Procedural Systems Blogs Archives

Should You Be Cross-Docking?

Have you ever thought during your inventory management day, “Man, I think I could take the products off the truck in receiving and send them straight out on the shipping side?” Well, many people have and do. This practice is called cross-docking, and there are several ways to implement it.

Cross-docking is a strategy especially popular for time-sensitive industries or industries with perishable goods. Having little to no storage time is perfect for those types of industries and could also be a good fit for your organization. In this article, we will discuss cross-docking, along with examples and a general step-by-step guide. After that, it’s up to you to find industry-specific strategies that fit your business. But don’t worry – there are some common practices that you can learn from and mimic, so you don’t have to reinvent the wheel.

A Cross-Docking Example

Let’s start with a quick example to paint the picture properly. Imagine that you own a grocery store chain. You have fresh fruits, dairy products, and canned goods that arrive daily from different suppliers at the central distribution center. But you have been having some storage issues. Your aim is to get the products to your individual retail stores quickly and efficiently, and after learning about cross-docking, you know that strategy will get you there.

As the delivery trucks roll in, the items are sorted quickly, grouped by their respective categories, and, without delay, transferred to waiting outbound trucks. You tell your team to consolidate products destined for specific stores. Once loaded up, the trucks make their way to your individual stores across the city. Now, the fresh produce stays crisp and dairy products remain cool. You have helped minimize storage time, lower inventory costs, keep the shelves stocked with various products, and improve customer experience.

What Is Cross-Docking? Definition, Types & Advantages, Abby Jenkins for NetSuite

Implementing Cross-Docking with the Consolidation Method

Now, let’s learn about the three phases of implementation for the consolidation method of cross-docking.

1. Receiving and Sorting

The first phase is receiving and sorting. The inbound shipment from the various suppliers will arrive at the central distribution center. You must sort the products based on their intended destination. This process could involve breaking down pallets and grouping the products for specific store orders. It is the most time-consuming part of the process and should involve a lot of coordination and communication. A smooth single-touch process should be adopted here.

2. Transfer and Consolidate

The second phase is to transfer and consolidate. Products sorted are then moved directly from the receiving docks to the outbound loading docks without being placed in long-term storage. The products arrive at the outbound docks and are matched with the corresponding store orders. Some people like to use floor markers or hang signs over the staging areas. Then, you’ll consolidate the products where items intended for the same store are grouped.

3. Outbound Shipping

The last phase is all about the outbound shipping. Once all the required products for a certain store order have been grouped and gathered at the outbound dock, they are loaded onto the delivery trucks specified just for that store. Trucks leave the distribution center as soon as they are fully loaded, which minimizes storage and time. The trucks make their deliveries directly to the retail stores, reducing transportation time and costs. It’s a simple win-win process.

Multiple Methods for Cross-Docking Success

There are many ways to implement the cross-docking technique. There is the flow-through method, an immediate transfer, the consolidation method we just learned, and the deconsolidation method, which breaks larger shipments into smaller ones. These are the most popular cross-docking methods and usually fit most situations.

There are warehouse management systems, transportation management systems, and real-time tracking and monitoring solutions that can help you optimize this cross-docking process and provide visibility and control of your inventory and shipments. Explore these options and decide which product is right for you and your business.

Is Cross-Docking Right for Your Business?

To see if cross-docking is appropriate for your business, you should thoroughly analyze your supply chain, product characteristics, and demand patterns. Cross-docking is most effective for products with high turnover rates, stable demand, and products that don’t require long-term storage. As previously stated, perishable goods and fast-moving consumer goods are ideal candidates for cross-docking.

Several challenges can arise when implementing cross-docking. There is a distinct need to be precise in coordination, timing, and organization. Your team must be able to manage large volumes of incoming and outgoing shipments; you must be mindful of product quality and accuracy; you must also be able to handle potential disruptions in the supply chain. Having your forecasting systems operational and predicting demand shifts or supply chain issues is paramount to ensuring that your transition to cross-docking is smooth and fruitful.

While it can be challenging to implement cross-docking depending on your industry, the practice may benefit your business’s bottom line. It includes reduced storage costs, faster order fulfillment, lower inventory holding costs, improved supply chain efficiency, and reduced product obsolescence risk. Quick, smooth processes almost always mean cost savings.

Train Your Team and Expect Success

When you’re ready to implement cross-docking, it is key to make the process simple and easy for your employees to understand. Implementing strict quality controls and labeling procedures, using technology such as barcode scanners, and training employees adequately to minimize errors are all critical for cross-docking success.

Supply Chain Management

Navigating the supply chain to maximize profitability and sustainability

Have you ever thought about where your shoes were made? Or wondered where your IOS device was put together? They were likely made and assembled far from where you live. One thing is for sure, the products we enjoy every day have been a part of a supply chain effort.

The supply chain has gained strategic prominence as companies look to gain a competitive advantage in the markets they serve. The focus for companies is no longer on product design or facility locations. The supply chain is now responsible for adding value to customers and the company’s bottom line. Depending on industry, final product or service, and supply chain efficiency, the supply chain cost could be as much as 70-80% of the cost of goods sold (COGS).

Understanding supply chain

Before we discuss supply chain management, it’s important to have a basic understanding of the term “supply chain” itself. First, a supply chain can center around services provided rather than physical products. In this article, we’ll be focusing on physical products. So, what is the supply chain? A simple way to describe the supply chain is the process of getting a product from point A to point B.

How does the supply chain work? First, suppliers start the process through the purchase of raw materials which are shipped via boats, trucks, ships, and trains to manufacturers. Products are then shipped again with the end of goal of getting the product to stores or distribution/fulfillment centers on time and in the most cost-efficient manner for consumer use. Without this process, you will not be able to enjoy your cell phone or the shoes you wear.

As you can imagine, there is a lot of activity that takes place before your shoes get to you as a finished product. It starts from the raw material state and makes its way through the supply chain until it ultimately arrives at a physical location where you find them on the shelf or website for purchase. The efficiency and flow of raw materials to the finished pair of shoes has been impacted by supply chain management.

Supply chain management

The supply chain can be complex with many moving parts involved. This means that management of the process is critical to maintain efficiency. Efficiency is the goal of supply chain management (SCM). All stages need to be managed to attain efficiency, including suppliers, manufacturers, warehouses, and stores so the product is available at the right time, at the right locations, and at the cheapest possible price based on demand. All this must be in balance to bring the best value to the end customer.

Let’s look at what impacts the final pricing to the end user or consumer. The customer pays the retailer who pays the distributor, who pays the wholesalers, who pay the manufacturers, who pay the raw materials suppliers. If any step in the chain is inefficient in the process, pricing, or completion of the step, it can cause a significant negative financial impact.

Simply put, SCM is the control all production, shipment, and distribution of product. SCM involves keeping tight controls of inventory, production, sales, and vendor activities. The end goals of SCM are to cut unnecessary costs and deliver end products to consumers as quickly and efficiently as possible.

SCM with KPIs

SCM also involves improving productivity, quality, and efficiency of operations. This can be accomplished through setting key performance indicators (KPIs). Let’s look at a couple KPIs in supply chain management. The supply of goods industry is simple to understand. It’s about making the goods, selling the goods, and then collecting on the goods. This is why having a KPI to measure the time of paying for materials and receiving payments for products provided is a must. Turning invested funds quickly into additional cash on hand should be measured.

A second KPI should be measuring product orders rendered without error or defects. This speaks to quality control throughout the supply chain process. Having 100 IOS devices produced and sold but 30 being returned due to defects, in need of repair, or other reasons not caused by the end user is a big problem. Another KPI that should be measured is the gross profit earned on the inventory used to produce products. This speaks largely to the ability of supply chain managers in their negotiations to procure the necessary materials and inventory.

Difficulties with SCM

Supply chain management has become increasingly difficult since the Covid-19 pandemic for several reasons. First, having too much dependency on certain suppliers, logistics companies, etc. in the chain can cause major issues. Relying only on specific suppliers created a backlog of raw materials and negatively impacted the movement and production of end user products. This served as an important lesson for businesses everywhere – do not rely solely on only a few third-party companies. While relationships are important in the business world, risk assessment should also be a part of running an organization.

Second, many companies reacted to the pandemic by stockpiling materials to avoid the lack of production. Unfortunately this results in capital being tied up in materials, etc., that are not generating revenue, causing a negative impact on cash flow. This is why many companies are diversifying more than ever and investing in more robust data points with their business partners to make the best decisions for their business.

Conclusion

In conclusion, effective supply chain management is essential for maximizing profitability and sustainability in today’s competitive markets. By focusing on efficiency, setting key performance indicators, and diversifying suppliers, companies can mitigate risks and enhance the flow of goods from raw materials to end consumers. As the complexities of the global supply chain continue to evolve, businesses must remain agile and innovative to ensure they deliver value at every stage of the process. By doing so, they not only improve their bottom line but also meet the growing expectations of their customers.

Business Development by Way of KPIs

Maximizing Business Potential: The Strategic Edge of KPIs

Dive into the heart of business excellence with Key Performance Indicators (KPIs)—your secret weapon in navigating the complex world of business development. These aren’t just metrics; they are the compass that directs your venture towards unparalleled success. Wondering how to harness this power? Fear not! Let’s explore how to unlock the full potential of KPIs, turning them from a bewildering concept into your most trusted ally in achieving business success.

The Essentials of KPIs

At the heart of business efficiency lies the critical question: How do we measure our current performance against our potential? This is where KPIs shine. Simplified, KPIs are metrics that help track performance across various aspects of your business, providing a clear picture of where you stand and where you could be heading. They help pinpoint what’s expected, what’s possible, and the direction of your business trends. By setting specific, measurable goals through KPIs, businesses can streamline their processes, enhance productivity, and ultimately, achieve their objectives more effectively.

Practical Application: Real-World Examples

Understanding KPIs is one thing; applying them is another. Let’s look at tangible examples to grasp their utility better. For instance, a coffee shop owner might use KPIs to track the sale of large drinks versus small ones, aiming to increase profitability by selling more of the former. Similarly, a rental company might monitor the average number of items rented per sale, setting targets to boost this figure. These examples illustrate how KPIs can be tailored to specific business needs, providing actionable insights that drive growth.

Setting and Achieving Your KPI Goals

A crucial step in leveraging KPIs is setting achievable, data-driven goals. By analyzing historical performance data, businesses can establish ambitious and grounded benchmarks. This approach not only sets a clear target but also motivates the team by showing what’s been possible in the past and pushing for even better results.

Choosing the Right KPIs for Your Business

The key to effective KPI implementation lies in selecting indicators that align with your overarching business goals. Whether you aim to boost sales, enhance operational efficiency, or improve employee punctuality, there are KPIs designed to track and promote progress in these areas. Starting with a few focused metrics can significantly impact, allowing for more manageable tracking and improvement.

Training, Tracking, and Discussing Progress

Implementing KPIs involves more than just number-crunching. It requires a holistic approach that includes training employees on the importance of these metrics, continuously tracking performance, and fostering an open dialogue about the findings. Engaging your team in this process not only enhances their understanding and buy-in but also encourages a culture of continuous improvement.

The Impact of KPIs on Business Culture

Beyond mere numbers, KPIs have the power to transform business culture. They introduce a layer of transparency and accountability, where achievements are recognized, and areas for improvement are openly discussed. For instance, by showcasing sales conversion rates, employees are encouraged to learn from the top performers, fostering a healthy competitive spirit that drives everyone to excel.

The Strategic Advantage of KPIs

In conclusion, KPIs are not just a tool for measuring performance; they are a strategic asset that can guide your business toward its objectives. By carefully selecting, implementing, and discussing KPIs, you create a dynamic environment where continuous improvement is not just encouraged but ingrained in your company’s culture. Embrace KPIs, and watch your business thrive in efficiency and effectiveness.

Improving Operational Systems

A Quick Guide to Improving Your Business

Is growing your business a challenge? Do you want to retain your best talent? Do you want to have predictability in your business performance?

If you answered yes to the above questions, it’s time to improve your operational systems. The goal of improving operational systems is to boost sales and customer satisfaction and improve margins with fewer financial and people resources. This sounds great, right?

So, what happens when you don’t improve operational efficiency? You risk financial strain on the company and your employees will feel the stress of inefficient processes. Often, employees become “quiet quitters” which means they come to work to get through the day and wait for a paycheck. Imagine this happening week after week, month after month, and year after year!

Many times, employees know where the business can be improved, but the culture of leadership isn’t one that inspires them to bring forth their ideas or input. Without input from employees at every level of your company, you set your team up for frustration. Frustration, in turn, leads to losing key performers throughout the company and ultimately your customers going elsewhere.

As a business owner, your goal is always to improve performance in the fastest, least expensive, and most predictable manner for the business. So how is this accomplished? It all starts with measurements and benchmarks of your current performance and where you want your performance and efficiency to improve. You can’t improve what you don’t measure. Measurement through KPIs (key performance indicators) is critical. Keep in mind, KPIs will vary by industry.

Operational improvement is centered around key pillars: people, processes, technology, and funding. Within the pillars you must focus on input vs. output. The input pillar includes but is not limited to people, sales, time, and effort. Output centers around things like revenue, customer satisfaction, quality, and speed of production. The KPIs you build must be tied to measuring within these pillars.

Two main factors affect operational system enhancement: the variation in operational costs and talent across different regions, and the selection of KPIs aligned with the four critical pillars. Effective improvement and efficiency hinge on choosing measurable and quantifiable KPIs relevant to these pillars, reflecting regional cost differences and strategic choices.

So, how do we increase operational efficiency? Let’s start with the biggest asset and in most cases the biggest expense in a lot of companies: People. Nothing happens in any company without the right people in the right positions. This is why your people should take priority in improving operational systems. Do not make the mistake of getting bogged down in numbers. Your people are the ones who create relationships with your customers. Your people are also the ones who ultimately decide whether your business is successful or not. Having a robust incentive plan and training program will keep your key personnel engaged with improving your company’s operational efficiency.

Next, you must remove any bottlenecks within the company. Whether it’s people or outdated technology, these areas of slow down must be corrected. As things improve, you certainly do not want the flow of the improvement to stall. Bottlenecks can be detrimental to your company and any further improvements. Making these hard decisions to remove the bottlenecks blocking the way of efficiency makes or breaks the confidence your team will have in your ability to lead your company to new heights.

Once you have removed or corrected the bottlenecks, it’s time to implement higher standards. With improved efficiency, you can get a better idea of your team’s true capabilities. Why not change the standard? “Standard” is the minimum acceptable level of efficiency. Once a standard has been achieved consistently, you should communicate those wins and not accept less than your team’s best performance.

Keep in mind that you must be careful about overwhelming your team. Too much change too fast can have an unintentional adverse effect on improved efficiency. This is why you must observe and acknowledge the changes along the way. This allows your team to see they can improve operational efficiency and understand how and why the systems improved.

Now you are ready to evaluate the systems through observations, departmental checklists, and peer-to-peer input. Checklists must not be used as a form of micromanaging. Instead, checklists should be treated as a tool to help everyone stay focused on the areas that need improvement and to assist everyone with executing and developing consistent behaviors and processes. Peer-to-peer involvement allows department leaders to take chances and think outside the box when trying new processes and procedures.

Next, you should keep information up to date. There is nothing more demoralizing for a team than when they improve a process and are not recognized for it. By this time, there has been a lot of training and coaching happening at every level to create new best practices. Ensuring the latest data is communicated clearly to everyone is a must for the efforts to continue. Automate your communication when possible.

Finally, visualize your operational improvements. Visual aids are the most effective means for information retention. Install monitors or dashboards across your organization to display progress, or update a large whiteboard in the breakroom with colorful, dashboard-style KPIs. This approach doesn’t need to be costly, just efficient.

In conclusion, enhancing operational efficiency is not just a task but a strategic necessity that drives business growth, employee satisfaction, and customer loyalty. By prioritizing people, identifying and eliminating bottlenecks, setting higher standards, carefully managing change, evaluating systems with a collaborative approach, and recognizing improvements visually and effectively, businesses can create a dynamic environment where operational excellence is the norm. Remember, the journey towards operational improvement is continuous, requiring consistent measurement, adaptation, and engagement at all levels of the organization. By adopting these practices, businesses can achieve not only immediate gains in efficiency and performance but also set the foundation for sustained success and resilience in an ever-changing market landscape.

The Critical Importance of Cybersecurity for Small Businesses: A Case Study

In today’s digital age, the value of information cannot be overstated, especially for small businesses operating in sensitive sectors such as healthcare. This article delves into the crucial aspects of cybersecurity and data preservation through a detailed case study of a small surgery center, highlighting the pervasive threats and offering concrete steps to enhance data security.

The Awakening to Cyber Threats

One seemingly ordinary morning at a surgery center, the routine was disrupted by systemic failures in communication technologies, including email and phone systems. The center’s network was experiencing over 7,000 intrusion attempts per minute. This incident underscores a critical question: Why would a small healthcare facility be targeted by hackers? The answer lies in the value of personal information, particularly of the elderly, who are more susceptible to identity theft.

The Value of Health Data

The theft of health data is not just about accessing medical records; it’s about exploiting the comprehensive personal information of individuals. With the increasing incidents of data breaches, like the significant 2019 First American Financial Corporation breach, the potential for fraud and theft is immense. Health data, potentially worth over $1,000 per record on the dark web, becomes a lucrative target for hackers.

The State of Cybersecurity in Healthcare

Despite the growing threats, many healthcare organizations remain underprepared for cyberattacks. Key findings from Kaspersky’s “Cyber Pulse: The State of Cybersecurity in Healthcare” reveal a lack of cybersecurity training and awareness among healthcare professionals. This lack of preparedness is alarming, given the escalating number of attacks, particularly ransomware, during periods of vulnerability such as the COVID-19 pandemic.

The Scale of the Problem

The magnitude of data breaches in healthcare is staggering, with the Health and Human Services (HHS) tracking hundreds of significant breaches. The financial implications of these breaches are astronomical, underscoring the critical need for robust cybersecurity measures.

Cybersecurity Strategies for Small Businesses

To combat these threats, small businesses must adopt comprehensive cybersecurity strategies. This includes leveraging cloud-based infrastructures for enhanced security management, employing encryption and blockchain technology, adhering to secure data standards, and ensuring regular data backups.

Implementing Best Practices

Beyond technical solutions, businesses must foster a culture of cybersecurity vigilance. This involves regular training for employees, frequent password changes, the use of multifactor authentication, and a strategic investment in IT infrastructure. Understanding and continually assessing the cybersecurity posture of the business is essential for preventing breaches and minimizing potential liabilities.

Conclusion: Adopt a Proactive Approach

The experience of the surgery center serves as a stark reminder of the vulnerabilities that small businesses face in the digital realm. Cybersecurity is not merely a technical issue but a fundamental aspect of business strategy that requires ongoing attention and resources. By adopting a proactive approach to cybersecurity, small businesses can protect themselves and their clients from the ever-evolving threat landscape, ensuring their information’s integrity and security.

A Case Study in Data Security: Learning from a Small Business Experience

This case study delves into the real-world challenges and lessons learned by a successful Business-to-Business service company with over 20 years of experience, a revenue of $6,000,000, and a workforce of over 25 employees. As small business owners, understanding the nuances of data security and the risks of cyberattacks is crucial, and this case offers valuable insights.

The Company’s Security Framework

The company in focus had implemented robust data security measures, including strong password protections, server-based applications on a locally secured server, a business-class firewall, and a secured Ethernet and WiFi network. Additionally, they employed near real-time cloud-based backup for their server and network computers. Despite these precautions, the company had not invested in cyber insurance.

The Attack: A Wake-Up Call

The company’s operations were heavily reliant on digital systems for billing, payments, and maintaining financial records. Despite their strong security measures, they faced a devastating ransomware attack. This incident involved hackers compromising the cloud backup and encrypting data on the servers and computers, demanding a ransom equivalent to a significant payment received from a key client.

