your bar chairs can also create a lot hassle in the future. Wrong designs also rely on the environment in which your bar is located. Chairs with intricate engravings tend to be “dust gatherers” and will require your staff to clean them frequently and carefully; do you really want your customer to look at the dusty edges while enjoying his time?

Another design mistake is to pick eccentric designs that haven’t been tested before. So you might think that Swivel Egg chairs will make a perfect leap in design: modern and hip. However, eccentric designs don’t fare well on the long run. In case of damage, you’ll find that their maintenance cost and time is expensive and troublesome. You should opt for bar chairs that won’t get damaged easily, and if they do, won’t require a professional to fix them – professional maintenance is very expensive nowadays. Pick ones you can easily fix while sipping a g cup of coffee before opening hours.

5. Picking the Wrong Shape or Height

Let’s use our example from above to explain how picking the wrong shape or height can lead to loss of customers. Egg chairs can only appeal to those who can actually fit in them. In terms of size, Egg chairs confine your customers to a certain size range. How would an overweight customer feel about sitting in one of those?

Bearing in mind your customer’s lifestyle is one of the most basic elements of picking size and height of your chairs. If your customers are relatively of average height, there’s no reason to bring bar stools that would take forever to climb on.

In conclusion, bar owners should think about the consequences behind every purchase, since all those mistakes can be easily avoided once you have your customers’ lifestyle and area’s background in mind. Conducting a simple survey before re-decorating is one helpful way to determine the perfect choice of bar chairs. Buying bar chairs should conducted after some time of careful research and customer observance.

Mr.Nibbinsworth has been writing for Laytrad Contracts about cafe furniture and cafe chairs for several years off-line and has recently started to write online. Get a 5 year quality guarantee on all contract furniture including hotel furniture at laytrad.co.uk

A Room That Reaches Out and Welcomes Your Guests

There are a lot of public buildings where a need is evident to create a reception room, a lobby or a waiting room for customers. Most medical practices need such a room so patients can wait in relative comfort for their appointment with the doctor. Businesses commonly set up a very pleasant waiting room for business consultants, sales people or clients to be able to relax before getting their time with the business man or woman who offices there. You might even think of a hotel lobby as a receiving room because that lobby is the first room that greets new customers and makes them feel welcome.

So as you prepare the plans for a reception area for your business (http://www.laytrad.co.uk/commercial-reception-furniture.htm), every detail is important. All of us have spent time in waiting or reception rooms that we did not enjoy. So it’s good to think of those times and try to sort out exactly what it was about that experience that made it unpleasant. And those are the things to design away from so your guests not only feel at ease and comfortable in your receiving area, they will be willing to spend time there and not driven away from your business just because that room didn’t do its job of reaching out and welcoming your guests.

Obviously the heart of a good receiving room are the chairs. The kinds of chairs you provide as well as how they are arranged can go a long way to send the message to your customers or guests that they are welcome and you want them to feel at ease as they wait in this room. It’s good to think about what kinds of chairs you will use and what makes a great reception chair before you make the investment in this important part of this important room in your hotel or business.

Customers relax best in a waiting or reception room that is well designed, modern, well decorated and soothing. This is all accomplished by professionals in interior decorating who can lay out a reception room that utilizes relaxing colors and lighting that just naturally causes any anxious guest to catch a second wind and gain some composure before conducting the business at hand. In a situation of a doctor’s office or dentist’s waiting room, the job of calming waiting patients could not be more important. People are anxious enough about what lies ahead in a medical situation so anything that can be done in that waiting area to introduce calm and serenity is actually medicinal in nature.

If you are working with an interior decorator who is coordinating the layout, the colors and all aspects of the reception room, he or she may have some specific ideas about the reception chairs so they too can help in calming those who my have to pass a fair amount of time waiting there. There have been actual studies that show that certain curves and lines in furniture and certain construction components are more soothing to guests than others. So seek that kind of expert knowledge because your reception room chairs can deliver to you much calmer and more receptive guests who were literally prepared to meet with you by a calming receiving room, even if they never knew that was happening to them.

