Tag Archives: Process Improvement

Stop Fighting Emergency Fires in Five Steps

Whenever I find myself spending most of my day fighting fires, I try to step back and understand why. A great framework that I like to use comes from the Malcolm Baldrige Performance Excellence Program. The firefighting example takes a process through five steps, going from “emergency crisis mode” to “no problem mode.”

The Malcolm Baldrige Performance Excellence program is a government sponsored award that focuses on promoting quality in US organizations. You can see the images below and other great resources on their graphics page.

Step One – Running and Reacting

1The first stage is where most of us start when we think of fighting fires. We react to emergencies that pop up by dropping everything and running to what’s urgent. If this only happens once or twice, then it might not be worth the effort to improve the response. However, the problems that occur frequently or have large impacts are the ones that need to move beyond step one. Focus on those problems for moving them through steps two through five.

Step Two – Running Less and Reacting Quicker

2If fires pop up in the same places frequently, then installing extra hoses in that area can really help. Likewise, if you repeatedly face the same emergency, making additional resources available in those areas can cut down the size or length of an emergency. Taking a few minutes to create simple, small countermeasures makes reacting easier.

Step Three – Response Game Plan

3Once countermeasures are in place, how can we get everyone on the same page? When the next emergency strikes, who contacts whom? Addressing these issues by making a game plan can make the response much more effective. More importantly, getting others involved makes the emergency less dependent on you. If you can’t ever leave the office because you’re the only one that knows how to handle certain problems, then this step can free you from that burden.

Step Four – Automated Response System

4Just like a sprinkler system automatically dousing flames, you can build a system that handles emergencies automatically. Basic computer automation or alerts can take care of many problems that frequently pop up. Emergencies that are more complex may require some IT investment, but many of those solutions are worth the price tag. Conversely, significant investment may not be necessary if a manual response system will work just as well.

Step Five – Innovate Emergencies Away

5This final step is not “brainstorm how this emergency doesn’t happen again.” That type of thought should happen at any stage. Instead, this is a systematic change in the design of work flows, products, and systems so that unexpected problems are less common and less damaging. A product’s cost can often be reduced by 70% when the designers’ goal is to make the product easier for manufacturing. Similarly, perhaps 70% of your emergencies could be avoided by focusing on internal customers and avoiding downstream emergencies. Of course, balancing the needs of internal customers with those of external customers is difficult. Nevertheless, keeping the needs of both customers in mind will help reduce emergencies for which you can’t plan.

How to Use the Five Steps of Firefighting

Whenever a problem arises, I look at where in the five steps my response to the emergency is. Based on the size and frequency of the problem, I can then look at options for moving the response to the next level. Few fires need all five steps; such investment would be overkill. However, simply knowing at what stage each of my problems is helps me prioritize my improvement efforts. Soon the categorization becomes second nature, and process improvement becomes easier, quicker, and more effective.

Best of all, there’s less fires to fight. And the fires I still have to fight are easier to put out.

At what stages are the recent emergency responses you’ve initiated?

[Images Source]

The Most Popular Supply Chain Cowboy Articles of 2014

We’ve seen significant growth this year – online traffic and subscribers have more than tripled from 2013. It’s great to know there’s so many people working together to tame the wild west of supply chain management.

Below is a list of our five most popular articles from the past year:

Number 5 – How Skullcandy Rocked S&OP

How Skullcandy Rocked S&OPFor Supply Chain Cowboy’s first podcast, I had a great interview with Mark Kosiba, former VP of Operations at Skullcandy. He shared a ton of great advice on how small companies can leverage their nimbleness to grow and become world-class operations in competitive fields. If you haven’t yet listened to what Mark had to share, be sure to download it now so you can listen to it during your next commute.

Check it out here: How Skullcandy Rocked S&OP

Number 4 – Startups, Sourcing, and Sustainability with Mark Dwight of Rickshaw Bagworks – Interview Part 1 of 2

Mark DwightWant an example of what supply chain excellence and lean production really look like at a San Francisco bag company? Then be sure to check out this Q&A interview with the CEO of Ricksaw Bagworks. The article received a lot of positive social media attention, especially from people passionate about US-based manufacturing and small business entrepreneurs.