Response and Recovery

Choosing not to negotiate with cybercriminals, the company decided to rebuild their accounting system from the start of the current year. This involved shutting down all banking accounts, opening new ones with enhanced security, and painstakingly re-entering paper transaction trails. This process took three people over four months, significantly impacting the company’s operations and leading to the loss of valuable historical data.

Unnoticed Red Flags

In hindsight, several incidents indicated potential vulnerabilities. These included a suspicious inquiry about a check’s legitimacy and a past incident of check fraud. These early signs of probing for vulnerabilities were initially overlooked but later recognized as important clues.

Lessons Learned

The key lessons from this experience are multifaceted. They include the importance of not dismissing financial anomalies, enhancing banking security, and separating funds to limit exposure. The company learned that no data security system is infallible and that regular offline backups are crucial. Additionally, they realized the importance of assessing risks and developing mitigation strategies, including considering cyber insurance.

Summary and Recommendations

This case study underscores the reality of cybercrime in today’s globalized economy. Small business owners must not rely on past security measures and should constantly update their cybersecurity strategies. Emphasizing the use of strong, unique passwords and two-factor authentication is crucial. The experience serves as a reminder that understanding and preparing for the risks of cybercrime is not just necessary but imperative for the survival and success of any business in the digital age.

How To Plan For A Management Buyout: Tips For Successful Business Owners

How to Plan for a Management Buyout: Tips for Successful Business Owners

Many entrepreneurs dream of growing their business and taking it to the next level. After all, that’s what motivates people to start businesses in the first place. However, transitioning from owner-operator to business owner or managing director can be a scary and challenging process. Luckily, there are several things you can do in advance to help ease some of the stress and anxiety so you’re more prepared when the time comes. A management buyout (MBO) is a strategic financial transaction that aims to acquire control of your business from you as a sole and current owner through a financing agreement with your board of directors. If you’re ready to step away from running the day-to-day operations of your company, and instead focus on growing your capital into something bigger and better, then read on! You may even be surprised to learn just how much MBOs can help you grow your business or consolidate operations into one organization.

What is a Management Buyout?

A management buyout (MBO) is a financial transaction that aims to acquire control of your business from you as a sole owner through an agreement with your board of directors. It’s a strategic financial transaction that can serve many purposes, including:

● Providing a cash infusion to accelerate growth and bring about a new era of success for your company.

● Experimenting with new leadership models that can help you identify and cultivate future leaders of the management team.

● Alleviating debt or financial pressure on your company by distributing ownership of the business among existing shareholders.

● Extend your time in the business world by acquiring control of your company for a limited time before passing the reins over to someone else as manager.

● Acquiring control of your business without taking on all the financial risks of debt and responsibilities of owning a business.

Why Conduct an Management Buyout?

There are many reasons you might want to consider conducting an MBO. The most common reasons include the following:

● Exiting your company by selling it to another company or individual. An MBO can provide you with the cash flow you need to conduct due diligence on potential buyers. It can also provide you with immediate liquidity to sell your company if you discover another buyer or opportunity.

● Increasing the value of your company. You might conduct an MBO to raise additional financing, to acquire another company, or to pursue an acquisition strategy.

● Demonstrating strategic clarity and vision. Conducting an MBO might be the best course of action to show your investors, lenders, and the financing community that you have a clear vision for your business and are willing to take bold steps toward making it a success.

● Reducing your ownership stake in the company. If your company is valued too high relative to your ownership stake, you might want to consider selling it to someone else through an MBO.

● Maximizing tax benefits. A management buyout may be the best way to maximize tax benefits such as the Section 77 deduction, which allows businesses to expense the cost of certain assets over the course of the year.

● Conducting an MBO transaction to bring new management team members or an outside owner into the fold.

● Conducting a management buyout to find a financial partner to help you grow or acquire your company.

Key Terms You’ll Need to Know

● Board of directors – The group of people appointed to serve as the fiduciary agents of the company, with authority for asset management, financing, and conducting business operations on behalf of the company.

● Buy-sell – The sale of stock by an existing owner to purchase public or private equity in another company.

● Buy-sell agreement – The formal arrangement between the owner and the management team that sets forth the terms by which the management team will be compensated if the owner chooses to sell the company.

● Buy-sell back(1) – The agreement between two companies that allows one company to buy back shares from the other company at a price determined by the management team.

● Buy-sell back(2) – A variation of a buy-sell back in which another company acquires the first company.

● Company – The legal entity that owns the assets of the business.

● Equity – Money previously invested in a business, usually as stocks or shares of ownership. Public equity is a share in a publicly traded company. Private equity is a share in a company that is not publicly traded.

● Leveraged Buyout – A leveraged buyout (or leveraged management buyout) occurs when one company negotiates the process of acquiring another using mostly borrowed funds. The purpose may be to take the company private or to spin off part of the business.

● Management team – The management team is the current group of people who are responsible for running the company.

● Proxy – A proxy is a written authorization that a shareholder can use to cast a vote for a particular choice in a company’s existing management.

● Section 77 – A deduction allowing for the expensing or financing of certain assets bought for business use over a certain period.

● Stock – Ownership interests in a company that give investors the right to receive dividends, share votes, and participate in company decisions.

● Voting rights – The ability of a shareholder to cast a vote for the company’s existing management team.

Benefits of a Management Buyout for the Company and the Owner

1. One of the main benefits of an MBO is that it preserves value for current shareholders by affording them immediate liquidity and providing them with a share of the upside if the business succeeds.

2. Many owners sell their company to bring stakes of the ownership to management teams.

3. A key benefit of an MBO transaction is that, if the business succeeds, it provides the existing shareholders with access to funding.

4. Finally, an MBO lets the current management team acquire ownership in the business, subject to certain exceptions.

Securing Financial Advice and Professional Help with a Management Buyout

Having a sound and comprehensive financial plan can help you make informed decisions, but it’s important to remember that you can’t make solid business decisions without good business sense. This means you’ll need to get some financial planning advice to help you make the best choices for your company. You’ll also want to ensure you have the right professional assistance on your side. You’ll want to work with professional advisors who are experienced with managing MBOs, and experienced with helping businesses transition to a new ownership structure and management team. The appropriate professional advice and support will prevent you from becoming overwhelmed or discouraged.

How to Conduct an MBO

There are many things to consider before initiating an MBO. First and foremost, you should decide if you truly want to take this route. There are a lot of risks and challenges to conducting an MBO. The better prepared you are for this process, the more likely you are to find success. It’s important to get professional financial and legal advice to make certain that the process goes as smoothly as possible. Next, determine how much cash flow you’d like to raise, and have a plan to acquire that money. Consider conducting an MBO as part of a financial restructuring or as a sale of your company. The choice will likely be determined by the amount of money you’d like to raise.

Things to Consider When Executing Management Buyouts

As with any major business decision, you’ll want to approach a buyout in your company with extreme care and thoughtfulness. First, you’ll want to assess the deal’s financial modeling and feasibility based on the value of your company and the value of the prospective buyer. That will determine the price you’re

willing to accept for your company. Next, you’ll want to evaluate the terms of the deal based on your personal preferences, your company’s needs, and the buyer’s needs. For example, you may want a majority of the board of directors or the existing management teams to stay in place, while the buyer may prefer to have all hands on deck. Once you’ve gathered all this information, you can begin reaching out to potential buyers and negotiating the terms of the deal.

The Negotiations Before the Closing

Most MBOs involve extensive negotiations before the closing. There are a few reasons for this, and it’s important to understand them before you make any decisions about how to approach negotiations. First, the buyer may want to negotiate the price of the acquisition down from the original asking price. Second, the seller may want to negotiate the price up from the price already negotiated. Third, both sides may want to renegotiate various terms, such as the amount of equity each side is getting, the method of acquiring public or private equity, the length of the acquisition, and even the terms of the transaction itself.

Final Words: Is a Management Buyout Right for You?

The best way to see if an MBO is right for your company is to try it out. That means approaching management buyouts as a test case, not a permanent change to your business model. That means you’ll want to do everything you’d do under normal circumstances, but you’ll also want to evaluate the experience as a trial run. For example, you may want to keep a running scorecard of how things are going and ask your advisors and accountant for feedback on the process. Remember, however, that an MBO is not a permanent change. It’s simply an approach to seeing whether management buyouts are desirable for your company. Once you’ve gathered all this information, you can decide whether an MBO is appropriate for your company and you.

Key Performance Indicators (KPIs): The Pros and Cons.

Cogent Analytics Media

What is KPI? Let’s begin by defining KPIs as quantifiable performance that measures a business objective over time. The goals are tied to milestones and gauge progress against an organization’s strategic goals. The KPIs intend to align people across the organization to measure employee performance, making them accountable for their roles and responsibilities (RP). In theory, the performance KPIs allow management to introduce adjustments aligning for a balanced scorecard. Administration adapts performance using leading indicators and objectives for the right KPI results.

Choosing your leading indicators.

As soon as Cogent Analytics arrives onsite at a new client, our mandate is to provide our clients with a front view of their company by introducing the cash management system (CMS) and the sales trend analysis (STA). I also focus on performing the stockholders’ interview and defining the organization’s roles, responsibilities (RPs), accountabilities, and key performance indicators. During this exercise, I identify opportunities to capture all quick wins1. Upon completing this exercise, we seek organizational consensus. I will work with the RPs to implement strategic KPIs. We use multiple tools and must choose a fit-for-purpose tool. Success shows the best results by working on the behaviors and modifying leading indicators. For employee satisfaction, align best practices with performance and compensation.

Identifying process indicators in financial KPI.

The typical application of financial KPIs is monitoring the budget and profit plan, actual versus forecasted, and introducing actions to the process indicators to correct deviations. Key performance indicators are the perfect management tool applied widely throughout the organization’s processes. The alignment of profit sharing with KPIs is one of the pitfalls of the system.

KPI examples.

There are many examples of financial KPIs manipulations that backfire. The most recent prominent KPI example failure is West Fargo Bank2 (WFB) and the loss of clients and public credibility. WFB business goals #2 KPI: Generate new qualified leads and acquire new customers. Bank officers were remunerated, among others, as a function of this KPI metric. Inflating and falsifying new customer numbers lead to misleading metrics and incorrect customer KPIs. As a result, the bank lost credibility, which caused, among others, the CEO3 to resign, and affected the overall net profit.

On a more personal note, a positive example I had a hand in. For ten years, I was responsible for the audit comity of a financial institution. Management recommended and implemented a profit plan with the leading indicator tied to individual performance KPIs. After experiencing multiple deviations from norms and established procedures, I concluded that the only truly effective KPI that worked in this situation was the one associated with the distributions to owners. Therefore, our specific goal became directing all efforts toward quantitative indicators making a profit, and providing an adequate return to the owners.

Important KPI indicators.

Selecting the right KPI indicators is critical to achieving successful implementation. Keep it simple at a high level. Refrain from overthinking or over-complicating the sales KPIs. For key results, ask the RP how his work directly affects profit. Cogent Analytics validates our clients and dedicates time to implementing strategic KPIs. We work on your behavior and closely monitor the metric and performance indicators during implementation. When working with different KPIs, we consult with the owners, make them aware of the pitfalls, and adjust accordingly. Use leading KPIs that are factual and make the RP accountable.

Testing your key performance indicators.

Further, test and audit your chosen performance indicator to meet the desired objective. Always test against your strategic objectives and business goals and adjust where needed. Executing the correct key performance indicators shows in your gross profit margin results.

Construction Management. How To Improve Your Construction Productivity Process

Construction management is one of the most time-consuming operations. A construction project requires a lot of focus and attention to detail to evaluate its productivity. Spending excessive time per project is why you must find ways to make construction processes more efficient and cost-effective. Furthermore, with the increased demand for new housing, commercial properties, industrial space, and other similar facilities, there has been an exponential increase in construction projects in recent years. These growth patterns make it even more imperative that you improve your construction planning process in order to remain competitive against your competitors.

Monitoring the construction project’s productivity levels.

Construction managers need to know exactly what their team is doing in terms of productivity. This knowledge will help them to assess the actual efficiency of their process and get valuable insights on where they can improve. A project manager will first want to start tracking productivity metrics using construction project management software. The metrics you can track include revenue per employee, cost per job, revenue per hour, and others. The metrics that you track must be real measures of productivity. This data will help managers to understand how you are currently performing and where you can improve construction planning and skills. It will also help you better understand what your competitors are doing and what areas you can improve to gain an advantage.

Varying metrics in the construction industry.

Many companies use different forms of analysis to measure productivity within the construction industry. Some of these include revenue per employee, revenue per job, cost per job, revenue per hour, and many more. The way you manage the process of productivity and increase revenue varies depending on the kind of construction company you are in. Most construction companies use some form of a revenue tracking system. These systems provide real-time information about their revenue and expenses on a per-job or per-division basis. The revenue tracking software should track all your revenue streams and provide relevant information about the growing trends in your business. This information will help you to understand how you are currently performing and where you can improve.

A good construction process measures the basic principles of productivity by the revenue you make per employee and hour. These stats will help you to choose the right partners for your construction project. Good construction productivity can be improved by following certain guidelines. To increase your revenue, one of the first things you will want to do is increase your potential revenue by scheduling quotes. You can increase revenue by diversifying your revenue streams and increasing the number of customers.

Implementing project management software.

Investing in information technology systems or project management software that will help track your work is a great way to improve your construction productivity. These systems should track your employees’ work and provide you with relevant insights on how you can improve your construction process. Invest in products that will make the process less labor-intensive. These products can include automated construction systems that help make the construction process more efficient.

However, large capital requirements are needed in order to introduce automated construction systems. The company should build this investment into the future goals of the business. It could be too expensive of a venture at this time. Further focusing on productivity and cost controls can generate revenues for capital expenditures in the future.

Automating your construction planning and cost controls.

The construction industry largely focuses on the manual method of work. This emphasis is because of the nature of the work and the expertise required to perform the job. However, the automation of construction planning has become one of the most important trends in recent times. This new trend is because of the rising demand for quality products at a lower cost. Automating construction project planning has been a great way to increase construction productivity while monitoring the cost of construction materials. Reduction in labor costs is a direct result of automating operations.

Construction management technology and project management systems have been a great way to improve construction productivity. The reason is that they help you track the various timelines of work being done in individual projects and the business as a whole. An automated construction management program is a great way to make the construction process more efficient and cost-effective. This concept goes for almost every industry. Invest in metrics that will help you to track your progress. Project tracking allows you to identify the areas where you need to improve and make changes.

Tracking mistakes can improve your construction process.

One of the best ways to improve your construction productivity is to make sure that you do not make any mistakes while performing any work. Tracking mistakes will help you identify the areas where you need to make changes to improve your construction process. At the same time, rework is an eventuality of any job. However, tracking the costs related to rework situations will allow you to improve processes to limit and control.

Attracting new customers to the construction industry.

Many construction companies are trying to attract new customers and build good relationships. They invest a lot of time and money in managing their current and future relationships. To ensure your place in the list of top construction companies, you need to track your performance regularly. You should also report the results of your undertaking to your clients. Reporting any issues will help you to become a transparent partner with your customers and increase your reputation within the construction industry in your area. This approach will help you understand where to make changes to improve your construction process. Also, industry portals can be a great way to get listed among top construction companies. This recognition will help you to expand into different construction trades within the construction industry.

The costs of using information technology.

Construction management software is by far the easiest way to track productivity metrics. They allow for inputting data from the field and tracking hours related to various aspects of productivity. However, due to the nature of software systems, they can have a steep learning curve. Not only for the owner or managers but all the way down to the frontline employee. Along with the addition of project software to assist with productivity, your company might also require additional costs for laptops, tablets, smartphones, etc. These can be cost-prohibitive.

Review your labor statistics.

One of the easiest ways to start tracking productivity is to look at labor statistics. Divide the total number of labor hours used on a project by the total revenue generated by the construction project. This formula will provide you with revenue per labor hour. By tracking the revenue per hour per project, the project manager can see if you are generating enough productivity based on project types. Profitability is not only revenue but is that revenue cost-effective. Furthermore, this might show that certain types of projects are less profitable than previously expected.

Construction management and measuring project metrics.

In conclusion, a construction project is one of the most time-consuming operations, which is why you need construction management. The construction manager finds ways to make the construction processes more efficient and cost-effective. The first thing you will want to do is start tracking the productivity metrics using construction management software. The metrics you can track include revenue per employee, cost per job, revenue per hour, and other labor statistics. It is very important that the metrics that the project manager tracks are real measures of productivity. These measurements help you to understand how you are currently performing and where you can improve costs. This information will also help you to get a better idea about what your competitors are doing and what areas you can improve to gain an advantage in the marketplace.

What is Supply Chain Visibility?

The Supply Chain Management.

Supply chain visibility is essential to running efficient and effective supply chain management. A lack of visibility can lead to inefficiencies, reduced productivity, and penalties for non-compliance. To improve business administration of supply and demand, you must clearly understand where products are and what’s going on with them at any given time. As the name suggests, a supply chain is the network of suppliers, distributors, resellers, manufacturers, and other businesses involved in delivering goods from the point of origin to the final customer. It includes everything from procurement activities to distribution and retail sales.

Looking at Supply Chain Visibility.

This article is for you if you want to strengthen your supply chain management or add another company to your existing network. We will explain what supply chain visibility is, how it affects your business and how you can achieve it. Let’s first look at what supply chain visibility is and what it’s not. Supply chain visibility is the ability to see all of the activities that occur in supply chain operations at any given time. We can track all of the information regarding the products as they move through the supply chain down to the last consumer.

Understanding the Supply Chain.

Before you can understand your supply chain, you need to know the current state and track the movement of items within it. This knowledge gives you vital information to do two things: understand your current position and identify potential problems before they become real issues. You can then work to correct the issue before it becomes larger. Without supply chain operation visibility, you might be working under the assumption that your supply chain is running effectively. Once you understand where you are now and what you should be doing, you can make corrections for greater efficiency. By proper supply chain planning, you can track if any materials are late or products are stretching beyond their expected lifespan. If you see that a product is expected to last 60 days and is going on Day 60, you can take corrective action before it becomes a more significant issue and causes you to miss a deadline or lose revenue.

Business Analytics, Identify Your Supply Chain Process.

Below are different types of supply chain logistics that you can identify your business with: Right-sizing – You can work with suppliers and manufacturers to reduce the time it takes to complete the supply chain with the materials you have in stock and the facilities you have available. With visibility, you can see if any parts are late and determine whether you have a problem so you can take corrective action. Visibility allows inventory management of the current supply chain and viewing the expected supply chain activities by the end of the term. Full-flow – This type of visibility tracks the entire flow of goods from start to finish. It lets you see the whole route the goods take, the condition of those goods, and whether they’ve been tampered with along the way. With full-flow visibility, you can see delayed products, if damages occur, and if other parties are trying to interfere with the supply chain process. You can work with your supplier or manufacturer to remove any interference.

Supply Chain Management, Closing Down Supply Chain Risk.

Good supply chain visibility lets you see what’s happening within your supply chain activities and the expected end state. It allows you to track the movement of goods, the condition of goods, and what is currently occurring along the way. Good supply chain visibility helps with risk management. On the other hand, bad supply chain visibility might not track your goods as they move through the supply chain. It might not track the expected movement of goods or not show the condition of those goods. Poor supply chain management leaves you open to supply chain risk.

Benefits of Supply Chain Visibility.

Supply chain visibility improves the supply chain manager’s ability to manage your resources effectively. It helps find ways to reduce costs, optimize your inventory and ensure that you’re using the right resources. It also allows you to work with your supplier to remove any interference. Supply chain visibility leads to predictable costs, better financial planning, and better project management. Supply chain resilience helps you identify new opportunities and expand your business. It also allows you to identify new markets and new products to sell within those markets. Strong supply chain management helps you achieve your business goals and reach your vision for the future. Visibility allows you to see the big picture and identify key opportunities for growth in a global supply chain demand. It lets you know what your competitors are doing and what you need to do to gain a competitive advantage in the market.

Supply Chain Information Systems.