The reception or waiting room for your business is the very first room your customer will see. For a first time client or guest, they may begin to form opinions about your business or hotel from what they experience in that room. You want that impression to be a good one that communicates that you run and up to date and professional organization. But it also should communicate an open feeling that is conducive to discussions and the building of partnerships. To accomplish this, your reception room chairs should be a modern design and look clean and new at all times. You don’t want chairs that are showing signs of wear as that gives the message that your business or hotel is old, out of date and run down. Make sure those chairs give the impression of a business your customers want to work with. Then they will meet with you enthusiastic and ready to partner with you on the business at hand.

Along with a professional look that is clean and welcoming, your reception room chairs should be above all comfortable. If a customer has to wait there too long, say as long as an hour, you don’t want the chair to cause impatience and discomfort. This is a fine line because you don’t want the reception room chairs to be so comfortable that they put your guests to sleep or make it hard to get out of them. That is why deep living room style chairs might not be the best choice except in hotel lobbies where long term lounging is encouraged. Straight back chairs with top notch cushions for comfort are a good compromise because the customer can relax, read a magazine, have a cup of coffee on the table next to the chair and still be able to get out of the chair and into action when its time to come in and meet with you.

Another consideration that must always be part of planning a very public room is how to keep your reception room chairs clean. While in theory your guests will not be in those chairs for very long, there is every opportunity for the chairs to become soiled. If your guests have children or are children, food stains are common and children just seem to be walking mess factories. So the type of covering for your chair is important. A good choice is a soft vinyl that is easy to wipe clean if there is any kind of spill or other form of soiling of the chair. That also prevents stains from setting in which on a fabric based chair can make the chair look run down long before it it worn out.

By combining the practical concepts of good construction, cleanliness and durability with ergonomic consideration so your reception room chairs are well designed to fit in nicely with the decor and assist your customers and guests to relax and be at ease in your lobby or waiting room, you will have done a good job of thinking through in this important decision about your business. And when you see the outcome of a reception room that reaches out and welcomes your guests warmly and professionally, the positive impacts on your business will be far reaching as well.

Tony Nibbinsworth started writing when he was only 7 years old and has recently raised an interest in furniture. You can view some of Tony’s work on cafe furniture and hotel furniture using these links.

How to Pick a Name For Your Business

Starting your own business can be a nerve racking process as so many different things must be considered before your business can get off the ground. You need money, space, employees and hundreds of other things to make the business you want happen. With all these “to-dos” cluttering your head, it’s best to step back and take one thing at a time.

First things first – your business needs a name! This may seem a silly and frivolous task, but there is a lot to be considered when choosing a name for your business. The name of your business has great impact on how customers view you and your product. Choosing a business name is important not only because of its impact on customers but also because it will be with your business for life. So take some time to think about what goes into picking your business’ name.

Stand Out

Pick a name that is unique to you and your business. Try to stay away from generic names like “Betsy’s Flower Shop” or “Bob’s Car Repair”, but instead find something a little more interesting. This is not to say you can’t use your name in the business name, but also look to other options. A business name with a story is always of interest to customers and will get them to spread your name around.

Spell It Out

When creating a name, stay with words that can easily be spelled by customers. Some business owners try unique word spellings to make their business stand out, but this can be trouble when customers look your business up in the phone book or try to refer you to others. Stay with traditional word spelling and try to avoid unfamiliar words.

Keep it Simple

Make your business name short so customers can remember it easily. This will also help when marketing your name as you won’t need as much word space. If you like, you can make your business name an acronym for a longer title, but just be sure to list your business by this acronym in the phone book.

Make Some Sense

Occasionally, business owners will choose business names that are nonsense words. Although this does make you stand out, it creates a problems for the customer. Words create visuals for people and if the title of your business is a nonsense word, it will be difficult for customers to envision what your business is about. Use words that convey your line of business and the feeling you want customers to get when they come to you.

Give a Clue

Try to include in your business name some information about what your business does. Calling your light fixture business “Rise and Shine” is appropriate, but the same name would not do well for tow truck business. Your business name should match your business in order to remind customers what services you provide.

Don’t Box Yourself In

Avoid picking names that don’t allow your business to move around or add to its product line. This means staying away from adding geographic locations or product types to your business name. With these additions, customers will be confused if you expand your business to different locations or add on to your product line.

Jump Start Your Brainstorming

If you are having trouble thinking of business names, try giving your brain a jolt by looking through a thesaurus for alternate words. A dictionary may also help by giving you words that define your line of business. You can even try looking to competitor business names to give some ideas. However, be careful not to create a name that is too similar to a competitor’s as this will lead to confusion for customers.