Check it out here: Startups, Sourcing, and Sustainability with Mark Dwight of Rickshaw Bagworks – Interview Part 1 of 2

Number 3 – One Easy Excel Formula to Track Shipments

Ship Track Excel FromulaIf anyone in your organization tracks packages, then they’ll definitely want to take a look at this article. It reviews a free excel add-in that lets you track shipments from most major carriers with a single formula. Even if you’ve shied away from tracking your shipments in the past because of how much work it can be, the article shows how that might now be possible.

Check it out here: One Easy Excel Formula to Track Shipments

Number 2 – Tips for the APICS CSCP Exam

Tips for the APICS CSCP ExamSupply Chain Certifications are growing in popularity to not only help build an educational base, but distinguish job seekers looking to advance their career. This article details what I learned while preparing for the APICS CSCP exam, including useful advice for how to tackle the test. The first section about whether the exam is even worth pursuing is a great read for supply chain managers wanting to develop their team’s skills.

Check it out here: Tips for the APICS CSCP Exam

Number 1, the Most Popular Article in 2014 – Build an Awesome Vendor Scorecard Program in 4 Easy Steps

Vendor Scorecard ExampleThis vendor scorecard how-to article won by a wide margin, attracting one in every four visitors during 2014. As supplier relationships become more important to a firm’s success, scorecards provide a simple and effective method of managing those connections. The downloadable template, included in the article, is a great place to start in building your vendor metric program. If you’re looking for the best bang for your buck in improving your supply chain, be sure to check this article out now.

Check it out here: Build an Awesome Vendor Scorecard Program in 4 Easy Steps

What’s Coming in 2015?

Here’s a sneak peak to a few articles and podcasts coming in the next couple months.

  • The First Steps in Improving Small Business Operations
  • Fighting Fires – a How-To Guide
  • More Business and Lean Quotes
  • Bringing Lean into Your Organization

What else would you like to see as topics for articles? I’ve had some great conversations with readers this past year, and I’d love to hear from you too. What topics are you interested in – and what challenges are you up against? Shoot me an email, or post in a comment below.

As always, thanks for reading, and have a great holiday season and a happy new year! Grab your cowboy hat and join me in riding your forklift into the sunset of 2014.

‘The Johnny Tightlips’ and Two Other Popular Approaches to Supplier Relations

“Before you send that email, there are a few lines I want to take out. We don’t want to share that information with that supplier.”

“Really? But this supplier has done so much for us – shouldn’t they know what’s going on?”

“Not yet. Maybe later – but we don’t want to put any tension on our relationship right now.”

Three Approaches to Supplier Relations

Most companies have a list of key suppliers that you just couldn’t live without. Your dependence on them reminds you of the support you get from best friends, siblings, or even your spouse. But sharing personal information with family and close friends is often easier than sharing business information with your suppliers. What if they take advantage of you? What if they share that information with your competitors? What if they become your competitor?

Navigating your supplier relationships depends a great deal on your business model and the character of the suppliers you work with. Perhaps you could benefit from increased information sharing. Or – perhaps you should hold back a bit more. Here are three approaches to supplier relationships to consider.

The Johnny Tightlips

Johnny Tightlips

Johnny Tightlips is one of my favorite characters from the Simpsons. His catchphrase, “I ain’t sayin’ nothin’,” characterizes the attitude that a surprisingly large number of businesses take. While this arms-length relationship seems cold, it also has served many companies quite well.

The stories of suppliers moving upstream and becoming a direct competitor with their customers are numerous and instructive. For example, Asus was Dell’s supplier when they announced their own brand of personal computers that would compete directly with Dell.

If you’re a fan of poker-like negotiations, then keeping your cards close is highly advisable. Millions of dollars have been won by letting the other party speak while you sit quietly and listen. In fact, using a “pained pause” may be a great tactic to try next time you’re in negotiations. This tactic is described as, “When your negotiating partner makes a too-low offer, sigh, look him or her in the eye and say nothing.” Your silence puts pressure on them to do better, negotiate with themselves, and make a better offer without a word from you. For more on the Pained Pause, check out this Lifehacker Article.

However, relationships with Johnny Tightlips suppliers are only good as good as the benefits they bring. Unless you have most of the power in a supply chain, it’s unlikely that your suppliers will sacrifice much for you. When hard times come, they’ll more likely to switch to your competitors since there’s no loyalty or relationship in place.