Supply chain management sees all activities occurring in a supply chain at any point. It includes the movement of goods, their condition, and any interference with those goods along the way. We can break down supply chain visibility into three information systems:

The supply chain itself
The information within the supply chain
The people using the information within the supply chain

Business Decisions Based On Supply Chain Visibility.

Supply chain visibility is more than just a nice to have. It’s essential to the logistics of effective supply chain management. Supply chain visibility lets you see the current state of your supply chain and the expected end state and allows you to remove any interference. Supply chain management helps you keep track of every part of the process, from raw materials to finished products. Detailed tracking helps in operations management and ensures that products get to their customers promptly, so there are no delays or shortages. Supply management makes decisions about your supply chain demand and the supply chain process based on the available information.

Manufacturer Case Study – Business Process Management

Manufacturer Management Consulting

Machine Shop Business Process Management Case Study

This business process management case study is about a manufacturer providing custom metal fabrication and parts assembly located in Indianapolis, IN. Their fabricated solution offerings include laser cutting, forming, stamping, material finishing, welding, engineering, assembly, coatings, and in-house mill and lathe capabilities. Operating since 2007, our client is a family-operated business that offers holistic solutions to project needs rather than having to rely on multiple manufacturing shops to process one part, essentially a one-stop-shop.

Business Status and Initial Challenges

The client is a very personable individual and good at selling but, typical of many owners, not good at managing the business. The daughter manages the office and shipping and while capable has no prior experience in her position. The Production Manager has risen through the ranks starting out as a Fabricator and taking over as Production Manager, replacing his father when he retired but having no other experience in managing anything much less a machine shop.

The business was flat at $2m to $2.5m annually over five-plus years. The client could sell more but Operations would not be able to fulfill those orders. They were faced with a significant backlog and fearful of taking on new business because of not meeting deadlines. The client had a software system that listed all open orders but wasn’t able to project timelines when different stages of when work might be done. For example, a part might need to be cut, then formed before grinding and welding but they were only able to manually move parts from one stage to the next. The only answer was to “plow” through the backlog with a singularity of pursuit and to require extensive (and expensive) over time. They tried “farming” some of the work out to third parties but because the jobs were usually one-off, as opposed to production type runs, the sub-contractors were either not willing to do the work or would price the job at a rate that was exorbitantly high.

A Daily Huddle had been installed but the Production Manager remarked that while his Operators liked the meeting, he did not find it useful. The Operators were a young and amiable group but not a lot of experience. The Production Manager would hand off a list of jobs to be worked from their ERP system that ranged over two months. The result is that the Operators would pick and chose what they wanted to work on. The only prioritization done was due to the Production Manager expediting orders that were behind. This prioritization resulted in interrupting work in the process further slowing down operations and continuing to contribute to the backlog.

Another backlog contributor was due to the Operators of the Lazar equipment leaving the table with parts that had been finished and could have been moved to the next stage of fabrication. There were two machines and while the second Lazar was not able to process all parts, there was no sense of urgency to have these machines up and running all the time. This was a very simple operation in that the machine could be loaded and left alone while it was cutting the sheet metal, then pull the sheet out and insert a new sheet to be cut. Instead, the Operators were quite often “wandering” and letting the machine sit idle or not taking advantage of the second Lazar where both could be run at the same time.

To compound the backlog issues, especially as related to the Lazar machines, they required programming which was often not being done until the sheet metal was ready to be cut and the machine would wait until the Production Manager could find the time to do the programming. This could mean hours the machine would sit idle waiting for programming.

To summarize, there were a “comedy of errors” that were contributing to the high levels of backlog. Overall, the Business Process Management (BPM) or Management Operating System (MOS) was incomplete with any elements that did exist were not being effectively used. Examples of the weakness of their business process management included poor planning, relying on software they did not know how to use, inadequate distribution of work, lack of discipline in equipment management, and failure to keep the processes flowing. They wanted to do the work but just did not know how to manage the work processes. Put another way, of the 100% capacity they had operationally, they only had sales to utilize 70% of that capacity but due to inefficiencies they were only able to produce 50% of those sales as shown in the schematic.

Business Process Management Solutions

Scheduling –

Given that they did not know how to use their ERP software, I built a spreadsheet from the listed jobs. Those jobs had standards, of questionable accuracy, but were good enough to work with and I backed off that standard by 20% to allow for buffer. I then took the list of work and broke out those jobs that were due the soonest by workstation and filled up an eight-hour day over two shifts where it applied to the Lazar equipment. I did this by week until all the jobs were consumed, about four weeks.

Business Process Management - Scheduling

Unfortunately, because the ERP output was so inaccurate it was not capturing all the backlog and was including the jobs that had already shipped with no one knowing how to clean out the system. We ultimately learned that further training would cost thousands of dollars and, eventually, the provider admitted that the system did not have the functionality required. Instead, the Production Manager would do a weekly “cleansing” of the list, create a four-five week lookahead, produce a weekly plan by day by station took around two hours which is reasonable in that this is a core activity for a Production Manager.

Daily Huddle –

I then had the Production Manager, in the Daily Huddle, release the parts to each operator based on a day’s worth of work, only, listed in the order in which the work was to be completed. This eliminated the picking and choosing of work that the operators had done in the past.

The Production Manager posted this above his desk and used it as a daily guide. As a consequence, we agreed that Programming would be adhered to during the allocated times and that we would stay three days ahead so that the Lazar machines would never be down due to programming not being done.

Daily Production (DPM) and Weekly Review (WRM) Meetings –

Both meetings were designed with a focus on planning and scheduling. During the DPM, the Production Manager met with the Office Shipping Manager, who also managed materials, and they discussed the daily plan, what needed to be shipped, and ensured that materials had been ordered and were arriving timely adjusting the daily schedule as needed. The WRM included the Office Shipping Manager, the Engineer, and the top client with a focus on reviewing the plan for next week and ensuring that it could be appropriately executed, and adjustments were made as needed. In addition, during the WRM they were able to address long-term solutions such as developing strategies to reduce/eliminate rework.

Business Leadership Consulting - Production Manager Agenda

Follow-up audits of these meetings show that they continue to be not only held and effective, but vital tools in driving their business.

Manufacturer Management Consulting Summary

In the beginning there were no metrics. The client did not know how to obtain KPI‘s from their ERP system, which would probably not have been very meaningful considering that data in the system was of limited quality, and the client did not track metrics manually. With only a few weeks to work with, I chose to identify and implement the MOS tools that would allow them to improve their productivity.

With strict adherence to the new scheduling tool and business process management and management operating system elements that had been implemented, the backlog was eliminated and they were able to maintain that zero balance. They now look at open orders and are running at approximately $400k in open orders at any given time, which is their sweet spot, currently. They had been running at $2.5m to $2.0m annually over the last five years or so but were now able to ramp up production by getting that backlog shipped out and were tracking to do $3.5m. The goal was to ship $58,000 per week and they were hitting weeks where they shipped $60,000 to $70,000 per week and were achieving highs that they had not done before. The most gratifying aspect of all of these improvements and results is that everyone agreed, from the Management Team to the Operators, that it didn’t “feel” that they had worked that hard.

Essentially, they were working smarter not harder. No longer were they trying to “bully” parts and jobs through the production process but driving the process through their BPM and MOS. In the last WRM I attended, I turned to the top client and told him he had to now go out and sell more to realize this excess capacity. The last time I checked they were on track to do $5m in this year!

Why Its Important To Maintain A Healthy Backlog

As businesses grow, we often experience times of plenty and times of drought. The balancing of these ‘feast or famine’ cycles is important to growing your business while steadily increasing profitability and business value. Early on in a company’s startup phase, sales can be slow in coming, and come in bursts and corresponding dry spells. This is part of early-stage business that every business goes through. We do our best to anticipate company growth, but reality often throws us curves. Either it takes too long to get enough sales to be profitable, or we are swamped with orders we cannot fullfil. Neither of these is what we set out planning for. As a more mature business, these cycles have a less dramatic effect, but must be anticipated and planned for. Cycles in business and nature are a given. So, what can a business owner do when these cycles occur?

Any good business plan starts with estimating anticipated sales through forecasting. Forecasting is an art form, and yet all forecasts are wrong. Good forecasting methodology can predict business seasonality, continued growth at historical levels, and potential sales. They do help us plan based on what we have seen in the past, or what we expect to continue in the future. But what happens when things don’t continue as before? What happens if we have a world-wide event that shuts down the global economy? What happens if a hurricane, tornado, flood, drought, or alien invasion hits our region? The last couple of years have alerted us to the potential impacts of such enduring and global events.

Backlog is defined as the work we have sold but have not executed.

This could be due to constraints on capacity or resources. It could be because of scheduled delivery to a larger project. It could be that your supply chain is not able to fulfill your raw material or parts needs. Whatever the reason, this backlog should be managed with intentionality. A lack of a healthy backlog can cause starts and stops in your operations that can cost you money. Large parts or raw material inventories are a drain on your capital. During a drought, you may have idle resources that are not easily or quickly ‘scalable.’ In these current times, employee retention and hiring are serious issues having to be addressed with new and creative methods. Optimum operational efficiency is obtained through managing ‘flow’ through the operations by equalizing capacities, minimizing material travel, eliminating waste and maximizing both human and capital equipment utilization. These optimum flows are built by a solid forecast and involve investing in capital equipment and human resources. These processes are not operating at optimum output when they are slowed down or stopped. This is also true of the opposite extreme where your resources are being stretched to the limit to meet demand. If this is ‘temporary’ and does not turn into the ‘norm,’ this works for a time.

Having too large of a backlog can indicate a lack of capacity to meet demand. This increase in demand could be a result of the natural ‘cycles’ that all industries face. If it has been adequately planned, the ebbs and flows can be balanced out. Production and Operations can then deliver on a more consistent schedule with predictable efficiency. As demand continues to increase over time, additional capacity for fulfillment must be considered. This is not usually something that can happen overnight. It requires strategic decisions and capital investment.

So, how does a savvy business owner deal with these cycles and maintain a healthy backlog?

First, ‘healthy’ needs to be determined for each business. For some businesses that have months or years of backlog due to construction schedules, this could be considered ‘healthy.’ It would not be considered healthy if you have months or years of product that you need to produce and might lose customers to alternatives if you can’t deliver within customer expectations. Each business needs to determine what their ‘healthy’ backlog should look like. The ideal ‘healthy’ backlog should balance out the cyclical or growing demand with more metered operations and growth. This means that a business model that either expands or contracts with demand or seeks to consistently meet the demand within customer expectations.

The symptoms of not having a healthy backlog can be recognized and addressed. One of the most obvious symptoms is human resources that are idle, or not producing at capacity due to lack of backlog. This can be seen in Operations and Production KPIs. This can also be seen in constant ‘stops’ and ‘starts’ in your operations. The other end of this spectrum is having too much overtime, that can cause burnout in your resources, and a feeling like they will never ‘catch up.’ Most employees appreciate knowing they are accomplishing their mission, producing the expected results and not feeling overburdened for extended periods of time.

Another symptom to look for is orders being canceled due to a lack of delivery based on customer expectations. This is an indication that customers are not willing to wait on your product or service and have either gone to a competitor or resolved the need themselves. This can be due to a cyclical surge in demand, or possibly a growth surge that is clearly a trend. Knowing the difference in these two circumstances helps you decide which approach to take.

Temporary demand spikes can be fixed with a season of ‘overtime’ and potentially sub-contracting to catch up with overall demand. If this goes on longer than a couple of months, it may be time to consider other options to meet the demand. This may require hiring additional staff or investing in additional capacity. This later approach should be reserved for ongoing demand growth and not just to meet temporary or seasonal surges in demand. A company that regularly has these seasonal or temporary surges should consider seasonal or part time labor to overcome the temporary demand. By hiring too quickly, you could have increased payroll costs after the demand surge is satisfied, resulting in decreased gross profit. But you must be careful not to send a message to current and potential employees that you are not committed to long term employment.

Backlog is good for any business. However, too much or too little backlog could indicate issues that need to be addressed. The amount of backlog is not as important of the cause of the backlog. As mentioned previously, sometimes backlog is part of the cycle. You need to discern if the backlog is caused by a temporary cyclical condition or a growth trend that will continue to require additional capacity. So, given some tools to determine the backlog and its origin, business owners can plan and adapt to these needs with the appropriate approach.

How To Increase Revenues Through Market Segmentation

Sales revenue is the fuel for your business.

Developing a product or service that provides value that customers will pay for is what businesses strive for. The revenue from these sales is what allows the business to generate profit, value and ultimately freedom for business owners. As businesses grow, they often sell products and services into various markets in multiple ways. Sometimes these sales are to groups of customers who were maybe not the original target market, however, they are growing to be a significant contribution to overall sales. We all want to increase our sales, but sometimes are not sure how to go about it. What can we focus on that will increase sales the most? What marketing strategies should we employ to grow the markets we serve? Which of the markets we serve has the most potential for growth with the least amount of cost?

In order to answer these questions, a business needs to understand its markets, where the revenue currently comes from, and where the growth opportunities are ripe for harvest. The structured evaluation of our revenues and market is known as ‘Market Segmentation Analysis.’ This involves understanding our markets, breaking them down into various segments, evaluating their historical performance and looking for opportunities to grow each one. Each market segment has unique characteristics that once known, help the business make informed decisions on where and how to invest in market growth. A marketing program for one segment may not be appropriate for another. Each market segment needs to be evaluated to determine the best approach to growth. In some cases, you may find that a particular market segment is not worth investing in and might even be losing money that could be better invested in other more promising markets.

There are as many ways to look at your market with marketing professionals.

Market segmentation is an art-form. Some typical marketing segment breakdowns include geographic, demographic, behavioral, psychological, distribution channel, etc.

Depending on your business and how you go to market, different marketing segment breakouts provide insight into your focus, investment, and even compensation or discounts. These concepts work for both business to consumer as well as business to business sales. Some companies may have both, which would likely require different approaches.

Geographic market segments can also referred to as ‘territories or regions.

These could be within the United States or globally. An example of a market segmentation for US sales might be Northeast, Southeast, Central, South, Midwest, Northwest, and Southwest. Some successful companies assign these territories or regions to individuals responsible for obtaining sales in their respective areas. Each area may have its own unique set of characteristics, pricing and buying habits.

Demographic market segments are typically made up of groups of buyers that have common characteristics.

For instance, age groups, gender, disposable income, capacity for trying new things, business or consumer, size of business, etc. In this area, it pays to be creative in understanding who your customers are, why they should be buying from you, and how you can best address their needs. If you have not previously looked at your buyers in these ways, do some ‘sampling’ by talking with your customers, creating surveys or mining product registrations that allow you to begin to collect this data.

The way you interface with your customers requires different approaches.

A retail store, for instance, may focus on some things for those who walk into their storefront to purchase or research. An on-line buyer may need other tools to facilitate their buying decisions. If you sell to resellers, wholesalers, or other businesses, you need to understand their needs, and decision processes. This type of segmentation is often called ‘Channel’ or distribution segments. Channels are the different ways the end user of a product or service becomes aware, researches and purchases the product or service. Examples of distribution channels are storefronts, on-line, distributors and wholesalers, direct sales, and perhaps even phone solicitation.

Many retail chains purchase their store inventory from wholesalers, who purchase from other distributors or wholesalers or directly from the manufacturers of the products. These ‘buyers’ have different requirements and needs that will assist you in marketing to them if you understand these things. A single company may sell its products directly to end users through phone, email and web-store, sell to ‘resellers’ who buy the products at a discount, and ‘resell’ them to specific groups, and distributors who serve various markets. Some of these distributors may have exclusive geographic or territorial boundaries. All of these can exist simultaneously, but each one requires a different set of messaging and service to grow your sales and understand the significance of each to your marketing approach, revenues, and profitability.

Another means of market segmentation is behavioral or psychological characteristics. Again, this is an area for you to be creative in defining these groups of customers or segments. One very common segmentation for companies developing ‘new’ products is the customer’s propensity for trying new things before they are commonly understood or fully developed. This segmentation might be broken into innovators, early adopters, early majority, late majority, and late adopters. Examples of these groups can be seen in the adoption of new or breakthrough technologies like electricity, telephones, automobiles, facsimile machines, personal computers, hand-held devices, cell phones, navigation devices, smart phones, apple or android watches, electric vehicles, and . . . Understanding these market segments and their unique behaviors and psyche can significantly aid your company in adapting and marketing to these unique groups and growing your sales over time.

Market studies by professional market research firms provide insight into your industry’s market segments.

While these market research reports can be pricy, the right ones at the right time may be worth it to propel your sales to the next level. Subscribe to your industry’s market research newsletters. While they continually send market research synopsis information in order to interest you in actually purchasing the entire market research study, they often revel important mega-trends within your particular industry. Staying in-tune with your industry’s trends, disruptions and new directions helps you manage your marketing and product development strategy and investment.

Once you have defined and organized your data within your markets various segments, you can begin to analyze them and mine the information to assist you in understanding and growing each one. This analysis is more than just percentage of revenues generated by each group, although that is a good start. It can also delve into the varying costs of marketing, distribution etc. This can allow you to evaluate growth potential and profitability by segment to help guide investment decisions in additional marketing or product changes to serve a particular segment. Understanding the ‘why’ and ‘how’ your customers purchase your product or service will help you refine your offering and improve its’ ultimate value to your customers.

A market segmentation analysis is one step towards growing your business.

In the early stages of a start-up, small business will sell to anyone who will buy, but don’t fully understand the ‘why’ or ‘how’ they make their decisions. As a company grows beyond its start-up phase and matures into a growing enterprise, this analysis can provide insight to help a business align its sales revenues, product mix, marketing messaging, and much more. This allows you to better understand your markets and make decisions based on the information gleaned from market segmentation analysis.

Maximizing Your Supply Chain Advantage

Every business relies on other businesses to provide materials, products, and services to accomplish your mission. These relationships are collectively referred to as your supply chain. They supply necessary materials, products, and services to your business. The ‘chain’ portion of the description references that one supplier might also be a customer of other suppliers that allow each to offer value-added products and services to you as you provide value to your customers, thus the supply chain.

In most businesses, your supplier relationships can determine your costs, competitive advantage, and partnerships in delivering your value-added. Managing these relationships is critical to ensuring steady flow of supplies to feed your operations, adequate quality, and economic costs for your business. If these relationships are so critical, how do you maximize the value of your supply chain?

One of the most used criteria for supplies is cost. While cost can be a significant determination of value, there are many other components that should be considered when choosing supplier relationships. You may be able to purchase something ‘cheaper than an alternative supplier, but the delivery lead time or quality is not predictable, thus causing uncertainty in fulfilling operational demand. Sometimes the cheapest supplier does not provide services, information, and support those other suppliers that might. This needs to be considered as a part of any supply chain decision. What value are you getting for the cost? Are they offering a single product or service, or do they provide multiple services your company requires? Each supplier relationship has a cost associated with it. The setup costs, the relationship maintenance costs, and others contribute to the overall cost of supplies. The more suppliers you have, the higher the cost of managing these suppliers.

This is the reason there are ‘wholesalers’ and ‘distributors’ who consolidate a plethora of products around an area of supply to be able to offer more of what your business needs, with the cost of only one relationship. These middlemen, as they are referred to from time to time, add value to the supply chain by carrying a product mix from multiple suppliers to offer a business the best ‘value’ for their supply needs. Sometimes this is by offering multiple options for a particular product. These wholesalers also offer related products, thus keeping your relationship count low. Other times it allows them to buy in larger quantities, thus passing on some of the savings to their customers. Some wholesalers and distributors offer customer service that helps you determine the best options, or assists with the design, or even provides technical product training. While these extra benefits are often overlooked, they can be valuable to your business supply chain by helping you deliver your product or service with greater value and efficiency. Some raw material suppliers often offer ‘customization’ services that might include warehousing, delivery, ‘cut to length,’ kitting, or other services that can help control your overall operations cost by performing pre-operations steps cheaper than you can in house.

Another critical supply chain criteria is the ability of the supplier to consistently deliver the right product, with acceptable quality, on schedule to fuel your operations.