Try It Out

Come up with a few different name choices and try them out on friends, co-workers, and potential customers. Ask questions about the names to see if they give off the impression you desire. Be sure to come away with a few different names in case another business has already snagged your first choice. The next step is to register your name and get your business going!

Melissa Mashtonio writes for Manta.com, the go-to site for company research. The site (http://www.manta.com) offers free market research on more than 45 million companies worldwide.

An Equality Policy – Does Your Business Need One?

What is an equality policy?

An equality policy is a business document that outlines a company’s position on equality in the workplace. This is important – discrimination at work on grounds of age, race, gender, sexual orientation and religion are all illegal, and if your employees or the company as a whole acts in a discriminatory manner, you could be vulnerable to expensive litigation.

Why should my company have one?

The first reason to have a business document outlining your company’s stance on equality is simple – it’s good for your employees. Discrimination, bullying, maternity leave, and so on are areas that workers frequently feel hesitant talking about, and unclear about what their legal rights are. Having a clearly defined equality policy gives your employees something to refer to if they have any queries and gives them a clear process to follow.

From a manager’s point of view, it is of even greater importance that you have good quality policy documents to refer to in case of a dispute. Bullying and discrimination litigation can be costly, time consuming and very damaging for a business. A clear equality policy will help reduce the incidence of such problems. Established guidelines concerning what kind of behaviour is unacceptable and outlining a disciplinary procedure are essential, and you should be aware that if any of your employees acts in a discriminatory manner, you can be held responsible for their actions. A comprehensive equality policy can be invaluable in demonstrating that an employee has breached company regulations, and can direct any legal consequences towards the employee who has erred rather than the company as a whole.

What does it need to say?

The equality policy needs to:

•State your company’s commitment to equality and diversity in the workplace

•State the kinds of discrimination that are covered by your policy

•Outline a clear plan of action for encouraging equality in the workplace

Kinds of discrimination that should be covered in the equality policy include:

•Ageism – Note that it isn’t always older people who complain of age discrimination – there are many cases of younger workers complaining that their older peers are paid more for doing the same job.

•Sexism – This includes discrimination in hiring and pay, and also harassment in the workplace.

•Racism

•Sexual Orientation

•Religious Discrimination

•Disability Discrimination

What can go wrong?

If writing a comprehensive equality policy sounds daunting, consider getting a template document – many companies can provide you with a business document template to make sure that the policy is correctly worded. Of course, the most important thing to bear in mind is that once you have this policy in place, you have to follow it! You should also hold regular training days to make sure your employees know what is acceptable and unacceptable behaviour.

You also need to make sure that the document is kept up to date – equality laws change all the time, and you do not want to be caught out by a new development that renders your existing policy ineffective.

Iain Mackintosh is the managing director of Simply-Docs. The firm provides over 1100 business documents covering all aspects of business from holiday entitlement to non-disclosure agreements. By providing these legal documents (with content provided by leading commercial lawyers, HR and health & safety consultants) at an affordable price, the company intends to help small businesses avoid costly breaches of regulation and legal action.

The Benefits of MoR Risk Management Training

Six months ago I undertook a course in MoR risk management and since then I have reaped the benefits of putting this knowledge to use. However, before I went on the course I thought I didn’t need any training. As the Project Manager in my company for the past 5 years, there had been many instances where I had saved projects from being adversely affected by negative changes in the work place, and I had finished my projects on time. So why did I have to do a risk management course? To be honest I was told I had to attend the course by my boss as it was the start of the company embracing continual learning for their staff. It wasn’t met with great enthusiasm by me, but now I’m glad I did the training because of the benefits it has brought to me as an individual and to the business.

MoR risk management is a detailed approach to managing risks but it is also an extremely logical approach to risk management. During our training, each step of MoR risk management was looked at in close detail, and the instructors ensured we understood each step before we moved on.

Since the training I have experienced the benefits of implementing MoR risk management in my workplace and I can now see that risk management is a highly organised approach to dealing with probable risks. It also brings down the level of uncertainty associated with a project and, since the level of uncertainty has decreased with projects, staff morale has increased. I have been able to mitigate the negative effects of risks when they actually occur, and avoid some risks altogether. I have been able to efficiently complete projects assigned to me on time, and I am better prepared to cope with sudden changes in the external or internal environment of work. The success ratio of my projects has increased and in turn this has increased the reputation of my firm. Unnecessary wastage of resources is avoided and ultimately profitability has increased.