Here’s a couple of my favorite Johnny Tightlips appearances:

The Open Book

The Open BookOn the opposite end of the spectrum is the open book approach. Your suppliers provide valuable services to your company – much like your employees. Treating them the same as employees, especially in regard to information, makes a lot of sense.

Being open has a myriad of benefits. Suppliers are able to collaborate with you on new ideas. Because they’re higher up the chain, they bring valuable insights about what efforts they’ve seen previously work or not. They also may have innovative ideas that they’re more likely to share with you because of your relationship with them.

An open policy also can be lifesaving when the road gets bumpy. Suppliers are much more patient when they know what is going on – why payment is delayed or orders are down. Though the rough spots are often the most difficult times for honest communication, that’s when it’s most impactful. A detailed email explaining the situation openly can open the door for more lenient payment terms and with the relationship intact.

Before your open your books completely, here are some important questions to ask:

  • Has your supplier proved their trustworthiness yet?
  • Is there any specific information that poses an unusually high risk if shared?
  • Have sufficient contracts been signed to prevent unauthorized sharing outside the business?
  • If you are a public company, are SEC guidelines – especially insider trading rules – being followed?
  • Have we sufficiently explained the policy to those who interact with our supplier?
  • Are your instincts prompting you to hold something back? Why?

Despite the risks, opening up communication often yields impactful results.

The Game of Kingdoms

The Game of KingdomsA middle ground is a philosophy I call the game of kingdoms approach. Imagine your company as a kingdom – complete with a castle and city walls. Your suppliers and customers are also kingdoms. Some are bigger than you, and some smaller. Just as a king engages with other kingdoms, you work with other companies.

The much larger kingdoms – the ones you’d like to have on your side if a war starts – merit investment in open communication. You want to build those ties in diplomatic ways by sending emissaries and fortifying trade routes. The smaller kingdoms may require less work. Taking a diplomatic game approach and envisioning various castles often helps me make better decisions on supplier relations.

Besides, “inter-kingdom diplomacy” just sounds more fun than “supplier relationship management.”

What’s Your Weapon of Choice?

Which approach do you currently use with your suppliers? How might you benefit from adjusting your communication style?

Share your thoughts in a comment, and be sure to check out our recent podcast where we talk with the former VP of Operations at Skullcandy about vendor relationships and metrics.

[Image Sources: Johnny Tightlips (modified) | Open Book | Castle]

Stop Throwing Away What You Learn

Throwing Away What you Learn

My wife and I have a running joke about asking certain types of questions. She will ask me something like “Do you know when Easter is this year?” In an ironic tone, I’ll reply, “if only there was a global electronic network of information that you could access from your phone that would answer that question.” She’ll roll her eyes at me, lightly punch me in the arm, and then pull out her phone and ask Google her question. Wikipedia usually has the answer, and our conversation moves on. Rest assured though that my wife takes great pleasure answering the same way when I ask similar questions that the Internet easily answers.

Even though that question is sarcastic for general questions, it holds real meaning for questions in a small business. “Where do I find the form to request time off?” “Where is our procedure for creating an invoice through EDI?” “What are Walmart’s shipping requirements?” To all these, I reply, “If only there was a company-wide, easily accessible, and searchable resource that would answer that question.” From that idea came our company’s wiki.

Background on Wikis

A wiki is collection of information that can be edited by most or all users of the program. Wikipedia is the best-known example, an encyclopedia that anyone can edit or add information to. Creating a similar, living encyclopedia of information for our business has been incredibly helpful. Being able to add procedures, forms, and other information to a location where any employee can quickly access them allows us to share knowledge and train others better.

A wiki is a powerful tool in sharing knowledge across the company. Rather than needing to explain every procedure, employees trying something new can first search the wiki to see if a documented process can show them what to do. This is especially useful if someone is out of the office for vacation. The wiki empowers others to cover for others whose processes are documented on the wiki – and employees can enjoy their vacation time without phone calls asking for help from work.

How a Wiki can Help Business

The reason a wiki is different from just a bunch of text documents somewhere on a hard drive is accessibility and editability. A wiki indexes information so that you can search and easily find what you need. Finding the “Time Off Request” form is so much easier to find through a search bar than digging through folders in Windows Explorer or asking HR for the form’s location.