Companies that require a predictable supply chain should consider the cost of delays if materials, product or service is not delivered in a timely manner. Delays in supply can starve your operations, causing resources to be idle and costing you in terms of ‘wait.’ Because your operations are often a flow of material and products through a process when the early steps experience a shortage, this has a ripple effect on the downstream operations which multiplies these costs. Material drives schedule, and labor drives cost. Poor or inconsistent quality can also have the same impact in terms of ‘waste.’ If you must sort, reject or rework supplied material or product, this costs the business by having to perform these operations. Having to ‘stock up’ or inventory supplies is one solution, but this ties up capital and has a cost of warehousing the extra supplies.

What is your businesses’ core competency? What do you offer as a ‘competitive advantage’ over competitive business?

How can your supplier relationships add or detract from this market advantage? Some suppliers often sell into multiple levels of the market and might offer their product directly to your customers or competitors. How can this affect your market advantage? Does your supplier offer discounted pricing based on building your relationship? Does the supplier offer the same product or service directly to your customers? Do they protect your relationship by having an exclusivity or geographic territory policy that allows your business to maintain a competitive advantage?

If your business purchases anything that is not considered a ‘commodity,’ then perhaps supplier ‘partnerships’ might make sense for these items. If a particular material or component is key to your success as a business, how can you partner with your upstream suppliers to ensure you get the best value and maintain a competitive advantage? These partnerships should be entered into openly, with clear benefit to both parties. A potential benefit might include a ‘voice of the customer’ to the supplier, perhaps on the characteristics of the material, product or service needs to be. A business that purchases a product or service and adds value might be able to offer access to customers that the supplier does not have relationships or marketing targeted towards, thus increasing overall supply volume. As mentioned above, sometimes manufacturers, wholesalers, or distributors offer co-marketing support or co-branding opportunities. These services can help your business sell more products or service through leveraging industry experience and brand awareness.

How to Adapt Operations and Scale Your Business

Every business owner dreams of his company growing from the very beginning. This dream often includes providing more income, more jobs, more products on a large scale. The challenge is, however, how do you get from the prototyping and start-up phase to this stage? Often it is not one big order or big change in the market, but a steady growth of the business. How do you manage this growth without breaking what works about the business?

Many business owners start with great people who have been selected for their shared interest and vision for what the business can be. These initial employees use their expertise and experience to create the product and the methods and processes needed to provide it in the initial stages. This process often allows the company to produce the new product with handmade skill and quality. This method can sometimes be taught to others to increase the output of the company to feed initial sales.

But what happens when these volumes exceed the capacity of the current resources to keep up? One of the things that allow a start-up business to adapt and meet the market needs is their agility and flexibility in producing the product. As the demand grows, sometimes doubling or tripling in a short time, the methods and processes that were used initially can’t keep up. How does a business owner prepare and overcome this welcome challenge without sacrificing product quality and yet meet these new volume requirements?

The first thought is always, hire more people to do what they are doing to increase volume. However, this method of growth falls short of multiplying the production capacity and can continue to rely on finding top talent to be able to produce product in this environment. This presents a two-fold problem. First, finding these individuals and duplicating a process dependent on high skill levels is difficult to do. Second, even if you can add this talent to your workforce, what do you do when it grows again? The cost of scaling the workforce with highly skilled talent outweighs the benefit of increasing capacity in most cases.

The best way to scale your capacity is first to understand the steps needed to produce the product.

This is often done through ‘process mapping,’ a technique to list out the detailed steps and document the processes used in producing the product. This allows a highly skilled individual to identify what is done to produce the product and communicate it to others who may be less skilled in developing the process but perfectly capable of executing a well-documented process. This step can also identify areas of unnecessary effort and aid it improving or making a process more efficient. These efficiency and productivity gains can be the solution to increasing volume without having to double or triple the workforce needed to grow the business.

As a part of mapping the system processes and identifying each resource’s capacity, production output or throughput can be measured at certain process inputs and outputs.

These measurements are used to ‘baseline’ the outputs of the various stages. Once these measures are established, they can be used to report improvements in efficiency and thus throughput. When measures are expressed as a ratio of output per unit of measures, such as units per hour or something similar, they become performance indicators.

Once the process is mapped, measured, and documented, the key contributors to production throughput can be identified.

These ‘Key Performance Indicators are the most significant measures of performance and can be a great means of communicating success to the team and to establish improvement goals and targets.

Another means of increasing volumes is setting up parallel production elements to improve capacity and throughput. Often there are one or more processes that take the most time or resources that pace the rest of the operations. Understanding and identifying the process steps above is the first step in increasing your operational output. The next step is to identify the capacity of each operation and determine where the bottlenecks might be. These bottlenecks, or operations with the least output per period, drive the ‘Flow’ of your production operations. Sometimes finding ways to increase the capacity of these flow limiting functions can be a multiplier for production throughput. Are there ways to improve the efficiency of these flow-limiting operations?

Can parallel operational elements be put in place to increase the production throughput? Once the overall production flow or capacity is known, the overall process steps can be optimized to meet increased production demand.

Once the production process has been documented, process step throughput is defined, and KPIs put in place, it is time to evaluate the documentation available to build the product.

Is the documentation complete?

Are all details included in drawings, process steps, and quality requirements? When increasing the pace and volume of operations, it is well worth the time and resource investment to ensure that the supporting documentation will produce a consistent result over a broader range of skill levels. Initial production processes sometimes leave out what the experts might consider ‘common sense’ items that are not clearly understood by the expanded resource pool. These simple, step-by-step descriptions of the production process are key to achieving scale and increasing output. By including detailed step-by-step instructions, production output and quality are more consistent and predictable.

Part of the equation for increasing production volumes in training human resources in the established processes and equipment needed to produce the output. This can be general skills training as well as specific training in the company’s process flow, documentation, and measurements. This step can also train multiple resources on different process steps to provide flexibility of production resources, and production needs change. This also includes backup for much-needed vacations and time off for production resources. One of the most valuable resources in increasing production output is the people performing the operations. This is typically the best source of process improvement recommendations. Having a documented process map, key performance measures in place recommended improvements can be tested to see if they truly improve the output while maintaining the required quality. By implementing these incremental changes into the production process, the full impacts of changes can be measured, and new processes and methods can be implemented with predictable results.

This measured implementation of improvements is collectively known as ‘continuous improvement’ and can lead to better production output and competitive advantage.

Regardless of where you are increasing your production throughput and output, these steps can be applied. Process maps are intended to be updated as new steps are refined or unnecessary steps are removed. Key Performance Measures are tools for communicating production process performance and quickly identifying areas of the issue when these KPIs indicate a decrease in production output or quality. Thorough documentation of design details and process steps can continue to evolve as improvements are made. All of these are essential to growing and training the human resources necessary to grow your business volumes, throughput, and output.

What Is Supply Chain Risk?

What do you know about critical supplies and the path travelled to your door?

Discussions of risk have been at the front of our national and international dialog for over a year now. The Covid 19 pandemic has brought the idea of risk of death and illness into our daily thoughts. If I go out to a public place, what is my risk of catching the virus? If I get the virus, what is my risk of hospitalization? If hospitalized, ….

Supply chain risks have always been present, and the sources are varied. Lately, it appears we are adding new risk “opportunities” as each month passes. We will discuss a few of these and ways to understand and react to conditions as they change. We can never eliminate risks, but with a reasoned approach and common understanding, we can minimize damage done to any disruptions. Let us look at a few significant and unique events of the past ten years:

Japan March 11, 2011

An historic earthquake caused a Tsunami that very quickly devastated parts of the east coast of Japan. The wall of water ran up to 6 miles inland and reached land over 125 feet above sea level. Walls built to shelter the coast were overrun and destroyed. The initial quake lasted nearly 6 minutes – hundreds of aftershocks followed. Sections of the northeast coast of Japan’s main island dropped by two feet. The island of Honshu shifted east by 8 feet. The length of a day shortened by a microsecond as the quake changed the rotation of the earth. In less than 24 hours, the tsunami reached south America and Antarctica.

This quake and resulting tsunami left thousands dead and many more homeless. Many businesses and homes in the path were crushed as the water moved rapidly inland. When the ocean retreated from its inland progress, all the people and buildings were carried out to open ocean and lost. One of these companies made the only approved chemical component that was required for every paint maker producing body paint for a large international Automaker. Within minutes, the entire global supply chain of approved paint was disrupted. This was just one small incident of many thousands.

The risk assessment when they built the retaining walls to protect against the tsunami was that the height was more than adequate for any conceivable earthquake. March 11, 2011 was an earthquake and resultant wave beyond any worst-case scenario comprehended.

Economic “Bubble”

Economies can change rapidly. The automotive industry was relatively stable for years prior to 2008. As economic panic set in, companies’ shutdown production as their customers called to stop all purchase order activities until further notice. The lights went out in most every tunnel. Massive drops in customer and dealer orders occurred as the economy appeared to be in a free fall state with no clear bottom in sight. The results to the supply chain were felt immediately. A prominent supplier of machined parts decided to sell off time on machining centers at deep discounts. Equipment was repurposed to serve the new business at very low or no margin. As the automotive business improved and started a significant recovery and expansion, this company ran out of capacity. Due to the nature of the work, the lead-time to obtain, set up and run effectively was estimated to be no less than 28 months. This one plant served all major manufacturers operating in North America and did not have the machine capacity to supply all automotive demand. Automotive OEMs were put on allocation and rushed Supply Management teams to the supplier to communicate supply conditions on an hourly basis. Vehicle production was slowed and, in some cases, stopped. It took only a few weeks to reduce or divert capacity. It took nearly two years to build it back.

Global Health Crisis

The global pandemic of 2020 has rearranged or eliminated demand in many industries. World political leaders are pouring cash into economies to offset unemployment. Some companies have closed while others found new markets or ways of getting product to the end user. Demand and supply have been far less predictable than in prior years. Some companies have changed their business model completely and do not serve the same customer needs as they did over a year ago. Some organizations are simply gone. Labor shortages due to restrictions, quarantines, and illness have crippled some businesses even though materials and equipment are in good shape. Many hoarded basic supplies (toilet paper concerns anyone?) Supply is beginning to return to pre-Covid conditions but will never be the same in all respects.

Accident (Operator error?)

Just recently the large cargo ship Evergreen ran aground blocked the Suez Canal. Containers, as of this writing, are still not moving even though the ship is freed from its grounded condition. 20,000 shipping containers have been stuck for weeks and there is no anticipated date when they will be able to move. Many more ships were anchored waiting for the canal to reopen. There are container ship tracking websites to see the position of any ship carrying your containers – are you using those to confirm arrival dates?

Your Business

Was your business disrupted by any of these events? What do you know about your suppliers’ sources of their raw material, information, or service? What about their sources? The destruction of a small (10,000 square foot) company making the paint component affected hundreds of manufacturers around the world in addition to potentially affecting every dealership and body/paint shop globally.

Most every business understands its direct (tier one) supply situation. Many have some knowledge of the basic components or materials going into your supplied product. Very few organizations have data on the many tiered layers of supply source and where they are located.

Do you have supplier data that clearly lets your team to find true capacity, quality performance, location, financial condition, future business projections, and an understanding of their supply risks? Do you know your suppliers’ suppliers (tier 2) or theirs (tier 3), etc. To the automotive manufacturer in the example above, the component supplier was a tier 4 or 5 supplier. As they developed and approved the source, key team members in the OEM were aware of the company and its importance in the supply chain. Most of the intermediate users of this material were not aware of the risk of this single sourced situation.

Potential areas of supply risk:

Supplier financial failure or difficulty
Political – import tariffs, blockades, war
Currency – exchange rate fluctuation
Environmental – restrictions on chemicals and hazardous materials
Natural disasters – hurricane, earthquake, flood
Labor disputes
Labor shortages
Capacity constraints – competing demand, temporary or longer-term reductions in capacity
Transportation – The container ship Evergreen is one, equipment and driver/operator shortages, strikes
Raw material shortages
Climate – potential for more extreme weather conditions
Single sourcing
Please add any industry specific risks as you are able to identify them….

Evaluating and Mitigating the Risks:

Analyze your supply chain. Gather as much data as to the location, size, condition of as many tiers of the chain (including customers) as possible. Understand real capacity of your suppliers – not the quoted or stated capacity. Visit key supply sources and take actual measurements. Keep this information up to date.

Evaluate each element for risk and assign a numeric value (weighted for risk type, probability of occurrence and effect if occurred). Utilize a FMEA format for ratings to keep things objective and data driven. Add a factor for “sense” – there is often value in stating something that can be intangible. That “can’t quite put my finger on it or express it exactly”, but nevertheless gives you concern. Don’t discount the value of a “hunch”. A risk calculation matrix could look like this:

For the Risk Calculation section, use 1 as low probability of potential to occur (a), severity if occurred (b), and ability to detect ( c ). Beginning with the highest rated items, make a specific plan to reduce the risk. In the “Risks” section, you can indicate with a check mark or elaborate with descriptions of the specific nature of that section. Supplier location data can be used to quickly sort for any tiered supplier location in the event of an event in a specific geographical location. Indicate the tier relationship to your business with the tier 2, 3, and on under your direct supplier so that you maintain the relationship to the direct supply source.

This could be adding sources, requesting changes in production location or methods. Evaluating alternative materials. Establishing better and faster communication regarding incidents and conditions. Changes in inventory policy – this can be short term to “weather” a short-term situation or long term to address systemic risk. Whatever it is, communicate this throughout your organization. When an issue arises anywhere in the world, you will be better equipped to identify any potential problems as early as possible and have a greater chance of avoiding problems. Take action based on your measure of risk. Execute the plan. Reevaluate the risk after implementation. Plan Do Check Act (repeat). Establish set goals to reduce the overall risk rankings (how much, by when, who is responsible). Communicate this throughout your organization.

Time Management in Small Business

Managing your time is relevant to everyone, from kids in school to people at home or work. The issue of time management becomes even more paramount to owners of small businesses. We have all either experienced or witnessed people who struggle with time management in small business. The tell-tale signs are individuals who seem to be constantly fighting fires, who when they get to the end of the day do not feel they accomplished anything, and who cannot seem to get to their desired personal or business goals.

Time management in small business certainly brings a degree of frustration to many business owners, but on the positive side, when time management improves and becomes a productive habit or normal working state of anyone, real goal realization is possible. It is all about learning and implementing those time management tools rigorously. Many business owners become comfortable with poor time management aspects. A day full of unanticipated events can easily attract people; that is where there is never a dull moment and putting out fires is the norm rather than the exception. Yet when business owners analyze their business, the inability of the business’s realization of future goals typically comes back to their lack of effective time management.

Stephen Covey, First Things First Diagram — Figure 1. Stephen Covey “First Things First”

Now that we know why time management is so relevant in today’s small businesses, let us explain what and how to improve time management for business owners and the key players within this workplace. First, it is essential to know what to label the various business owners’ activities, either planned or unplanned, that happen each day. Specifically, the activity fits into the matrix below (Figure 1). Analyzing an individual’s daily activities or tasks as it corresponds to urgent/important matrix provides the transparency needed to understand how many activities, and the time associated with these activities, are happening in a typical day. With this time management awareness discovered, a clear picture of needed changes is revealed. It is worth noting that this matrix’s goal is to move away from unimportant activities and move toward less urgent activities (as best as possible given the business) in the long term.

Shown below in Figure 2 is a good example of typical activities or tasks that would fall into the various quadrants.

Stephen Covey, First Things First — Figure 2. Stephen Covey “First Things First”

Once there is a fundamental understanding of where your activities fall into the matrix, the next step is to begin the change process of time management through the four D’s. The four D’s corresponds with the four action areas to make efforts to move and purposefully fill the quadrants in a controlled manner over time. The business owner’s four choices or action areas are either DO, DEFER (Plan from Figure 1), DELEGATE, or DROP (Eliminate from Figure 1). The best method to move forward with applying the four D’s is to have clear and articulated business/personal goals. These goals will be the litmus test for determining which D to choose for any given activity, either planned or unplanned. For example, as an owner, if managing accounts payables takes a day out of your week when sales follow-ups would be a better use of time to move the business closer to the goals developed, then this task needs to be delegated.

What prevails from this introspection on daily activities is choices that move the business closer to the desired goals, not further away from said goals, as is when letting activities choose you. Creating a sustained habit with these time management techniques enables business owners to take control and realize their business’s goals immediately.

Time Management | Utilizing Your Time Wisely

Very often, we hear clients, and peers, say “There isn’t enough time in the day to get everything done.” Yup! You are right; often, there is more to do in a day than there is time in a day. However, it all comes down to your daily approach to addressing the proper activities and actions to have the most productive day while positively impacting your business. Unfortunately, many individuals do not take the time to plan out their day or time carefully. After reading this, you will have additional soft skills to properly equip yourself with the proper tools and techniques to manage your time better instead of letting time manage you. So, let us look at what time management is, why it is essential to manage time, and specific techniques in helping with your day-to-day planning.

What is Time Management, and Why is it Important?

Oxford dictionary defines Time Management as “the ability to use one’s time effectively, especially at work.” Nevertheless, we can take a deeper dive into what time management means for you and its impact on oneself. The benefits of managing your time correctly are gaining productivity, improve your reputation, increase opportunities for personal and organizational improvements, and most importantly, less stress in your life and the ones around you.

Not effectively managing your time has the opposite effect. A high likelihood that one that does not effectively manage their time fails to meet deadlines, low quality of work, stalled company productivity or profitability, and a higher stress level than desired. So, what can be done about it?

Techniques in Helping Your Daily Activities and Actions

Let us discuss a few simple techniques; however, before we get into two simple methods, let’s review how to prioritize those tasks effectively.

Managing one’s time helps set priorities based on urgency and importance.

The difference between urgency and importance is critical to understand and know. Urgent tasks are highly time sensitives tasks that demand immediate attention. Important tasks are not time-sensitive but provide long-term value; however, important tasks may become urgent if not addressed. When looking at daily activities, or tasks, one should have the ability to determine what needs to get done today and what can be postponed for a later date based on urgency and importance. Then, rank those activities based on importance and impact on the business, or based on a pareto or barrier identified impacting the business or operation in a negative way.

Let look at the first method of prioritizing your tasks and activities.

Write out all of your daily activities and tasks, such as a “to-do” list.
Then, using the chart below, place those tasks in the appropriate quartile.
Address the top left quartile first because they are activities that are highly urgent and important.
Next, work on the highly urgent and low important tasks
Lastly, if time allows, work on the low urgent and high important tasks.
The remaining tasks DO NOT DO because they are of low importance and can be planned for on another day.

This is one of the simplest methods in time management practices, which will allow you to remain focused on the critical tasks and activities for the day, or week; however, you decide to plan out your work out.

Another method of managing your time is as follows:

Write out all of your daily activities and tasks, such as a “to-do” list.
Reviewing the list, determine its impact and difficulty in addressing your activities.
Each task should have a number or letter associated with it.
Place the letter associated with each activity and start addressing the high impact but easy to complete activities and so on.
Then start working on the activities based on the example listed below:

Activities C & E should be completed first. Then activity D, then F, then A, and lastly, if no other activities arise, B.
However, recognize that activity B, or activities within the Low Impact and Hard Difficulty to address, may not be worth the $ spend addressing the issue.

As C. Ray Johnson stated, “Prioritizing is the answer to time management problems…You do not need to do work faster or to eliminate gaps in productivity to make better use of your time. You need to spend more time on the right things…”

Doing the right thing at the right time with the right resources, remember that as you plan out your day and the way you prioritize your time. Always have a plan. Understand what you need and want to get done. Make sure that your plan aligns with your organizational goals and have the ability to say you had a good or bad day/week based on what was planned out and accomplished. Remember that you must allow time for the unexpected because unscheduled “emergencies” do arise.

When focusing on your daily activities and tasks, do not allow yourself to over-commit and find ways to tactfully say no to a request. Do not assume that every request is an emergency; therefore, understand the task’s timeline and importance.