MoR Risk Management training was no picnic-in-the-park as the learning curve was steep. The coursework covered was extensive, but the instructors were really good at taking their time and explaining each step. For example, we looked at the process of risk management and how it consists of six major steps, i.e. identifying possible risk factors; assessment of these factors; determining treatments for the risks; creation of a risk management plan; implementation of the plan; and evaluation of the plan. We then looked at situations in our own workplace to help the theory we had just learnt ‘cement’ in our minds. This also illustrated to us that theory and practice do go hand-in-hand and are not treated as separate entities, which is often the case when training courses are taught.

Another stage of MoR risk management was determining the treatment of risks and the instructors taught us the mnemonic ARRT. A = Avoidance (where an activity which contains a risk is not performed). R= Reduction (where steps are taken to minimise the negative effects as far as possible). R = Retention (where the loss due to the risk is accepted and borne by the firm when it occurs). T = Transfer (the loss due to the risk is shifted to another party through certain means, for instance – insurance). I have found the ARRT mnemonic a great memory jogger for when I’m back in the work place and working through each step of a risk assessment.

I do have one regret…not doing the MoR risk management course earlier! So don’t be like me and delay going onto a MoR risk management course, do it today!

Aimee Logan wrote the Article ‘The Benefits of MoR Risk Management Training’ and recommends you visit http://www.afaprojects.com/courses.asp?i=3 for more information on MoR risk management course London.

10 Tips to Manage Labor More Effectively

Typically, labor rates were in the $7.00/hour range five years ago. In many direct businesses today they have reached $12.00 to $13.00, plus a 20% benefit rate added on. But overall productivity has remained flat over a 5- to 10-year period. So, after factoring in the increasing labor rates, productivity has actually declined. Then consider employee turnover. Industry experience is that employee turnover in many centers is 15%-25% or higher. Turnover costs range from $3,000 to $10,000 in people time, training, testing and the ramp-up to full production. This does not include expenses for agencies, ads, etc., which must be added on.

Given the current economic climate, most businesses are mandated to get more out of the resources they have. Here are 10 ways to improve productivity by managing labor more effectively.

1. Improve your odds with new employees

Hire right. How many times have you had new employees quit because they didn’t understand what the job entailed, or didn’t like it once they tried it? No matter how good the person comes across in an interview, you can’t tell how well you’ve hired until they start working.

* Some companies have had good results by giving prospective employees some limited instruction and then letting them try the work.

* Determine if there are tests you can give that assess whether people can do the work or have a good chance of fitting into your culture.

* Use a “buddy system” with a seasoned employee in the department to get the new employee off to the best start.

* Look at whether you have an effective training program by function. Will cross training improve production and give you flexibility in staff utilization?

2. Measure employee turnover and do something about it

Set up a system to track and calculate employee turnover monthly. Develop a turnover report showing the number of employees hired, employees who started training, employees who left while in training and the number who leave once they graduate to the production staff. Establish an exit interview process to learn more about why people leave. Look at the turnover by months and years of service. Are you seeing turnover with long-term employees? New hires? Calculate the cost of recruiting, training and losing an employee and get management to understand the reasons and the costs. From there establish a plan of action for change.

3. Set standards or expectations

There is an old industrial engineering axiom: You can’t improve something you haven’t measured. Set up production goals by department and individual. (Departments or functions include receiving, put away, replenishment, picking, packing, shipping, and returns.) There are two ways to do this: engineered standards, and benchmark goals or expectations. Engineered standards are expensive for small to moderate sized companies to establish and maintain. However, most companies can gain from setting expectations based on benchmarking with other companies. This will let you understand productivity, costs and best practices in other businesses. Study your operation and set up internal production standards that can be measured and are fair. Don’t just use someone else’s standards, as they probably will not fit your operation. The most important benchmark exercise is to measure your production against yourself, seasonally, by month and week. Increase the “height of the bar” over time and you’ll generally see overall productivity increase. The most difficult part of all this is getting accurate production data.