Company Wiki Search

Second, a wiki’s true power comes in the ability to edit and update information. When Walmart changes a shipping requirement, I can go to the Walmart page, press the edit button, type the new requirement, and then hit save. The pages are so easy to edit that despite their busy schedules, my team is able to find time to document common procedures. Wikis allow for the ease of sharing information, so that knowledge of processes is not locked away in the minds of individual employees. Without such sharing, we are essentially throwing away all acquired knowledge each time someone is away from the office (temporarily or permanently).

Wikis are also great to help accomplish work that is not performed regularly. For example, every six months or so, our ERP system needs to be reinstalled on a certain machine because of a problem on that machine. The first time, it took several days for me to figure out how to do the install because of the machine’s unique setup. After figuring it out, I jotted some quick notes on the procedure and posted them on a wiki page under the IT section. Six months later, after I had long forgotten what I had done to fix the issue, the machine started erroring again – the signal to reinstall. This time, I jumped on the wiki and searched for the document. My notes popped up as the first result and the machine was as good as new 15 minutes later.

Wiki Options for Small Business to Consider

Company intranets and wikis are nothing new– but many businesses have yet to implement one. Fortunately, adding a company wiki is easy and affordable (there are many great, free options). Here are a few options to consider.

Confluence by Atlassian – $10+

Confluence LogoThis is the system my company uses. It’s not free, but for 10 users, it’s only $10. I like it because it’s very easy to use, has extensive documentation and tutorials on how to use it, and you can edit the theme to make it look more attractive. The last point isn’t important to me, but it helped get executive sign off to work on it (looks and appealing design are important at my company).

Confluence

MediaWiki – Free

Media WikiIf you use Wikipedia frequently, then you’ll feel right at home with MediaWiki. MediaWiki is what Wikipedia is based on. It’s free and very popular, which means there’s a strong community and many tutorials to help you easily install and run it.

MediaWiki

MediaWiki Sysadmin Hub (Installation Instructions)

Tiki Wiki – Free

Tiki Wiki LogoIf MediaWiki doesn’t have quite enough features that you’re looking for, then check out Tiki Wiki. For me, I didn’t want to be overwhelmed and miss my goal of company documentation, but you may want to take your wiki to the next level. Tiki Wiki boasts a very long list of features including the following:

  • Themes, newsletters, banners, and blogs
  • Shopping carts, payment, membership, and accounting tools
  • Friends, surveys, polls, chats, and other social networking
  • Issue tracking and other IT Help Desk tools
  • Spreadsheet, slideshow, drawing, and other office applications
  • Quizzes, webinar integration, and other e-learning tools
  • Many other additional features

Tiki Wiki

Tiki Wiki Installation Guide

WikkaWiki – Free

wikka_logoIf you’d rather go the other direction and want something more lightweight and simple, then check out WikkaWiki. It is designed to be much easier and straight-forward.

WikkaWiki

WikkaWiki Installation Guide

Dokuwiki – Free

Doku Wiki LogoFinally, Dokuwiki is a great option for company documentation because that’s what it’s built for. It requires no back-end database and can efficiently fulfill the documentation needs of a small company.

DokuWiki

DokuWiki Installation Guide

If you have an IT person that wants to do in-depth comparisons and look at even more options, then check out WikiMatrix. There, you can compare dozens of Wiki options and find one to fit your expertise and needs.

A Couple Factors to Consider

With all company tools, it’s important to consider the side-effects and consequences of using it. Here are some things you’ll want to consider before rolling the wiki out to the whole company.

Internal or external – do you want your wiki accessible from any internet connection or only while on your company’s local network? If you want it accessible from anywhere, then you’ll need to put some security login procedures in place to keep the world out of your company’s procedures.

Users and permissions – should everyone in the company access everything? If not, then you’ll need to edit user permissions and groups.

Moderation – will anyone be responsible to moderate and monitor the wiki’s usage? If you have a larger organization, then you may need someone to keep everything somewhat neat and organized.

File storage – we often upload Word and Excel documents to our wiki so everyone can access the latest version of a file. However, since our wiki stores the file within its programming, the program can become quite large as many files are added. Will you upload files to your wiki or just add links to the file’s location on your network?