In closing, always create a daily plan and use your outlook/email calendar to stay organized. Limit interruptions and time wasters. Target due dates to be early to minimize activities becoming urgent within your business. By limiting interruptions, you are allowing yourself to stay focused on the important tasks at hand. When creating your plan, also try to batch similar tasks and leave appropriate time buffers between tasks.

Is Digital Transformation Necessary for Your Business?

The short answer to this question is yes. Digital transformation is not only necessary; it’s inevitable. As Henrique Dos Santos (past Senior Project Director for Cogent Analytics) writes, the topmost steps to increasing productivity are: developing a good working environment, using new tech to your business’s advantage, and making sure not to waste the time at hand. And with all of these steps and more, digital transformation can pave the way to a brighter future.

The Digital Workplace Training Room

One of the keys to a good working environment is proper training. And today, this is much easier to accomplish thanks to the emergence of digital training tools accessible to anyone with an Internet connection. ERP software giant SAP for instance has a suite of learning management systems (LMS) that’s dedicated to employee training. One of these systems is called SAP Litmos, an intuitive, user-friendly, and standalone training system designed to be rolled out quickly and efficiently.

This means that it’s easy for even managers without technical software skills to craft and license their own specific materials and online training modules on SAP Litmos LMS. Whether the topic is sales, engineering, distribution, customer service, or whatever type of course you want to teach remotely, this LMS can do it. Furthermore, SAP Litmos’ custom interface also allows you to integrate other course providers and preconfigured learning materials, making it easier to scale training according to your needs. And all of it can be done online.

Tech giants like Google and Amazon have taken things further by taking the initiative and creating their own programs to educate employees in coping with digital transformation. The subsidized online IT support certificate program at Google, for instance, has enrolled around 75,000 students. Meanwhile, Amazon has recently channeled $700 million of company funds to retrain 100,000 of its employees through its own post-secondary programs. Apart from their own employees, these tech giants have also opened these programs to the public.

Alongside their own independent training programs they also continue to partner with universities through offering online IT training and credentials programs as well. Google’s certificate courses are still integrated with Northeastern University’s stackable pathways for their four-year IT degrees. Meanwhile, Maryville University’s online bachelor’s in computer science degree heavily involves training in the use of cloud software like Amazon Web Services and Microsoft Azure. And apart from integrated credential programs with tech giants, these university IT degree programs also include intensive courses in programming languages and other skills pertinent to the ongoing digital transformation happening in industries across the globe.

In short, the lines are blurring between online degree courses and independent online corporate training systems. Whether through degrees from schools like Maryville University and Northeastern University, or through the certification programs at companies like Google and Amazon, there’s no shortage of digital tools for empowering employees to better cope and develop within digital transformation models. And for virtually every industry or business model, this has made it easier to develop employees as well as a good working environment.

The Power of Analytics

The aforementioned examples of developments in employee training and the digitization produce a lot of data. This data can then be organized, parceled through digital tools or AI, and analyzed for actionable business insights. This is the process of analytics in a nutshell. And it’s a process that can be applied to fast-track employee training, optimize manufacturing or logistics operations, calculate insurance premiums, and a host of other use cases wherein sizable amounts of data can be found and analyzed for insights.

The use of analytics for business intelligence has been around for years, and one of the most promising developments in the field is the use of AI for augmented insights. Combining AI-enabled machine learning and natural language processing, companies using augmented insights have faster access to actual actionable insights that can optimize their operations or allow them to pivot with more agility. In fact, IT giant and global research firm Gartner predicts that the use of augmented insight-driven reports for business intelligence will be the norm in 2021.

Therein lies the inevitability of digital transformation. Whether you want to increase productivity, improve the way you train employees, optimize operations, and make the most out of your time and resources, the answers lie in embracing the digital transformation of industries.

Written for cogentanalytics.com

Jennifer Vivian

8 Steps for Small Business Project Management

Small Business Have a Big Role
Small businesses play a big role in the overall health of the US economy and in the well-being of a large percent of the population. They employ almost half of people in the workforce and account for about 99.9% of all US businesses. It is apparent that having successful, sustainable small businesses is in the best interests of the country and its citizens. But at a small company level, how should owners and employees manage their work to drive success and ensure their futures? How should they identify and isolate specific actions to drive new business, cut operational costs, ensure employee loyalty? How should they create, deliver and charge for products/services and provide an acceptable level of profit?

What’s Business As Usual (BAU)?
Small businesses can sometimes get caught up in focusing on activities that have made them successful in the past, but may not consider initiatives to ensure ongoing success, growth or scale. This makes sense on some level because it’s that ‘business as usual’ or BAU that is the lifeblood of a company. But, small companies need to consider activities that can lead to new business opportunities or allow them to run their businesses better, if they want to continue to thrive.

A small business would be well-served to institute a practice to identify opportunities for innovation or ‘renovation’ and create new initiatives separate from BAU. If an idea is sufficiently vetted and promises tangible results to the business, undertaking the actions necessary for success can be organized into a project complete with a scope, budget, timetable, assigned resources, deliverables and metrics. While this may seem to invite the bureaucracy and complexity seen in much larger corporations, small businesses can undertake project management at a level that allows appropriate organization and structure to ensure success and institute good business practices that can be applied for future initiatives.

8 Steps for Project Management
So how should small businesses go about project management? First, business owners should consider having regular idea-generating sessions to identify opportunities to innovate for generating incremental revenues or for improving operations for generating incremental profits. Once a good idea has been chosen, take the necessary steps to plan and organize the work create a foundation for success:

Clearly identify the benefits of doing the project. What is the expected impact on sales or operational expenses? Are there other benefits you desire such as customer loyalty, employee morale, industry recognition or employer wealth and security? When you identify specific, measurable benefits, you justify undertaking the actions necessary to achieve those benefits which can then be organized into a project.
Create a specific scope of the work to be undertaken. The scope should encompass the exact area(s) of your business that you want to address while putting limits around it to avoid scope creep, which often plagues larger organizations. Simply put, the scope is the body of work you and your team intend to do to achieve your desired results.
Develop a project plan. As Antoine de Saint-Exupery famously said, “A goal without a plan is just a wish.” Your project plan should a list of discrete tasks to be completed over a specified timeframe with assigned responsibility. Keep in mind that a plan does not need to be cumbersome or adhere to a specific format. A simple Excel file might suit your needs or, if you’d rather start with a project plan template, try searching the Internet for samples specifically designed for small businesses.
Set up a team to do the work. Reach into your organization to assign the best team members to your project tasks. If one of your employees helped you come up with an idea for a project, think about giving that person a key role in managing the work. By putting a project structure in place, you will be creating an environment that will stretch you and your team to become more ‘business-like’, moving from technicians working a craft to managers driving a project.
Identify tangible ‘deliverables’ or work products that you expect to create during the initiative. Deliverables might include the creation of a new web page to attract niche customers or a defined set of work practices to boost productivity. You don’t need to solve the problem up front when coming up with deliverables, but try to identify what you expect to create, so you’ll have something to show for your efforts after you complete the project.
Come up with a budget. Having a budget does not mean that you must earmark a specific dollar amount to complete the initiative. It may be better to approximate how much time you want to dedicate to the project for yourself or for your employees. For example, you might allocate a certain number of hours per week for you and your selected team to have meetings, make customer calls, document processes in the warehouse or do any other activities over the course of the project. You might also allot a specific amount for expenses such as travel, supplies or outside services. These elements can constitute a budget that you put in place up front to ensure you and your team are putting a reasonable amount of effort into achieving your goals, and not wasting time and money in the process.
Identify specific ways to measure your results. Define the metrics you will use to determine if the project is successful. You’ve already identified the outcomes you want to achieve when you justified doing the project. Now you’ll need to put together a few key performance metrics to determine if you achieve those outcomes. Check whether your metrics are well stated using the SMART technique: are they Specific, Measurable, Achievable, Results-focused and Time-bound? Use these metrics to track achievement of objectives over the course of the project and when it’s completed to ensure you’re making sustainable changes.
Communicate early and often with your team. If you are embarking on a new way of approaching work, your employees are going to notice. Tell them up-front what you are planning and why you are doing it. Involve them in the process and make it clear why the intended change is good for the company and good for the individuals. Ask for input and feedback as you go along. Celebrate success and look for obstacles that may inhibit progress, so you can be proactive in managing them.

To get started in using project management for improvement initiatives at your company, it might be wise to engage outside help. Cogent Analytics has a staff of experienced consultants to can help you identify game-changing ideas to improve your business and set up the project structure you need to ensure success. Even small businesses can benefit by leveraging practices usually employed by larger organizations. Just be sure to equip yourself with the appropriate resources and tools for your specific needs and get ready to plan and execute projects to help you build your future!

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

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Three Unavoidable Operational Risks

There are three unavoidable operational risks common to all businesses if they survive and grow. These risks are predictable and addressable, so long as the owner knows what they are looking for. Everything else is “just management.”

Risk 1: Managing the growth exceeds the owner’s experience and knowledge

When company growth out paces the owner’s experience, the company will suffer. Growth is always the goal, but when an organization grows faster than anticipated, the business is put in the position of either turning down profits or rapidly expanding. Turning down business is an alien thought to most business owners, so they expand. Hiring new employees can be difficult. What if the new employees don’t mesh with the rest of the team? What if they are not as skilled as their resume indicates? Ideally, the business owners will leverage standardized and highly clear-sighted hiring practices to ensure that they avoid the Three Biggest Hiring Mistakes.

If the owner decides that they don’t need to grow their team, they must be aware of the additional strain that will be placed on existing employees. If you work them harder, then you must have a strategy to alleviate their frustration and make them feel as though their additional work is appreciated. Keep the 5 Primary Motivators in mind when working with employees who are stretched thin, as these are the times when a motivational misstep could be the most detrimental.

The real issue arises when the business owner doesn’t know how to manage success. It is an interesting paradox; businesses can do so well that they fail.

When this happens the owner has two options: learn and adapt or bring in outside help.

Taking classes and reading books is the slower of the two options, if the business is hemorrhaging money and in danger of going under then the business should bring in outside help.

Risk 2: Change in ownership or upper management

Many businesses fail when they change ownership because:
– The new owner doesn’t have the correct training or knowledge.
– The old owner never really hands over control and continues to try to run it.
– There are no stable or sustainable procedures in place.
– The old owner had the operations in his head or in books that are indecipherable.
– The new partners are unable to co-manage

If you integrate new leadership into existing structures before they take the reins, they will have time to adapt to existing systems and procedures. This will lessen the shock that comes with a managerial transition.

Risk 3: Not generating enough revenue to support the overhead

When the expenses of the business are more than the money that is brought in, the businesses will go under. You can deal with this risk by ensuring that the business has a strong revenue stream, this means evaluating the effectiveness of the sales team and the job costing/bidding structure. Determine where money is being left on the table, then stop leaving it there.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Inventory Management in 3 Steps

Many businesses manage inventory well. Firms that recognize the importance and benefits of excellent inventory management, typically have better customer service, higher margins, and more robust cash flow. Follow the below three steps to improve your product management.

First, you need to have the products organized and a system to track inventory. While this sounds simple, many smaller businesses without an ERP system overlook the importance of even a simple spreadsheet that can record and track stock on hand. Stock is an asset, and it should be treated as such. When supply is untracked and unorganized, the result is more time spent troubleshooting, which can lead to unnecessary purchases. Keep track of what you have on hand and what is on order and ensure the inventory records are accurate. Proper management will save time and money and will increase efficiency and productivity.

Second, forecast your demand. In addition to being organized and tracking on-hand inventory, it is also essential to have a system or process to predict the market to determine needs before they are needed. Identify which items are high moving and stock those, if you can delay purchases do so. Cash is always something to manage and optimize, and proper stock management will maximize the money tied up in inventory. Don’t waste precious capital on slow-moving products. Proper demand management helps you figure out exactly how much inventory you need to have on-hand so that you to stock just enough inventory and minimize what is required in the warehouse.

The third is having a specific area for receiving and stocking products or materials, which should include a designated area for returns. While this is technically keeping organized (step one above), a good inventory management process requires extra discipline concerning returns. Returns need to be processed quickly, and often a proper return authorization (RGA) is required. Ideally, there should be a visual cue to identify what returned inventory needs an RGA, what has a pending RGA, and what stock has an RGA and is waiting to be returned. Once you get authorization to return, do it quickly. You have already paid for the inventory, and it will take time for your vendor to process the return and give you credit.

Proper stock management both requires and promotes an organized warehouse. If your warehouse is not held, you will have a challenging time managing your inventory. Better inventory planning (forecasting) will help identity which products are needed. If your product list is organized correctly, there will be a clear way to tell what products are stocked. Be space-efficient and cost-effective; proper inventory management is a sound business strategy.

Businesses can control inventory to increase profitability in their business. When a company manages inventory well, it will reduce the cost of goods sold. They will also be able to order more of the materials or products that sell well rather than ordering the things that do not sell as well and take up a useful resource, space. When businesses can keep a better supply of in-demand products, they are more likely to sell that product to a customer, rather than losing the customer to a competitor when they are sold out. This will increase revenue and the customer experience leading to the retention of customers for the future.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Business Continuity For Small Business Owners

Business Continuity is a highly relevant concept for any business. For an SMB/SME, it is even more critical as the SMB/SME typically has less duplication and redundancy than a Fortune 500 enterprise. Business Continuity is sometimes equated with Risk Management, which is a big part of Business Continuity, though Business Continuity is more than just Risk Management.

What is Business Continuity?

Business Continuity entails broadly the following:

- Internal Risks and Obstacles

- Internal Opportunity Management

- External Opportunity Management

- External Risks Management

Internal Risks and Obstacles:

For an SMB/SMB, the critical part of internal risks is to eliminate business loss due to single point failures. Following are examples of such risks although the list can be made much longer:

Business Standstill due to:

- - Key personnel not showing up, one day or for more extended periods or not at all.
- - Fire, electrical malfunction, Internet equipment failing, essential computers failing, HVAC environment control equipment failing, sanitary facilities failing, plant Structure failing.
- Lack of compliance with crucial oversight authorities such as EPA, OSHA, and other state and federal entities

Severe Business Impact due to:

- Theft

- Fraud

- Gun violations

- Work crew action as to work stoppage

- - Moving the business to a new location
- Cost of Capital changes

There are numerous remedies to manage each of these and other single point risks, some examples:

- Computers, have one standby laptop or desktop that can continue the work while the primary one is being repaired or replaced.

- Data management, have backups stored offsite in case of fire or theft. Encrypt sensitive data.

- Fire and such risks, don’t just go through the motions of complying with inspectors to avoid fines, use those inspections to activate continuous improvement to eliminate any business loss.

- - Cross train personnel, have a “brick plan” in case of significant changes to an employee’s status.
- Use external resource to make significant moves while your team continues the business to the degree that is possible.

Internal Opportunity Management:

A key value in a culture of continuous improvement is also the addition to the notion of:

Business Continuity Blog Image Cogent Analytics Knowledge Center

This means that if you don’t keep improving your competitiveness every day, you eventually will be outcompeted by a company that does.

Business Continuity assurance uses tools such as continuous improvement and workforce engagement in the process and workflow efficiency to reduce the risk for many of the single failure risks mentioned above. That said there will be times when changes will have to be made, e.g. in personnel or critical equipment and the aspect of business continuity is here the key to avoiding business loss.

As much at it is tempting to walk an in-subordinate employee out the door, the impact short term to business and medium term to other employees can be significant. Such changes need to be planned end executed efficiently for best business continuity practices.

External Opportunities Management:

Many times overlooked risk for business continuity is the lack of insight as to what business the company is in and how to survive industry changes in markets and business opportunities, one example of this is the recent cancellation of plastic drinking straws. Here a business that is focused on this product needs to find a substitute product that can be marketed to the same market segment it currently has.

External Risk Management:

As much as a business can control its own business, there are external factors that are outside of the SMB/SME owners risk management abilities to avoid the actual event. This is where business continuity comes into place in external risk management.

Such are:

- Major flooding and Forest Fires

- Earthquakes

- Tornados and Hurricanes

- Major Electrical Outages

- - Energy supply shortages
- Trade Wars

There are remedies for many of these as well that can be executed with manageable investments; one example of business continuity for external risks is to have an evacuation plan for essential equipment and documentation/information assets in the case of a significant flooding or area evacuation. All of these types of management fall into business continuity and should be taken into account in any small business.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Time Study For Small Businesses

Where does the time go? Can a procedure be more efficient? How long does it take an employee to finish a task? These questions and many more are posed by business owners every day. One of the best ways to find the answers is by doing a time study of your business. 

Time studies have been a part of industrial productivity improvements for centuries. In the past, these methods have included costly time measurement and method specialists working minute by minute on each task analyzed. 

A significant issue with time studies in history is that workers behave very differently when someone is watching over their shoulder. 

Modern methods utilizing smartphone technology now allows small business owners to execute this analysis at a minimal cost with much better and proven results.

The ‘trick’ is to install a Time Sample App on your smartphone and attach the phone to a discrete placement such as an electrical conduit.  Using this you can video a specific work task and without having to watch it for hours identify start and parts and finish with clear time stamps. 

See figure one. There are numerous low-cost smartphone holder attachments; this specific one is a flashlight magnetic holder that one can find at the hardware store for $10. 

Figure One: 

time lapse study smart phone attachments

Legalities: 

Timestamp cameras do not record audio which would be an agreement requirement as to who is audio recorded. So, there is no need to contact your attorney. Videotaping of your site is same as Safety/Break-in/Burglary video coverage which is in your control as a facility owner. 

Though for integrity with your personnel you should inform them that you are taking some video samples for training purposes, which is correct as this method is very useful for making internal training videos as well. 

Do these time studies over time, over several days, and weeks, and you will have very useful results at a quite minimal cost. And another ‘pair of eyes’ which every business owner needs and can use.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Company Vision Should Emphasize Customer Service

How can you create a customer-centered culture that promotes quality customer service? This is one of those things that a lot of owners have heard about, sort of know they need but have no idea how to go about making it happen. If you have no idea how to do it, then your competition probably does not know either.

This is why you ought to consider creating a company vision that focuses on providing outstanding customer service. If you are doing it, and your competitors are not, then you develop a reputation of being the superior company, which usually results in more sales.

How it will help you

Let’s be very clear. Field of Dreams is a movie and its famous line – “If you build it, they will come.” – it is not true.

You are in the business of selling what you produce. Too many failing companies stress the creation of their product or service as primary while selling it is only a vague afterthought. It is common sense – Operations, production, and sales all become easier when a business’s customer service vision is the focus of everyone’s actions, decisions, and strategies.

How it works

When you identify your customer service purpose and values, everything follows from there. The company’s goals are more realistic and easier for every person to understand. The customers’ perspectives and experiences impact how managers and employees think and act on a daily basis. It is not just the sales department’s job to sell.

A client-centered culture flows from top to bottom and bottom to top. It is everybody’s – owner, managers, and employees – responsibility to sell through excellent customer service. They all work together; holding each other responsible for establishing and maintaining the vision.

They understand the client comes first; they are growing in the same direction. In a healthy and positive workplace, troublemakers often leave the company quickly. Peers do not support Their behaviors and attitudes or tolerated by management.

Creating and maintaining a company vision based on excellent customer service is not always easy, but winners do the things that losers are not willing or able to do. It requires discipline and commitment at all levels but is worth the effort. It is your choice, so ask yourself,

company vision customer service culture blog image

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Standard Operating Procedures Enable Success

There is not much in business that is as unexciting or demotivating as figuring out, writing and enforcing a standard operating procedure (SOP). But, standard operating procedures lead directly to business success, and they need to be done.

What is exciting and motivating is better quality, the creation of a skilled workforce, decreased warranty costs, higher profits, a reduction in turnover/sick time, fewer accidents, healthier margins, lower waste, less rework, more sales, reduced legal/financial risk, increased employee productivity/efficiency and improved customer satisfaction.

What is a standard operating procedure?

A SOP is a written, detailed “how to” document – a road map to business success. It describes the step-by-step actions required to complete a routine business task. The goal is to get consistent employee performance; each task ought to be performed correctly every time. It is supposed to be in compliance with laws, regulations and the company’s policies.