4. Develop labor budget by function

Many operations have a planned dollar budget for the month. While dollars can be derived from this, a labor budget shows the number of hours needed by function based on the order and work flow. The budget should be planned by month, week and day if possible. For each of the various flows, identify the major activities: orders, receipts, returns, etc. The starting point for the orders is the projected order flow that marketing is expecting. For receipts this can come from purchase order files of expected receipts. Returns can be planned from the expected return rate. Production expectation for hours are derived based on the benchmarks that you set for your operation as described above.

The key here is to convert the transaction volumes expected to units of work. For example in the receiving area, it will mean estimating pallets and cases by the week and preferably by the day. In picking it means extending the number of orders by day into the units per order. Identify and plan variable and fixed labor required to meet these volumes.

Sum this all up to a weekly level. Over time as you get more experience and history you can experiment with taking it to a daily level. Challenge your supervisors to see this as standard for hiring and bringing in personnel. We all know that there is “play” in these volume estimates, but using this methodology will help you plan for improving customer service and keeping overtime to a minimum.

5. Give employees feedback

Most people want to feel they are part of the bigger company picture. They also deserve to have accurate feedback about their production. LifeWay Christian Resources, a religious nonprofit based in Nashville, TN that is the publishing, retail and direct commerce arm of the Southern Baptist Convention, is a great example. In their logistics management offices they display monthly graphs for the past year of metrics such as total error rate, cost of a transaction, reported savings, etc. Actual against plan is shown. Current production is displayed on terminals and boards, and they not only acknowledge department records for various departmental functions, but individual record holders for such activities as packing. LifeWay also uses monitors in packing and other departments to show production versus plan for the day.

6. Provide incentives

More and more companies are using incentives to increase production. A large multi-brand catalog client we work with volunteered, “Incentives require engineered standards to be fair and to keep productivity increasing. If they are not continually evaluated, chances are that you’ll end up paying an incentive for production that you have gained over time.”

7. Deal with seasonal spikes

Each year the customer buys closer to the peak and counts on operations to deliver on time-compressing the peaks dramatically. Stay in contact off-season with part timers who have worked the peaks for you. Consider using bonuses smartly: a) rehiring bonus; b) stay the season bonus; c) refer-a-friend bonus. Try temporary help agencies to meet the peak requirements.

8. Streamline functions

Three areas-picking, packing and returns processing-make up 60%-80% of the labor cost. Look at each of these areas to determine how to reduce the work required. For example:

* In picking, 60% of the pickers’ time is in walking. Can you slot fast-moving product (which is 20%-30% of the product) in closer proximity (”hot pick” zones) to reduce pick time? Are there other picking methods like cart/bin, pick to light or voice pick which will increase production?

* In packing, can the pack station be engineered ergonomically to increase production? Can low tech solutions such as box builders or envelope inserters speed up production?

* In returns, can the steps be simplified? Can a team approach speed up processing?

9. Set up a continual improvement process

Streamlining labor functions is not a one-time activity. You will need to set up a continual improvement process-a set of activities designed to bring gradual, but steady improvement through constant review-to reduce and simplify the steps and number of times you “touch” product. Each time you touch product, you add cost.

10. Look at what more you can do as a manager

Each of us needs to look introspectively at our leadership and managerial capabilities. Here are a few questions we need to answer:

* What motivates staff members to excel beyond normal expected performance?

* Have you delegated and empowered your staff to achieve success?

* Are your team members the most capable and talented people you can afford to hire?

* Are any of the staff too weak to enable you to achieve the success you were hired to achieve?

* How effectively and objectively do you evaluate the performance and development of your team members?

One of our clients at a large multichannel company summed it up best: “Managing labor is a game of reducing a few pennies here and there on an organized basis to reduce the cost per order overall. At the same time, we need to take into account how we can motivate and increase productivity fairly to achieve our company’s goals.”

Curt Barry is president of F. Curtis Barry & Company, a multichannel operations and warehouse consulting company. Helping you understand Cost Reduction and Productivity Improvement are just a few of the ways we can help your multichannel business.

Key Business Advantages to Being Small & How to Leverage Them

As a small business, you have many disadvantages over bigger players. You have less money to play around with, perhaps less in-house skills, and you won’t have as much power when it comes to negotiation either. Although there are certainly disadvantages to being a small business, there are also benefits too. In this article let us take a look at what factors may be working in your favour, and how you can leverage them.