Use more than text – as explained in my article [article about visual explanations], visuals are often much more helpful than just text. Be sure to include screenshots, pictures, or even video tutorials to make your procedures easier to learn.

Although your wiki may be sparse at first, be diligent in your implementation and building a company resource. We installed ours just 18 months ago, and my teammates and I now rely on it multiple times each day. It’s allowed us to do more and maintain corporate learning as some employees have moved on. Best of all, it empowers everyone in the organization to learn and effectively do more each day.

What does your company use to share its knowledge? Could a Wiki help you stop throwing knowledge away?

“He Ships, He Scores!” Improving Your Supply Chain with Games

Mario Fork Lift
Friday evening had arrived, and I was very excited to be on my way home. My wife and I were going on our first date in over four months – the first time we would leave our new daughter with family as we had some fun. After dinner, we went to one of my all-time favorite places: The Nicklecade. The Nicklecade is an arcade full of older games that each only cost $0.05 to play. Ten dollars can keep two people playing the gaming classics all evening. As we played Ski-ball, Dance Dance Revolution, San Francisco Rush racing, and even Guitar Hero, I was struck by how motivated I was on a Friday night.

I had just spent an entire week in typing emails at a computer and occasionally helping with repetitive physical tasks in the warehouse. Now, on a Friday night, I was in front of computers again pressing buttons and tossing ski-balls up the ramp over and over to try and beat my wife’s high score (which I was unable to top). How could the similar skills and activities be so fun and motivating as I worked for tickets, and less so as I worked for paychecks?

The Game of Work

My question caused me to recall a business book classic called The Game of Work by Charles Coonradt. Written in 1984, before a generation was raised on videogame achievements and scores, Coonradt was struck by a similar question to mine regarding construction workers. They would slowly plod along building a house, but during lunch time, they’d run to a local basketball court and give everything they had to obtain 4-on-4 lunchtime victory. Realizing that the principals of games could increase motivation and productivity in the workplace, Coonradt defined five rules of gamification – harnessing the power of game thinking in traditionally non-game work.

  1. Clearly defined goals – Put the basketball through the basket
  2. Better scorekeeping and scorecards – The score is 87 to 89, our team is down by two with a minute left in the game.
  3. More frequent feedback – The scoreboard tells you immediately if you made a goal, and a referee’s whistle will sound every time you break a rule
  4. A higher degree of personal choice of methods – Score points; it doesn’t matter if they are lay-ups, dunks, field goals, or 3-pointers
  5. Consistent coaching – whenever I have a question, I can look over to my coach for guidance or call a time out for more detailed help

Supply chain and operation works lends itself directly to this type of job enhancement. Below are some examples of how gamification has helped boost productivity.

Charles Schwab Throws Out a Challenge

In Dale Carnegie’s book, How to Win Friends and Influence People, the story of Charles Schwab keeping score is a fun example of early gamification.

“Charles Schwab had a mill manager whose people weren’t producing their quota of work.

“How is it,” Schwab asked him, “that a manager as capable as you can’t make this mill turn out what it should?”

“I don’t know,” the manager replied. “I’ve coaxed the men, I’ve pushed them, I’ve sworn and cussed, I’ve threatened them with damnation and being fired. But nothing works. They just won’t produce.”

This conversation took place at the end of the day, just before the night shift came on. Schwab asked the manager for a piece of chalk, then, turning to the nearest man, asked: “How many heats did your shift make today?”

“Six.”

Without another word, Schwab chalked a big figure six on the floor, and walked away.

When the night shift came in, they saw the “6” and asked what it meant.

“The big boss was in here today,” the day people said. “He asked us how many heats we made, and we told him six. He chalked it down on the floor.”

The next morning Schwab walked through the mill again. The night shift had rubbed out “6” and replaced it with a big “7.”

When the day shift reported for work the next morning, they saw a big “7” chalked on the floor. So the night shift thought they were better than the day shift did they? Well, they would show the night shift a thing or two. The crew pitched in with enthusiasm, and when they quit that night, they left behind them an enormous, swaggering “10.” Things were stepping up.

Shortly this mill, which had been lagging way behind in production, was turning out more work than any other mill in the plant. The principle?

Let Charles Schwab say it in his own words: “The way to get things done,” says Schwab, “is to stimulate competition. I do not mean in a sordid, money-getting way, but in the desire to excel.”