It should also be:

Available at the place where the work is done, as well as in operational manuals.
A simple, clear, easy to read outline.
Brief with only necessary actions included.
Used for employee’s training.
Focused on safety and efficiency.
Updated every year, or every other year, depending on the business’s changing needs.

Where do you need standard operating procedures?

SOPs are management tools designed to achieve business success. They should be used everywhere.

Production/operations
Sales and customer service
Human Resources
Employee training
Legal
Financial

Why do you need standard operating procedures?

Whether it is a document, or a workflow app, creating SOPs is time-consuming. But, if you want sustainable growth and stability, they are vital. In the long term, it is well worth the initial effort and will save you time, trouble and frustration in the future. Here are a few of the reasons why your business’s success is more likely if you have them.

Springboard for strategic planning – You cannot get to where you want to go until you know where you currently are. Going through the process of creating SOPs gives you the chance to see the real – concrete information, not guesses – state of your organization. The clearer the understanding you have of its processes and employees the better your ideas will be for future plans and strategies.

Saves time and money – When the same job, process or task is done in different ways by different people, the time and money used to complete it can wildly vary. It is just good sense to put a system in place that trains employees to accomplish more in less time and money.

Provides consistency – Quality, quality, quality. Productivity, productivity, productivity. One of the biggest benefits of enforced SOPs is that they make sure all employees are performing a job or task in the same correct way, no matter who is doing it. They make it easier to replicate good behavior throughout the company. This allows you to grow quickly, profitably and efficiently.

Improved communication – A written procedure makes everyone’s job easier. When used properly it eliminates guesswork and misunderstandings for owners, managers and employees. How a job should be performed is right there for all to see, refer to and follow. In addition to the “how,” a SOP lets the employee know “why” they are doing something a certain way.

When a person understands and agrees with the “why” then they are more likely to do it right. If they do not understand or agree with it, then managers have a chance to provide additional training and education. There is also an opportunity for the employee to give valuable suggestions on how to improve the job and the SOPs.

Creates a safer work environment – Effective risk management requires employees to perform in a safe, consistent way. When employees perform in different ways there can be a legal or regulation liability.

It happens every day – good, well-intentioned owners are beaten by a poorly run, unregulated workplace. Their companies fail because they do not know that, when properly used, a standard operating procedure is essential for business success.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Generating New Prospects

Often times our clients need to generate additional revenue. They may have a dozen good reliable customers but in order to increase their profits or cover their overhead or replace customers who stop using your services; you need new customers. You need to generate new leads and educate those prospects as to your services and abilities. We need to determine their needs and show them how we can satisfy those needs. Before you can sell however, you need to generate the leads that will allow you to “get your foot in the door.”

The first step is having a library card or access to a library card. This can be done in person usually at any branch. You may need a proof of residency for the county or city that runs the Library. Oftentimes, you can also obtain the card by going on-line to the library web site.

Next, make sure that your Company Website is current and up-to date. Once you make contact with someone they are sure to look-up your Company to make sure you are legitimate and to size up your capabilities. A website with typographical errors or incomplete sentences or grammar mistakes will not reflect well on your Company or your professionalism. Ensure that the website gives an accurate picture of your goods or services and any unique abilities that your Company possesses. Ideally, a good website should be a major factor in creating “demand generation.” In other words, creating an awareness of your Company that people in need of your services or your products might see your Company as a means to fulfill these needs and actually reach out to contact you through the website. However, if we are not getting calls or inquiries, we need to seek out our own new leads. This is where the next step can be very helpful.

The next step is to have an understanding of the North American Industrial Classification System or NAICS. This system classifies and assigns a number to every industry in North America. This system can be accessed on-line by searching “NAICS.” This will give you various industries with the appropriate numbers to enable you to track these industries. For example, if you provide services such as maintenance, servicing and repairing of industrial equipment (conveyor belts) you may want to research those industries where a conveyor belt would be used. They most likely run 24/7 and need regular maintenance or repair frequently. Some examples would be tire plants, paper mills, quarries, and food processors. By going to the NAICS website you can enter the keyword for your industry (paper mills) and the number 32213 comes as a general class number but this can be “drilled down” to Corrugated or Folded. The corresponding numbers are 322211 and 322212. This process can be repeated for all of the industries that you think might need your services.

Another method for selecting industries is to research your biggest customers and determine what are their NAICS Codes. (They may have more than one.) Be careful because the codes are often entered on the tax return by their accountant and can be erroneous or are a code for a segment of the company you are not familiar with. Double check that the number is linked to the service you want to track. Once you have determined the correct number you can research other companies that you could approach to sell the same services that you currently sell to your existing customers.

The next step is to make a list of all the NAICS codes for the industries you are interested in approaching. Once we have our list, we can now access the local Library databases.

Now you need to get online with your local library website. As part of their reference department, a most all libraries subscribe to a database service which have numerous research possibilities. Some of the popular systems used are “Reference USA”, “Hoover’s”, and “Mergent.” Any one of these systems would be suitable. Once you find the “databases” on the library website you select “databases.” This will give you many choices for research. However, we are most interested in those that have “business statistics.” In one database the choice is Mergent Intellect. Once you access this database, you should select the setting for “Advanced Search.” Then select “industry” and select “NAICS code” to use the codes selected. Enter the NAICS code that you want to research and then hit “add to criteria.” Now if you want to check for industries in your region, state, county or city, you can now do that by clicking on “location” and then scrolling down to select the geographical criteria you want. You may want a list of companies in your state or neighboring state; or you can select your county or neighboring county depending on the size of the industry you are tracking. You then add this to “criteria.”

[There may be some small variations between databases and how they are set-up to accept data, but a call to the library reference desk will usually get a very helpful librarian to walk you through any unfamiliar steps.]
This process will produce the names of the companies that are in the selected industry in the geographical location that you want. Highlight the name of the Company on the list produced and it will drill down to give you other essential information such as, number of employees, sales volume, phone numbers, pay history, family tree and date of founding. All of which will help you determine whether you want to pursue this company as a prospect.

As you research each company you can make a list of those who you may want to follow-up on and those who do not look like good prospects; not enough sales, slow pay, too far away etc. Get the phone number and address for those you are interested in.
At this point, someone should be designated to make a call to obtain the name of the decision maker such as head of maintenance or facilities or head of engineering. This will give us the ability to customize a brochure or pamphlet with his name and title and mail it directly to his attention. Ideally the brochure will fit into an envelope that we can mail first class and it will not get put into the “junk mail” category. This may allow you to bypass the “gatekeeper”.

Some people may prefer to call right away and try and reach the decision maker but you may be dealing with the gatekeeper who will not forward the call. For that reason, a brochure or pamphlet sent in advance might open the door or get some name recognition when you do call. The pamphlet or brochure could be the reason for your calling and it gives you an opportunity to explain the types of services you can provide to their company.

All of which can be done without leaving your office and wasting time in non-productive cold calls.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Ideas to Help Grow Your Small Architecture Firm

Service-based businesses often find that they simply don’t make enough profit no matter how many clients they have or how amazing their staff members are.

Let’s take small architecture firms as an example. You, as the firm’s owner, may look around and feel that everything is running well. You have a great staff; the clients you have currently are happy with the work you’re providing. Your reputation is sterling. So, what’s happening with your profit margins?

Of course, you’re scraping in profits to pay your staff and sustain the business but at what point will the company actually, begin to grow? If you bring on more clients, more money will trickle in with your current staffing situation. However, eventually, you will have to hire more architects, especially if you’ve already reached the capacity at which your present staff can operate, and continue your exemplary work. You’ll be back to square one; therefore, bringing on more clients may not be the answer you’re seeking at this moment.

You may feel as if you have explored all of your options and you only have to hope for the best. We don’t agree, and we have a few ideas that may make a big difference in how you might grow your small firm and increase your profitability.

Architecture Firms Often Experience Different Types of Monetary Leaks Than Most Other Industries:

Failure to track the time spent per project– if you look at the time spent on your projects, it’s possible that you’re giving away services and time for which you could be charging.

Product Sales– If you’re not stocking a line of fittings and fixtures that you could sell to clients, then you’re leaking money.

Additional Services– If you’re giving away services that you could be charging for, you’re leaking money here too.

When you begin the process of providing a quote to your potential clients, consider creating an ‘additional services’ section. It doesn’t have to be extensive, but you know very well that you have talent and expertise that your clients may well need to receive. They will also desire the quality of service you have a reputation for providing. If there is an opportunity for clients to select additional services they will know that they have more control over their needs and you will no longer have to provide ‘all-inclusive’ services every time. This quality added feature alone will allow you the opportunity to improve the services that your clients will select.

You will always have the original tier quality of services that you typically provide. However, pulling back some of the higher end services that you may have been giving away, but should have been considered extra; you will gain the potential to “upsell” them to your clients. At the same time, you will provide your company more income per project.

Consider Rebranding and Marketing to High-Value Clientele ”

Should you eventually deduce that the best plan of action would be to find higher paying clientele– You may quickly realize that this is not always easily accomplished. Unless you already have a talented marketing team on staff, you will find that you may need to hire experts in various fields to assist you in the process of moving your firm to the next level.

Firm Reestablishment– will most likely require rebranding the firm so that you’ll have the ability to appeal to clients who need to spend a lot more than $10K to receive the competence and services they require to accomplish much larger and more intricate projects. You may realize that (as you submerge yourself in these changes) up until now; you’ve been providing $50,000 worth of services for as little as half their value!

While you’re repositioning the direction of your firm, by all means, be aware of the value of working with branding experts. Developing a branding strategy is of utmost importance, and can be a daunting task. You must decide whether or not to reintroduce yourself into a new and much higher paying market, with finesse and success.

Rethink Your Marketing Strategies – The architecture and design industry has changed significantly. Winning design work on the integrity of a portfolio is in the past. Firms rarely market their services to acquire clientele. With the rise in competition, clients are becoming far more sophisticated in the procurement of architectural services through social media and digital marketing options.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Don’t Let Employee Theft Decide Your Success or Failure

A major part of the American Dream is building and owning a successful business. Every year millions of dollars, hours of sweat equity and unlimited hope are poured into starting and running them. Also, every year about 20% of them close because of employee theft – that is 1 in 5.

That statistic seems unbelievable, but some experts think it may be higher. When you look at the numbers, it makes sense. Fraud negatively affects smaller companies more than larger ones because they are unable to absorb the loss. Employee productivity is lower than it should be; cash flow can be uneven; cash reserves are less; receivables are slower, and customer default is higher.

The Association of Certified Fraud Examiners estimates the average small business loses approximately 5% of revenue each year to employee fraud. Fraud includes theft of products, time, money, inventory, raw materials, equipment, supplies and other items. 5% in a small business can mean the difference between a profit or a loss.

So, employee theft can be the difference between staying open or closing the doors. Even if you are able to stay open, it also affects your ability to afford other things. You may not be able to “ pay yourself a decent salary, make capital improvements, start a new product line, buy new equipment, hire more employees, or grow and expand.

Given its potential for harm, why aren’t more owners concerned about it? Why aren’t they taking steps to fight it?

Most think it will never happen to them, not understanding that it probably has already happened, is currently happening and will happen in the future. Depending on the study 75% – 85% of workers admit that when the circumstances are “right” they have, are, or will steal. The right circumstances are a combination of motive, means and opportunity.

Motives ” Motives are the explanation’s employees use to excuse their dishonest behavior. These self-deceptions allow them to feel justified in stealing time, money and property from your company. How they feel about you has nothing to do with their honesty ” they will take from employers whom they love, like, hate or fear “ so long as they believe their reasons are valid.

Means – Motive is not enough for fraud; employees also need to have the means. They must have the knowledge and ability to manipulate the system. A bookkeeper can embezzle money because she has access to the books. Stock goes out the back when the foreman creates and uses an inventory method only he understands.

Opportunity ” An employee can be willing to steal and know how to do it, but the opportunity must be available. It is almost impossible for employees to steal if there is oversight and follow through. Most will not try, and those who do are caught before they do any significant damage.

Theft, embezzlement, and fraud are everywhere. Like it or not, it is human nature “ remember the 75% – 85% who admitted to past, present and future dishonesty when given a chance. You can take away their motives, means, and opportunities with well-defined tracking systems, checks, balances, policies, and procedures. Do not let them determine the success or failure of your company

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Identity Theft: How Vulnerable Is Your Business?

According to the Bureau of Justice Statistics, more than 17 million individual American citizens are affected by identity theft. Since the larger data breaches have occurred over the past year, the larger corporations have taken notice and worked fast and furious to get their systems protected. Today, according to the Department of Homeland Security (DHS), approximately 31% of the attacks that are occurring, are against small businesses and organizations that employ 100 persons or less.

In an article published by the Identity Theft Resource Center (ITRC) ” DHS, in partnership with the Secret Service and others, said the attacks were pervasive, with ID-theft criminals scanning computer networks of businesses for vendors or employees who had remote access. passwords for network access.”Hackers then were able to run programs to attain usernames and usernames and passwords for network access.”

When a small business is attacked, not only is the very livelihood of the business and its owner(s) threatened, but a small business’ employees and customers are also at risk. Small businesses are far more vulnerable to identity theft than much larger companies and corporations for the mere fact that perpetrators are fully aware that small businesses generally have more cash and/or credit available than larger corporations.

Small Businesses are Most Vulnerable If:

A criminal manages to ‘hijack’ or obtain your business information. They will likely acquire credit for themselves with your business information and under your business name. If your information is acquired by a thief, it’s probable that you won’t be aware until you begin receiving bills electronically or otherwise. At this point, it’s likely that extensive damage has already occurred affecting not only your reputation and business finances but your personal finances.
AND/OR
If you own a business that collects an abundance of personal information, i.e., birthdates, social security numbers, account number information or any other personal information, there are consumer protection laws that will make you entirely responsible if you’ve failed to protect your clients/customers from identity theft. At this point, your business is likely spiraling into an abyss and could easily place you in a position of losing your business entirely while facing years of cleaning up a virtual disaster. It’s a good idea to consider doing a monthly or quarterly security check-up to ensure that your systems are updated and secure.

To Avoid Small Business ID Theft Disasters Begin by Following Digital Security Best Practices as Follows:

Eliminate all paper billing that comes to you. Paper billing is too easy to acquire if you fail to shred it.
It’s not always possible to eliminate all paper billing so do yourself a favor and invest in a high-quality shredder. Even better hire a shredding company who will come to your business and pick up your paper and shred it for you and recycle it.
There are many businesses that absolutely must keep some paper files. In this case, consider a multiple level security filing systems. Simple, locked filing cabinets are vulnerable. Consider placing your locked filing cabinets behind closed and locked doors whereas only one or two trusted members of your personnel have access to gain entry.

As Soon As Your Paper Systems Are In Place Add These Best Practices:

Provide a secured internet router
Provide a secured wireless network system
Provide VPN for any external access
Be certain to implement strong firewalls
Provide protected physical access to your company’s computers and systems
Use automatic software (Windows or other operating systems) updates
Limit the software that your employees are allowed to install
Secure ALL offsite data storage that you use for your business
Continue to create multiple and redundant data backups
Keep an offsite copy of your backups
Most importantly, train your company employees with regard to digital security practices

From security inception, monitor your business credit reports as often as possible or delegate this task to someone you trust. This small act will help you immediately spot any potential tampering. If you spot it, you can stop it immediately.

Carefully Select Whom Will Have Access to Your Data:

Just because your company may be small does not mean that you shouldn’t secure your data like a large company. Larger companies generally implement multi-layer security systems; follow their lead.
Not every employee should have access to all of your files. Limit your company’s access according to the department they work in, with a trusted administrator.

Create Very Strong Passwords:

Almost every small business uses computer systems in order to conduct daily operations. Therefore, each individual employee must have their own employee ID and password allowing each employee their own access to the computer system.
Never use passwords such as 12345678 or 11111111 or 32132132. The unique, long passwords must be used.
Consider password tools that will create new and unique passwords as needed. Should you find that any of those passwords are hacked, you won’t have to change every password on your system.
When an employee exits the company under any circumstances, the administrator must immediately turn off all access to any of the employee’s accounts.

Small business identity theft is becoming increasingly serious. You must secure your systems, keep them updated and monitored. Do not procrastinate, doing so will leave your business more vulnerable by the day. Implement the best practices, and you can put your mind at ease. Failure to do so could potentially destroy what would otherwise be a successful small business. Remain vigilant and enjoy continued success.

For more statistics on identity theft and cyber crime in 2019, read this blog from broadbandsearch.net.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Procedural Systems: Get the freedom You’ve Always Wanted

Is there anything that gets a bigger yawn than talking about procedural systems?

Maybe not, and it is too bad because a lot of business owners have the wrong idea about them.

These are some of the things they say. “They are too hard to put in place.” “I don’t know where to start.” “I went into business for myself so I wouldn’t have to follow policies and procedures.” “Only big companies need those – we just wing it.” “I don’t need any of that because I’m involved in everything anyhow.” “It’s too expensive.”

But, here is the head-scratcher:

While they are saying they do not want or need a procedural system, these same owners are complaining about problems caused by not having one in place. Policies and procedures can fix low productivity, poor quality, underbidding/estimating, employee theft, too many receivables, not enough cash flow, too little/much inventory, low sales, etc.

That is right – they are against the very thing which would make their lives easier because they do not really understand it or its benefits. A consistently applied, well-defined system gives management and employees the tools they need to produce a quality, money making product. It is usually the difference between a business’s success or failure.

More importantly – it is also the difference between an owner loving or hating his job.

A big reason people start a business is that they think it will give them freedom. They do not want to be restricted, confined and limited by working for someone else. They mistakenly believe that policies and procedures will take away their independence.

However, the exact opposite is true.

The biggest complaint long-term owners have is that they cannot enjoy the benefits of their hard work, because they are tied to the business. It falls apart without them because there are no self-regulating systems in place. The owners are the system, and that is a bad way to run a company.

They should not be the glue that holds everything together, because in time the company becomes a yoke around their necks. They end up being firemen, babysitters, and policemen. They become burned out and unhappy. Any freedom or independence they felt, in the beginning, is long gone. Now they feel like “just another one of the employees.”

Do not be caught in this trap. Your business should be working for you, not you working for it.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Paperwork Can Make Your Life Easier – Really!

No, seriously – paperwork can make your life easier if it is the right kind. If it is the wrong kind it can make your life much more difficult (living hell comes to mind).

Did you know there is a right kind and a wrong kind? Many owners do. Many do not.

A lot of us have to deal with the wrong kind, which gives us a negative attitude about it. We think it is the only type there is, and want no part of it. But, there are other options.

Too many business owners are all or nothing. They either have too many or too few policies and procedures – neither works. The right kind of paperwork is simple to follow, easy to understand and worthwhile to do. It is part of a system that defines, documents and gives everybody the information he or she needs to run a successful company effectively.

The goal is to have just enough policies and procedures to make sure everybody is efficiently rowing in the same direction. But, not so much they end up in a swirling whirlpool frantically rowing and going nowhere. Or not so little they are scattered all over the river with no one knowing where they are going or how to get there.

So, how do you create the right kind of paperwork? First, ask yourself these questions:

What 3 goals do you have for the business? How are you defining, tracking and measuring them? When and how will you know if you have succeeded or failed? Why and how are your employees and key people contributing to or sabotaging them?
How visible, understandable and transparent are your processes? How did they come about, does anyone follow them and can you and others explain why he or she exists? Are they doing what you intended? If not, why not? If so, can you make them simpler?
What data and facts do you have (not guesses)? How often do you look at them? Can you and others use them as a management tool? Do they show how to correct problems and decrease risk (e., quality, compliance, operations, rework, customer concerns)? If not, why not? Can you make the data easier to understand and use?
Did you know the number one complaint employees have is that management does not enforce workplace rules? All employees want structure and rules – yes, even the bad ones. What is your disciplinary system and is it in writing? Is it progressive? Do you enforce it? Why not? Why should good, responsible people work for you? What plan do you have to retain them?