Know Your Customers

When you’re a small business, you can get to know your customers intimately. This is something that simply isn’t possible for a larger business, and is therefore something you can use to your advantage. Try to get to know your customers, what makes them tick, and what they like about the service you provide. When they get in touch, and someone who knows them always answers the phone, you have a major advantage over larger companies. To make sure you’re taking full advantage of this, make sure you talk to your customers and demonstrate that you understand and remember their needs.

Tailored Service

When a bigger business is asked for a service by a customer, and they don’t provide it, it probably won’t be worth the effort of tailoring a product or service to suit their needs. However, when you’re a small business this can be perfectly feasible. To give an example, as a t-shirt design company you might not make football shirts. And when you’re a large business, it might not be worth diverging from your core focus to help someone with this need. However, as a small business, you could divert a small amount of your time to do this for the customer. Not only might it give you a future revenue stream, but it also provides a method for you to further enhance your relationship through catering to your customers’ needs. The ability to act fast is a great benefit of being a small business. Are you taking advantage of it?

Charge Less in the Services Industry

As a small business in retail and manufacturing, the cost of buying products and raw materials will usually outstrip labour costs. And, for that reason, a larger business will usually be able to benefit from having economies of scale. But, in certain industries, the opposite happens - smaller businesses have higher margins than their competitors.

For example, a small design agency with two partners only needs to make enough money to cover the partners’ wages. With a larger design agency, they’ll have management costs, receptionists, sales staff, marketing costs, and lots more. Therefore, as a small business in the services industry, it is still possible to compete on price.

While it can be good to compete on price, especially as you try to build a customer base, it’s also important that your business is able to grow in the future. This means if you charge too little now, your customers might not be willing to pay more in the future when / if your overheads rise.

Naz Daud is the founder of CityLocal. UK Business Directory Business Franchise Opportunity Ireland Business Directory Latest Business Advertisers

Business Management: Key Skills of Great Managers

Managing a business requires a wide range of skills and experience. All managers will have things that they are good at, and things that they are not. In this article I will examine the key skills that you should look to develop as a manager, and, if you’re an employer, the skills you should expect your managers to possess.

Delegation

All good managers should be able to effectively delegate responsibility to appropriately qualified staff within their business. Good management is about ensuring that a project or goal is successfully achieved, however it rarely means a manager should do it on their own. That’s why they have to be good at picking the right people to do the job, and managing their execution. Being good at delegating can also mean being good at understanding someone’s strengths and weaknesses.

Accountability

A manager should be able to hold themselves accountable for things that they are given management responsibility for within their business. Although it will not always be their fault directly, they should be willing to take responsibility when it’s someone they are directly responsible for that’s failed.

Foster Team Spirit

A good manager will be able to foster a good team spirit, and ensure that everyone is comfortable performing their duties within the team. As a manager will generally be overseeing the execution of a project, rather than doing it directly, they should also be good at planning & evaluating a team’s progress towards the goal they have been assigned responsibility for.

Calm & Collected

If a manager is not able to remain calm during difficult times, it will be hard for their staff to do so. That’s why a manager should be able to show strength during difficult times resisting the temptation to lose mental control when the going gets tough.

Loyalty

It’s important for a manager to show that they are loyal to their staff. This can be done through showing appreciation for things that they do well, and also rewarding them too. If a member of staff is having an issue, a manager that is readily available and genuinely helpful will be able to cement their pivotal role as a leader within the business through addressing this issue quickly, before it gets out of hand.

Respect

It’s important that a manager is respected by staff and other members of the management team. This can be affected by a number of factors, such as: whether or not the manager is good at their job; the way the manager acts towards their employees; their commitment to their job; how the employees perceive the managers out-of-work behaviour, and many more factors.

Distance versus Friendship

Some managers believe it is more important to be friendly with their staff, while others prefer to keep a distance - claiming that if you become too close to your employees, they will expect far too much and take more liberties.

Although there is no right answer, both techniques can work better depending on the type of team that you’re dealing with. When you are working with a self-motivated team, it can often work well to develop a close personal bond with them. However, when your team need more day-to-day management in order to do their job, it might be preferable for them to keep their distance. It is a good idea to analyse each situation accordingly, and work out the best approach to take.

Naz Daud is the founder of CityLocal. UK Business Opportunity Internet Business Franchise Ireland Business Opportunity Latest Businesses

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