Quoted from Dale Carnegie’s How to Win Friends and Influence People

A Jewelry Manufacturer Keeps High Scores

A factory that made recognition jewelry created a very simple computer program in the 1980s. The employee would log in his or her manufacturing job, say polishing 100 medallions, and the computer would time him. After the employee completed the work, he or she would see how quickly he or she had accomplished the work. The computer then ranked him or her against personal past records as well as everyone else. The program let the employee know whether the score was above or below average – and by how much. This simple program quickly increased efficiency of the entire factory as everyone tried to beat their coworker and their own records.

Real-time Shipping Dashboard Focused our Warehouse

A couple years ago, as our company quickly grew, we felt a need for better visibility to our warehouse operations. I had worked at Sonic in high school where little TV screens showed each order and helped me know how many hamburgers to make. Could we make a dashboard that showed us what orders we had to ship? With some VBA coding, I was able to create a real-time shipping dashboard that did just that. Every ten minutes, the computer would automatically update from our system database and show the orders we needed to ship and had shipped already that day. If an order went late, it would show up in red. As long as everything was green on the dashboard, we knew we were shipping on time and winning for the company. The dashboard was so effective that I was able to completely step away from warehouse operations as the team worked together to keep the dashboard green – or score points –rather than a manager directing every step.

Ideas for Gamifying Your Supply Chain

Having a better grasp of the principals of gamification, how can you better apply them in your supply chain? Here are some ideas:

  • Vendor Scorecards – We’ve been working extensively on a comprehensive vendor-scoring program. We are giving quarterly feedback on how key vendors are doing on dimensions important to our success. We also hope to build a “Vendor of the Year” award to reward good scores. Without the scorecard, however, our vendors can’t be confident in how they can better serve us as their customer.Crosstraining
  • Cross-training Achievements – An easy way to turn long-term training into a game is to create a grid of people and processes. As employees learn new processes, they receive a sticker that becomes a badge of cross-training achievement. Fast-food restaurants do this all the time. When we put this together in our warehouse, I was amazed by how quickly people began asking their supervisor to train them on new skills so that they could mark it off on the grid.
  • Pick-to-voice Warehouse Picking Systems – Wearing a headset that tells you where to pick your next order is a popular technology in large warehouses. These pick-to-voice systems often track efficiency and set goals for each picker. Taking that technology a step further, you could keep score on a large screen or let pickers “level up.” As employees reach certain scores, they could be rewarded with more difficult orders to pick – or move into new zones of the warehouse. Even adding the “1UP” sound from Super Mario and other video game trademarks could make order picking more engaging.
  • Pallet Wrapping Competition – If you have 30 pallets to wrap by hand, divide everyone into three teams and see who can wrap 10 in the shortest amount of time. Whenever students from local colleges tour our company, I ask them to compete in a “warehouse Olympics” game to see how they fare with the most basic of supply chain tasks. I quite enjoy watching college students race, and often struggle, to tape boxes, sort returns, and wrap pallets.
  • Vendor Terms Competition – Our CEO created a list of vendors that he wanted a dozen employees to contact and ask for extended payment terms. Each Vendor had an employee assigned to it. The list was in a Google spreadsheet we all shared, which allowed us to see each other’s progress in real-time. We could approach the request any way we wanted, and we even received a small gift card when we achieved our goal.
  • Real-time Dashboards and Metrics – Building on our shipping dashboard, we now have a large handful of other real-time dashboards. Purchase Orders, Accounts Receivable, and Accounts Payable are just a few examples of how we keep score. Our jobs become a game of keeping the dashboards free of red lines, which helps us focus on activities that help the company.

Supply chain is the ideal place to apply gamification principals. Large amounts of real-time data make keeping score much more achievable than in other less data-driven disciplines.

Whether it’s PlayStation 4, the NFL, or Monopoly, everyone on my team has a passion for games. Tweaking processes to channel that passion has helped my company in powerful ways. Applying Coonradt’s five “Game of Work” principals helps everyone better achieve results that help the company and enjoy their work more. Most importantly, that increase in motivation helps us become a stronger company and a more competitive supply chain.

Now instead of getting back to work, get back to gaming.

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If you’d like to learn more, please check out the below sites that were a source for parts of this article.