If you want your business to be successful, and have an easier life, the objective is not “avoid paperwork” – that is shortsighted and counterproductive. The goal is to have only the right kinds, the ones who add value for you, customers and employees.

It takes commitment, time and work, to get started; worthwhile things usually do. Make no mistake, if it was effortless more people would be doing it. But, they are not, and more importantly, your competition is not.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

SMBs: Begin Tech Prep Now for 2020 Competitive Edge

Alright, so perhaps we’re pushing it a bit by looking at how we can help small businesses prepare now for 2020. However, we’re of the opinion that with the speed in which technology and business practices are advancing, we may as well give our small business readers a heads-up so that they will meet 2020 comfortably prepared and on a continued path to success.

2020 is already less than 2 years away and now is the time to make ready, not when it arrives. Don’t be caught in the trap of having to pay premium prices to catch up! In the here and now, in 2018 small business owners must keep future competition in their forethoughts. Small businesses must stay in line with the trends now to remain competitive and be on top of their game at the beginning of 2020.

Let’s take a look at the current small business mindset

According to a survey by Blue Corona Marketing, only 30% of the small businesses surveyed believe that remaining atop of technological advances is a major issue.
Insight reports that only about 53% of small U.S. business owners even have a website in place.
In a report provided by Fast Company that only about 50% of current small business owners have invested more than 5K in the past few years of business on IT solutions vital to the growth of their business.

If just these few attitudes toward technology investments in small businesses continue, competition nightmares are certain to ensue and soon. As a matter of fact, in an article published by Business Insider – “Gartner projects that more than 85% of customer interactions will be managed without a human by 2020.” The bottom line is, the sooner small businesses arm themselves with proper technology, the better their opportunities for market advantage by 2020.

Here are just a few ideas that will provide an immediate and long-lasting edge that small businesses should begin implementing now in order to remain technologically aligned and prepared:

Cloud Computing – According to an article in Forbes – “78% of U.S. small businesses will have fully adopted cloud computing by 2020.” This will afford small businesses the ability to store as well as access programs and information via the internet as opposed to depending upon hard drive storage (that can naturally become vulnerable). By making use of the operations and business tools, Cloud Computing will undoubtedly offer your business savings. It will also create a more effective team from a mobility standpoint. Collaborating would be instantaneous, and scalability simplified.

Services that small businesses can move to the Cloud:

Accounting Capabilities
Business Telephone Systems
Internet Web Hosting
Business File Storage and so much more

Artificial Intelligence (AI)

Artificial Intelligence is going to become vital to small businesses to help them keep up with their clients/customers. If as a small business owner you would like to get your feet wet, implement a chatbot on your website for starters. Many forms of AI are already in existence and are heavily in use. Small businesses may wish to begin now implementing AI.
Many companies specialize in AI, and with subscriptions and customer service can help you get set up. Some of them will allow their users to create chatbots that not only interact with their clients/customers on websites but will also communicate with the by SMS among other services. Some other possible services AI offers are predictive maintenance (industrial), client services management and even virtual assistance that will keep your calendar up to date!

Mobility Will Quickly Become Vital to Small Businesses:

As of now, according to the SBA, approximately 56% of consumer traffic that leads to U.S. websites is routed through mobile devices (smartphones, pads, etc.). According to Google, about 61% of those users who are unable to access a business website by a mobile device will not return to the site, and that about 40% are likely to visit your competitor’s website instead of waiting for a way to until they can get to a device that will access your site..
Small businesses must also consider the fact that receiving payments through mobile devices is expected to surge by 2019. Making payments to your company accessible by a mobile device will be an essential investment to make now. Employee mobility will become equally as relevant to your business by 2020.

Employee and Client/Customer Communications Will Become Necessary:

Internet-based operations and Cloud Computing provide you, your employees and clients the ability to communicate and collaborate from nearly any location on the globe in real-time. Tools such as Dropbox and Google Drive, for example, will continue to make collaboration and file sharing extremely simple for employees and even clients/customers if needed. Small businesses may also opt to use VoIP (Voice over IP) applications to remain connected. This will allow for a broader range of connectivity with employees.

The time is now to make these changes. There are other small business tools that will keep your business up to date and moving forward, that are both easy and affordable, and that can be implemented by small businesses. It will be vital that you remain abreast of technological trends now so that you aren’t lost in the crowd as the 20’s roar in, in the not so distant future. We will continue to watch small business technology trends and report them to you here.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Predictive Analytics 101

Businesses of all sizes, for decades, have been seeking answers as to how they would have the ability to improve negative business functions vastly before disaster strikes. With this knowledge, companies just may see enhanced operations and profitability.

Predictive Analytics, in layperson’s understanding; is the use of various types of data, machine learning techniques and multiple forms of statistical algorithms to assist in the identification of the future outcome likelihoods. These possible outcomes would be based on your historically provided data.

The point of these procedures is to change your company’s understanding of past adverse outcomes to seeing over and above what had actually taken place in any specific event to acquiring the best assessment, with the data provided for likely future scenarios. This will allow companies to learn from what their computers learn according to their historical input, therefore making it possible to improve decision making processes by seeing how the company has historically functioned in various aspects of the business and making appropriate changes with predicted information.

Whereas predictive analytics has been in existence for decades, these functions were best left to statisticians and math geniuses; only large corporations could afford the luxury of having these minds on staff, therefore, moving large conglomerates always significantly ahead of the game. Today, even small businesses are finding that with the continuous improvement within the realm of cloud solutions, they too are now fortunate to have the ability to benefit from big data usage.

It’s quite important to note that prior to implementation of predictive analytics software and learning the required procedures; the results would be highly dependent upon the types and amounts of data that is made available to the system. If correctly implemented, however, the return on investment can be quite impressive.

What Kind of Information is Gleaned by Use of Predictive Analytics?

Although the use of predictive analytics isn’t necessarily something that everyone would benefit from (just yet), as time moves forward, it’s expected to become a useful tool to more companies of all sizes. Currently, predictive modeling takes many forms beneficial to small and medium businesses and if the results are appropriately used, could profoundly affect profitability with:

Advertising searches, sales, and up-selling, potentials.
Highly improved marketing campaigns.
Forecasting potential results regarding increased revenue with various business types.
Forecasting how to optimize both mechanics and possible added revenue in manufacturing. (2016 Honeywell Study)
Forecasting and understanding new product development. (R&D Mgmt. Case Study – Electronics)
Forecasting possible outcomes with construction revenue. (2017 Initiafy)
Forecasting potential supply chain issues. (Supply Chain Brief – study)
Risk management
Cyber security
Fraud detection and much more

These are just a few examples. Once implemented, the level of clarification made available to decision-makers will make it possible to create far more superior operations across all aspects of the company/business. Not all decisions are equal or even have common threads in many cases. Decisions made operationally generally have right and wrong answers. That stated, while seeking answers from a strategic standpoint the findings will often be ambiguous. Although predictive analytics open discussion for both types of decision-making processes; in order to make this possible, the business would have to adapt their own modeling for both situations. Regardless, the analytics selected would need to be most suited to the needs of the company and of course, with a competent analytics team.

How to Know When Predictive Analytics Should Be Considered?

Before the implementation of predictive analytics, it’s essential for small business owners and managers to make specific identifications:

What would be the value of the solutions your business is seeking?
What are the current problems you would like to forecast?
What are your current internal data sets?
What are the outcomes your company would like to see?

Should Your Company Opt to Implement Predictive Analytics?

Discussing the implementation of predictive analytics is easier said than done. If a company would like to consider implementing this form of analytics, they must take the time to determine the following:

Consider the nature of the decisions your company would need to make.
What are the liabilities your business may face in the event the leadership team were to make inferior or questionable choices?
Decide the company’s best resources that would enhance the use of a predictive analytics strategy once it’s in place.

Keep in mind that the use of predictive analytics would be an extreme asset especially if the cost and the risk of a series of bad decisions would be exceptionally high. Would this be the case, it would be in the company’s best interest to explore these options. It’s entirely possible that predictive analytics could be a valuable resource to your small business if for no other reason than to improve the likelihood of efficient decision-making processes, and keep risks low in other business aspects. It’s definitely worth the exploration.

Today, however, the use of predictive analytics is used in so many ways. Overall it’s used to empower businesses of all sizes to experience a far greater degree of efficiency by having the ability to forecast inventory, how it will be used, manage various resources and of course, increase revenue, not to mention avoid the loss of revenue to the inability to see the possibilities in advance of potential disaster.

This analytics may be used to:

Determine client/customer purchases or responses to advertising.
Create risk reduction in many areas of your business.
Detect encryption abnormalities to eliminate cyber security

The term itself isn’t an easy description. However, the fact that it’s rapidly becoming critical for businesses of all sizes to utilize it, we would like to help educate small business owners and managers with regard to its importance to small business success.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Rewards: Unnecessary Pay, or Positive Reinforcement?

Most every small business owner desires dedicated, hardworking and loyal employees. The problem is how to do you cultivate and reinforce those values? We pay people what we believe to be a fair and competitive wage for their work, yet that may not be the only means required to foster the winning attitudes desired. How many times have you heard “but that is what I already pay them to do.” Maybe. Do you pay them enough not to make mistakes? Maybe. Do you pay them enough to give extraordinary customer service? Maybe. Do you pay them enough to go the extra mile? Maybe. Do you pay them enough to expect quality work all the time? Maybe. The answer might be that we pay the going wage and expect all of the above but don’t always get it.

Naturally, owners have high expectations for their money spent; not all of which get explained conveyed or taught to all of the employees. So, are you getting your money’s worth? More importantly, are you reaching your company goals and expectations?

A vast number of small businesses do not have goals or measurements in place to rate employee performance. When it comes to the majority of their employees; “We really can’t tell how to distinguish among most.” They can name a few of the best employees but really can’t rank the others. They do not measure performance. For that reason, companies revert to the bonus system as their method of reward. Some may get a little more money, but others may not even get recognized. As we have maintained all along “You cannot manage what you do not measure.” However, once you put measurements in place, it becomes incumbent on ownership to put rewards in place to continue to encourage the best practices.

What are we looking to accomplish?

Increase productivity.
Motivate.
Reward high achievers.
Develop “team players.”
Retain key personnel.
Say “thanks.”
Increase profits.

These may be our stated desires, but our ultimate objective is to set goals and keep score by measuring how close we come to achieving the goals. Some of these may be obtained with an incentive and others may require different means of stimulation.

A brief look at the most common means of additional motivation might be advantageous.

BONUSES

Probably the most common form of motivation is the bonus, typically based on the overall performance of the company. Unfortunately, the amount given often depends on longevity and not individual performance. It is often arbitrarily determined. There are usually no real criteria applied to determine the amount awarded; nor do the employees know what to do to better qualify for the award. Often the same amount is allocated for the same class of employee regardless of individual performance. Structuring a bonus this way can often accomplish the opposite of the desired outcome because it creates jealousy and resentment among the employees who worked the hardest when they get the same reward as some who do not perform as well.
The bonus may be one means of saying “thanks” and buy some short-term loyalty, but that seems to be the only two on the list of desired goals.
Another common problem with bonuses is they become an entitlement. That is, the employees come to expect they will get a bonus at Christmas regardless of how they perform, which has the adverse effect of not increasing productivity or motivating better performance.
It lowers profits (pay-out) without getting much in return.

INCENTIVES

The usual requirement for an incentive is that it comes from an increase in profits brought on by the change in behavior that the motivation has created. The best example of this is in construction. We have bid a job with 100 hours of labor, but we tell the foreman that if the crew can complete the work in less time than the bid, we would split the savings with him and his crew. For example, if they finish the work in 90 hours, we have saved 10 hours. If our combined crew rate is 80 dollars per hour, we have gained $800 in savings on this job. Therefore, splitting this brings the crew $400 and the company an additional $400 in profit. Productivity now increases as well, as an extra 10 hours may be applied to new work.

It accomplishes most things on our list of goals:

Motivates
Increases Productivity
Increases Profitability
Rewards High Achievers
Promotes Teamwork for that Crew
Says Thanks
Helps Retain People (As long as they earn the Incentives)
Increases Profitability (Company keeps a share itself)

So, this incentive accomplishes all of our goals to some degree. The drawback to this incentive is that the hours needed for the job are set by someone else (an estimator), and they may not be accurate. Secondly, the degree of reward may vary significantly from job to job.

Not every project taken on by the company is conducive to creating additional measurable profits. For example, a data entry person has little they can do to increase profits. The company receptionist will also be hard-pressed to improve earnings measurably. However, if they are perpetually out of the incentive loop, we will be defeating the motivation goal and that goal of retaining the best employees.

INCENTIVIZED BONUS

This would be a hybrid product. Measurable goals need to be set for each position. They may be as simple as a customer call, email or letter to praise the employee for the job they did. We say that we will pay $25 for every customer citing this good behavior. We cannot say that it immediately raised our profits, but we know that 56% of people share their positive experiences. A dissatisfied customer will tell 9-15 people, and 13% of the dissatisfied will tell 20 people about the problem.[1] So, why do we want to reward excellent customer service? It likely leads to more positive word-of-mouth marketing and referrals for the business. It is what we want in an employee, but we do not always get these results. It is an out-of-pocket expense, but since it is tied to performance or goals, we hope it will result in positively affecting behavior which will lead to referrals and higher profits.

Other forms of measurement can be rewarding crews for documenting their critical work with photos that we can keep on file, or for sending in the daily reports with the time sheets, all of which slow down the back-office work if not done on time. Obviously, there may be duties that we already expect for their pay, but if it is critical to company performance, we may need to measure and reward on top of the base pay.

Now, this system can also have deductions for mistakes found in work; such as failing to pass an inspection or for the poor quality of a particular installation. So it can work both ways with positive cash for good behavior and deductions for mistakes made. Keep in mind that deductions may not come out of the employees pay but can be deducted from the incentive dollars they have earned.

SPONTANEOUS REWARD

This would be a situation where we have not set any specific employee achievement goals, but we recognize behavior or actions that are above the norm. It may be someone just taking extra time to explain a situation to a customer. It might be someone going out of their way to make a delivery, or it might just be an outstanding attitude on the phone.

Whenever this “going the extra mile” is observed management should be prepared with gift cards, cash, discount coupons, ballgame tickets or extra time-off to bestow on the valuable employee. These rewards are best if disbursed swiftly and accompanied by an announcement of the reason for the reward.

This approach can be one of the most influential tools to modify overall employee behavior by getting others to go out of their way in hopes of being recognized themselves. The reward must be meaningful and spontaneous for performing above the average expectations.

SUMMARY

Recognizing that we pay people a base wage for their work, and once we set goals or begin to measure performance, we will need to reward those who out-perform the majority. The basic bonus is probably the least desirable. A combination of incentives and incentive/bonus, coupled with the spontaneous reward will probably get the most desired outcomes while boosting morale and getting the measurements and results the company strives to achieve.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Effective Management

Business colleges may take a semester or two to cover this topic. There are in-depth charts and analyses to sharpen one’s skills. However, for those of us that no longer have the time to devote to a semester or more of study, it might be good to establish a few ground rules and precepts to follow. Obviously, we need to confine this discussion to the fundamentals. However, here we are focusing on the management of small businesses and not that of large corporations.

First, we need to define it:
“Organization and coordination of the activities of business in order to achieve defined goals.”

The activity of management may incorporate the controlling, monitoring, planning and organizing of the steps necessary to achieve the stated goals. Various techniques and management styles may be used, but the objective is still to accomplish predetermined goals. Having defined goals is almost a prerequisite to having competent management and a successful company. Often, small companies have no set goals. They struggle in day-to-day operations and without goals delineated, there are no means of measuring success. They are willing to work a whole year and settle for what is left over for profits. Predictably, this lack of planning will often result in no profits and should be no surprise to management. Unfortunately, it does usually come as a big surprise because no one is, by definition, managing.

LEADERSHIP VS. MANAGEMENT “

In the small businesses that we are most familiar with, the difference between the two may be blurred. In larger companies leadership is thought to encompass the big picture; budgets, goals for the next three to five years, diversification, capital spending. It incorporates the vision and the plans necessary to achieve the goals. However, the same individual might be expected to do both in our scenario. Having consulted with management and determined the short and long-range goals, it may now become necessary to lead the employees to achieve them. Establishing a course of action or actions may require guiding and persuading the company personnel to follow specific steps that will result in the achievement of the predetermined goals. Thus, managing employees requires the “leadership” skills to reach the company goals.

MANAGEMENT “
Without a doubt, the objective is to reach the ultimate goals (revenue and profit) set for the company. However, there may be various intermediate milestones that need to be tackled first to accomplish the final objective. To achieve these, the “managers” of the company must lead the employees into making the correct decisions and actions that will give us the desired results. So, the question is really how is “management” accomplished? Techniques may differ, and some may be more effective than others, but a few overall principles should apply:

Be Consistent- Treat everyone equally.
Be Persuasive- Demonstrate the reason and thought behind a particular task.
Short-term Goals- Focus on the intermediate steps that when accomplished should lead to the overall attainment of the bigger goals.
Job Description-Well defined with tasks, responsibilities, and objectives.
Define acceptable results.
Find methods to improve employee’s work- Use of Key Performance Indicators to measure the effectiveness of employee work.
Universal involvement- Key Performance Measurements for all.
Staff Meetings-Coordination between all departments and employees- Use regular staff meetings to highlight progress and report KPI’S.
Teach and Inform-Teach individually and inform all as to progress and best practices.
Avoid Criticism- Mistakes will happen but correct in private
Prescribe remedies to mistakes and inform all.
Minimize risks.
Uniform teaching is done by the best at their job.
Promotion- Use as a reward for high achievers.

SUMMARY
We have previously defined “Leadership” as setting the long-term goals for the company. Once we set goals, we find that management techniques require measurement and the use of “Leadership” to bring all employees to achieve them. Set the goals, and lead!

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

3 Challenges in Transportation

It is an excellent time to be in the transportation industry. E-commerce has been good for it and will continue to fuel its growth. Growth creates challenges and trucking companies – who want to be successful – must change to meet them. The companies which can adjust will profit from the new opportunities the next several years provide.

Here are three challenges a carrier must overcome in the next few years.

Changes in Capacity – At of the end of 2017, the electronic logging device (ELD) mandate took effect. Experts predict a productivity drop of 4% to 6 % as companies start to comply. This compliance will have a negative impact on capacity at a time when there is an increasing demand for it.
Buyers’ Expectations – Business-to-business (B2B) and business-to-customer (B2C) buying habits and expectations are shifting. They are increasingly expecting faster, more flexible delivery and pricing options.
Freight Demand – The shifts in B2B and B2C delivery requirements have caused carriers to switch to more frequent shipments which are lighter in weight. Companies have to learn how to set rates based on density rather than tonnage, and still make money without pricing themselves out of a contract.

What are some of the answers to these problems?

Focus on Logistics – Logistics have always been critical in transportation, but today’s shipping challenges make it more so. A business’s operational efficiency and productivity will make or break it in an industry where new standards are being set (i.e., just-in-time delivery, automated warehouses, multi-vendor, multimodal, final-mile).

Improve Technology – Many trucking companies do not efficiently use technology, but that is no longer an option. The time has come when it is impossible to take advantage of the e-commerce boom without the right technology. Contracts with minimum tech requirements will soon become the norm, with particular emphasis on mandatory security.

Implement Analytics – Tracking and calculating margins, estimates, costs, bids, cash flow, productivity, and profit becomes complicated as loads are smaller, more frequent, and with more diversity. Carriers without best practice analytics are going to have a difficult time managing their rolling costs per service line, mile, route, driver, and truck.

Transportation companies who can adapt during this period of growth will thrive; those who cannot adapt will not survive. Think Netflix vs. Blockbuster. Remember that while you cannot control change, you can control how you respond to it.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Get to Really Know Your Customer (And Make More Sales)

Ask a business owner what he needs to make his company successful, and most likely he will say “sales.”

Then, using the questions below, ask him about his customers, and most likely he will give you a blank stare. Odd as it seems, in many businesses, there is a disconnect between the idea of needing more sales and the reality of knowing how to sell.

All businesses, no matter the size, need an effective sales plan. A well designed, consistently executed strategy which will generate new customers, as well as retain current ones; a program originating from the customer’s needs and wants. Unfortunately, the majority of companies do not really know who they are trying to sell to and do not have a method to find out.

Owners forget, or do not know, that effective selling requires intuition and science. They ignore the science part and just go with their “gut.” But, feelings are not facts, and good sales plans are a balance of instinct and fact – each dovetailing with the other. You need both the gut and the analytics. If you want to be successful, you cannot afford to ignore the analytics.

So, where do you start?

The first and most important place to start is getting usable, actionable consumer data. Actionable data is information you use to create the “how to” of selling. It tells you the best way to sell to your customer based on the facts you collect about them. You want the who, what, when, where and why of your customer.

Here are some general questions to get you started – add others which are specific to your business.

Who is buying from you? What is their age, average income, sex, occupation?

What are they buying? This query is so simple it often gets overlooked. What products and service lines are selling? What should you focus on and what should you discontinue? Figure out what your clients are purchasing from you, not what you think they should be buying.

When are they buying? Are they buying full price or waiting for promotions/discounts? Is it seasonal? What would they be willing to purchase offseason? When is the best time for you to discount, offer new products, or do a sales push?

Where are they buying? Are they buying at your location, online, at their business or over the phone? Where would they like to buy? Do you need to offer easier, faster purchase options?

Why are they buying from you? What makes you unique (i.e., pricing, quality, product line, location, reputation)? Which products do you provide that meet their needs and wants? What don’t you offer that would meet their needs and wants?

Gathering this information will take time, but there is a reason that “know your customer” is a fundamental sales principle. Once you can answer these questions, you will be able to turn the data into an effective sales plan; a plan focused on retaining and increasing sales to your current customers and finding new ones.

Strategic Planning – How Important is it?

A lot of business owners know about the benefits of strategic planning, especially when they see their competition using it and growing. But, many do not know if it will help their company.

One common question business owners ask is, ‘Can it really help me and my particular situation?’

Yes
It can help you, and your company, become and stay successful. There are many benefits to strategic planning, here are just a few.

• It can stabilize your business – you will become proactive rather than reactive. It lessens the likelihood that you will be a victim of unforeseen circumstances, an unpredictable economy, and poor paying clients.
• Planning defines realistic, measurable goals and objectives. It gives you, and everyone else, a clear way to reach them.
• A strategic approach can finally turn your good ideas into money-making products.
• It greatly increases the odds that your business will survive long term – based on skill, best practices, and good management rather than luck.
• Increased market share, quality, productivity, sales, customer satisfaction, profitability, ability to withstand competition, problem-solving skills, and financial control.
• Stops or reduces rework, self-inflicted problems, employee dissatisfaction and difficulties, unprofitable service lines, bad debt and poor inventory control.

Another question business owners ask is, ‘Is strategic planning as important to my business as everyone says it is?’

No
This might surprise you.

No, strategic planning is not as important as some people say it is. It is not a magic wand or a silver bullet. In fact, strategic planning without strategic management is almost worthless. A plan is only as good as the people who implement it.

Plans cannot and will not take the place of good management. They are made to supplement, structure, inform and strengthen leadership, but are not a substitute for it. You can have an excellent plan, which will provide you with all the benefits mentioned above. But, if it is ignored, poorly executed or sabotaged it can do more harm than good.

Strategic planning, coupled with strategic management, is invaluable to any size company. They are the pathway to success – with proper planning and the right people you can reach or exceed any dreams you have.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

How to Get Your Project Approved

So you have a great idea and want to pitch it to your leader. You know it’s a great idea, so how do you persuade the powers that be to give you the green light? Well, as the joke goes all leaders are from Missouri, the ‘show me state’… so show them it’s a great idea! In order to get that buy-in, it’s your job to illustrate the vision and impact of your idea in a compelling way.

Where to start?
You must start with the big picture by asking how the idea benefits the organization. Facts, figures, and passion are all required to paint a full picture. Leverage storytelling to share compelling data in a way that appeals to the heart and mind. Explain what success will look like and how the future will change for the better. If you don’t have the data to back up the idea, go back to the question of how does this benefit the origination? If you can’t answer that question, then your idea needs more time to incubate.

Once you can answer how the organization will benefit, your job is only beginning. The flip side of that coin is the actual plan execution. This is where the rubber meets the road! If the timeline or resources available are too restrictive, then the idea is still not ready. The new software you like might be affordable, but if it takes years to implement, it may not be practical.

Before proceeding with any proposal explore the question “what if it fails?” Imagine that you have the go-ahead and you launch the project. Then, things go horribly wrong and the project ultimately fails. Why could this happen? By exploring what could go wrong now, you can anticipate pitfalls and plan ways to mitigate the risks. Use this to better plan the project and present your proposal.

How much information do I need?
Imagine for a moment that you are the leader and your employee is pitching the idea to you. What kind of information will you be looking for? Generally speaking, if the idea doesn’t save time or money, it will be hard to persuade anyone that it will be worth the investment.

The information should be comprehensive, but presented in a succinct way. Costs will be associated with the entire process and should not be minimized or overlooked. Consider everything including time, materials, resources, people, systems, software and training. Using the worse-case assumptions here will help you avoid unplanned overruns later. You may want to consider including a range of costs from target through worst-case. Overall, be realistic and thorough. The worst thing you can do is to try to massage the numbers at the start, only to have to explain budget overruns later. This will erode your credibility and make it even harder to gain acceptance of your next big idea.

Proposal basics
As with any professional communication, you should present a polished proposal in writing. You are presenting an idea and putting yourself out there too. Don’t dilute the idea with poor formatting and spelling mistakes.

Consider your audience when writing the proposal. Leaders often wear many hats and have limited time. If you want your proposal read, you must keep it concise and to the point. Provide a summary and bottom-line cost impact first. All of the data and research should be available, but you want to hook your reader early! Make sure your data includes hard and soft costs, benefits including savings and any return on investment or buy-back information.

Provide easy to read charts, tables and avoid getting to fancy with formatting. Let the data speak for itself. If the data is complex, find ways to simplify it and try illustrative storytelling to convey the message.

Timing
As we all know, timing matters! If you walk into your leader’s office to pitch your proposal, but clearly something else is going on, alter your approach. If your audience is distracted by another issue or even emergency, how well do you think they will be listening? Instead, use this opportunity to see how you can pitch in and help, and reschedule your pitch for another time.

Remember, timing matters for you as well. If you are not well-prepared, you are less likely to be successful. Plan ahead and ensure you have buffer time for preparation. You do not want to be scrambling the morning of the meeting to refresh yourself on the details.

Response
Congratulations, you got a yes on your proposal! Getting your proposal accepted is great, and again, your work doesn’t stop here. Keep up momentum by transitioning into project planning activities. Make sure to provide regular updates to the leader and keep them updated on how the project is proceeding.

If you did not gain acceptance, reflect on the reasons why. Keep in mind, the reasons may be completely unrelated to your project. Either way, there are still valuable lessons to be gained. Think about the things you did well and what you could improve on. Ultimately, you still gained important experience by practicing building proposals. This skill-building will help you be better equipped to present your next big idea.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

MDM and How BOMS Can Blow Up Your Clients & Customers!

If you have ever worked in manufacturing or any logistical capacity that supports manufacturing; then you have worked with the Bill of Materials. BOMs are the core of your logistical master data. An inaccurate BOM can discredit existing or future manufacturing Enterprise Resource Planning or Business Process Management Systems (ERP or BPMS for short). By updating or upgrading these systems, you put your company and your customers potentially at risk for these data inaccuracies. In taking ‘true’ ownership of your companies BOM Master Data you can leverage against deploying an inaccurate BOM and prevent hurting your customers; all while setting up your company for accurate costing and inventories throughout your process.

Today’s manufacturing companies are continually updating/upgrading these ERP and BPMS systems. The risk and reward for these new systems can be great. But why the perpetual upgrading? Two potential reasons; gain a competitive advantage by aligning more with your customer based systems or gain more transparency in your accounting ledgers to better understand the costing structure through your manufacturing process. But regardless of the why, how do these ERP / BPMS upgrades potentially affect your customer?
The customer isn’t always aware of these ‘upgrades’ to your ERP / BPMS systems, and most firms don’t divulge that information to their customers for good reason. Why give your customer any unnecessary anxiety about your product quality or delivery if you don’t have to, right? But what if your customer notices an unusual ‘uptick’ in quality defect rates or missed shipments trends post-ERP / BPMS upgrade? And how does this effect your business other than potentially losing customers? (let’s come back to this point)

Back to the system ‘updating/upgrading’… the perpetual upgrade cycle can not only be costly in terms of paying annual or even monthly licensing fees, but it can also wreak havoc by creating inaccuracies in the BOM master data and how that data is consumed through your ERP / BPMS systems. But how can any manufacturing company reduce these upgrade ‘fees,’ and gain greater consumption accuracy in costing through their manufacturing process? Simple, take ownership of your Master Data.

Taking ownership of your Master Data is critical to any manufacturing company in today’s world of automated and often complex processing. By taking ownership, you have departmental accountability. Leverage any third parties working to update/upgrade your ERP / BPMS system and make them train ‘your’ people how to manage ‘your’ Master Data. Once properly coached or trained that internal accountability will drive your manufacturing master data to become ‘cleaner’ and well ‘governed.’ Your Bill of Material accuracy will increase via regular departmental audits, and liability to your customer will decrease. And what about the expensive cost of the ‘update/upgrade’ cycle? Well, your company will have the confidence in transferring legacy master data into the new system, and reduce project ‘life-cycle’ deployment costs by not starting from scratch. And by not starting from scratch, your company doesn’t absorb more billable hours via third-party contract entities.

(Now back to the ‘point’ we eluded to earlier). In the end, with better BOM’s you will be selling your customer not only the raw material, parts, components, and packaging that you say you are on paper; but you close any potential legal liability by not selling them something they didn’t pay for. Ultimately, we want the customer always to get what they pay for!

Please contact us if you want to learn more about leading your organization to that level of Master Data ‘ownership’!

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Wholesale Distributors – Beware Tech Hype

There is no question about it, technology has changed the industry of wholesale distribution, and it will continue to do so. If you are not already, you will soon be using these words – drones, IoT (Internet of Things), digitalization, e-commerce, M2M (machine to machine), big data, wearables, robotics, SMAC (social, mobile, analytics and cloud) – to discuss your business needs.

It is easy for business owners to get confused and overwhelmed by all the “you must have this now, and if you don’t you will fail” tech hype in the industry. Unfortunately, these feelings lead to bad decisions or no decisions. Some make rash, poorly informed choices – buying hardware/software they do not need, understand or use. Others delay making any choices – they still do not have an internet presence.

Fortunately, it does not have to be that way. Look at the last sentence of the first paragraph again. The two most important words in that sentence are not in the tech section, they are “needs” and “soon.” If you want to keep your operations up to date, while avoiding tech hype, those are the words to focus on.

Needs, not wants – The willingness to identify problems and the ability to fix them is still the gold standard for running a successful business. For example: tech can streamline processes and make your workforce more efficient, but only when coupled with good managers. If the real need is better owner and supervisor management skills technology will not fix the problem, no matter how much you want it to.

Soon, but not immediate – Timing is important, you are looking for the sweet spot of decision making. Unless you are very adept and interested in tech advances stick to the basics – let other, bigger, distributors take the lead. Let them look for new ways to go to market, spend a lot of money and make the mistakes. But, once they work it out, follow right behind.

Here are some questions to help you identify what your tech requirements really are.

What best practices do you need to stay competitive? What are your competitors using? What are your current and potential customers asking for? What does your supply chain expect? Do you have a tech problem or an operational one? Are you expecting a people problem to be solved by hardware or software? How can you use the systems you have more effectively?

Beware tech hype that promises too much and delivers too little. The basics of business success still apply – cut costs, increase productivity and efficiency, decrease waste and avoidable mistakes, grow revenue through existing and new customers and develop effective management skills. Tech is just a tool; it is up to you as to whether it makes your life easier or harder.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

3 Ways to Get Control of Your Accounts Receivables

What is the number one reason small businesses fail? The answer is simple – they run out of money. They do not have enough cash flow to keep the doors open. There can be many reasons for why they do not have enough cash, but one of the biggest is mismanagement of accounts receivables.

A lot of small business owners confuse accounts receivables with cash. They think money ow ed to them is money they have to run the company with – it is not. Every day businesses close because they are out of funds, even though “on the books” they have enough to keep operating.

An account receivable is created when a customer buys something from you, but does not pay for it immediately. When you do not collect right away you become their creditor, you have loaned them the money. How well you manage these debts will determine: cash flow, company stability and growth, your ability to get loans, capital improvement expenditures and salaries/bonuses.

Here are 3 ways to effectively manage your accounts receivables.

Be Proactive
The best way to control debt is to not accrue it in the first place. A growing trend in small business is to require new customers to “prove” their credit worthiness for the first few orders. They are asked to pay via COD, credit card, on-line merchant or very short terms (7 days). Once a good relationship is established the client is offered the “benefit” of credit. Credit is a privilege, not a right.

This is not possible in some industries, while in others it is the way of the future. Contractors are notorious for their tactics – start a company, pile up massive debt, file for bankruptcy and repeat. A little bit of vetting can go a long way towards protecting yourself – not all sales are good ones, and some should not be made.

Establish a strict credit and collections policy
Establishing a clear credit and collections policy will help keep your risk low. A lot of owners balk at this suggestion, ant it is a mystery. The would not let a customer steal $50 off their desk, but would let him owe $5,000 180 days out. Be sure to include the following in your policy.

Set the lowest possible DSO (Days Sale Outstanding) for each customer based on their track record.
Create and update customer track records based on: on-line databases and resources, BBB ratings, credit checks, payment history with your company, etc.
Assign an employee to monitor and instantly follow up on overdue payments. The longer you let a customer go without paying the less likely you are to be paid. He will not think it is important to pay if you do not think it is important to collect.
Clearly state payment terms on all paperwork (i.e. warranties, service agreements, contracts, invoices, bills, receipts) and give a specific due date.
Cut off credit to overdue clients, sooner not later. It is not good business to extend credit to clients who are all ready behind; it just gives them a chance to get further behind.
Charge interest on overdue accounts.

Make following policies and procedures a mandate for everyone
All policies and procedures should be understood and followed by everyone, you included. Cash flow is the lifeblood of your business and an effective accounts receivable system is one of the things that will keep it flowing. Create a company culture where everyone is aware of how important it is to the success of the company and to their jobs.

By actively monitoring your accounts receivables you: make sure you get paid for your hard work, maintain a steady stream of cash and keep your business open. You are running a business, not a charity. Do not let other people increase their cash flow at your expense.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Too Many Hats – Tracking the Work

In most instances, we find that small business owners really enjoy the technical aspects of their job. They are passionate about “Doing the Work” – getting their hands dirty. Many also like the thrill of the hunt – “Getting the Work.” Consequently, these are the areas where most small business owners tend to focus their time and energy. A majority of small business owners I encounter dislike tracking the work – the financial controls of the operation. In fact, I would venture a guess that if you were to talk to ten entrepreneurs, eight (if not nine) out of the ten would tell you office work is the part of the business they enjoy least. As a result, many tend to avoid doing it. We find this typically trips them up and stifles their growth.

In the previous two articles of this series, we looked at a couple of the hats an emerging entrepreneur must wear to grow their company – getting the work and doing the work. As previously stated, somewhere between $1.5 and $3.0 million small businesses typically stall out because there are not enough hours in a day, or days in a week for the owner to wear all the hats. To keep growing, they must delegate someone to wear the hats.

More Profitable

In this article, we talk about tracking the work – the remaining hat an owner must effectively delegate to grow beyond the initial plateau. Unlike the other two, hats which most owners are reluctant to delegate, small business owners frequently have no problem handing this hat to someone else. Many entrepreneurs feel that getting the work and doing the work are where a company makes its money. While those aspects are essential to a company’s success, we find that keeping track of the work is equally important. The tighter the financial controls, the more profitable the company. The looser the controls, the more bad things can happen.

By turning this hat over to someone else in the company, they are turning over the control of the company. More often than not, we find that person is undertrained, and there are no real systems in place for them to do their job effectively. This can cause a variety of issues to surface in the business – from reduced profitability to poor cash flow, to low productivity and lack of accountability, to name just a few.

Financial Controls

We find that if an entrepreneur is to grow their company to the next level, they must have robust financial controls in place. If you can’t measure it, you can’t manage it. As a company grows and picks up velocity, finding out if they made a profit at the end of year when they do their taxes, is too late. To move to the next level, an owner needs a clear and accurate understanding of their financial performance on a day by day, week by week basis. By installing an operating budget and management dashboards, we help our clients proactively manage their company for a predetermined profit. We typically find it is necessary to help install a more robust cash management tool so owners can know their cash needs 6 – 12 months out. In addition to the financial management systems, we find somewhere between $1.5 and $3.0 million a business can typically cost justify a full-time controller, someone to manage the numbers.

Manufacturing Case Study

For example, several years ago, Cogent worked a pre-cast concrete manufacturer who had stalled out and was struggling. They weren’t as profitable as they would have liked to be, and weren’t exactly sure why. The owner tried to keep up the financial performance but readily admitted to their lack of experience. They didn’t know their true costs and as a result weren’t pricing their products correctly. Tracking materials and labor was like chasing vapor. Plus, as the company had grown and taken on larger and larger projects, cash flow became a killer.

Cogent was able to help them identify their true costs to come up with more accurate pricing which included a predetermined profit. We then set up an operating budget and management dashboards to help them better control their manufacturing costs. We installed project tracking tools to help better manage the production process. We also helped implement a twelve-month cash management tool to help the owner better anticipate and manage cash demands. Once the financial management systems were in place, Cogent helped them hire a full-time CPA to wear the financial management hat. This alleviated a lot of stress on the owner and freed up his time to focus on things he enjoyed doing and was better suited for. As a result of these efforts, the company has increased their bottom line by over 20% and boosted their top line by over $1 million.

Each company is different and this is just one example. However, to effectively grow a company beyond the initial plateau, we typically find owners must start to build a true organizational structure and delegate the responsibility of who wears the hats.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Why It Is Time to Take Cyber Security Seriously?

Do you lock the doors when you leave your business unattended? Is your office or building protected by a security system? Are your outside tools, machines, parts and vehicles surrounded by a fence and locked up at night? Chances are you replied yes to some or all of these questions. You replied yes, because it makes good sense to protect your stuff – your tangible assets.

So, why are you not protecting your other assets?

A lot of small business owners have been late adapters to cyber security. At first, their lateness was not much of a problem. While it did not help them to ignore the subject, it did not hurt them either. Cyber hacking affected only the few, not the many. But, that has changed and owners can no longer afford to close their eyes to the issue. Depending on the study 60% to 70% of small businesses have had a breach or breach attempt in the last year.

It is a given that cyber crime is here to stay and will get worse. Small companies are being attacked in increasing numbers because they have a lot of unprotected, valuable information (i.e. credit card numbers, bank account and routing numbers, employees’ personal data, passwords, social security numbers). They also provide easy access into larger, better protected systems. Many major breaches start down the supply chain in an unsecured system.

Therefore, providing adequate cyber security for customers, vendors and suppliers is now considered to be a standard line item, a normal expense. Owners are expected to know this and act accordingly. Large companies are starting to add minimum levels of cyber security to their contracts and will not work with companies who do not have them. Online buyers are told to only use web sites that have an Extended Validation Certificate (the green padlock).

In addition to protecting others’ information you also want to protect your own. The U.S. National Cyber Security Alliance reports that after a successfully completed cyber attack 60% of small businesses are unable to stay open past 6 months. They cannot reclaim the money stolen from their accounts and have no means to replace it. This situation is so common that there is now Cyber Insurance to protect against this type of loss.

Small companies are easy and lucrative targets for cyber attacks. Hackers have little to lose and a lot to gain by going after them. The days when owners could say, “I didn’t know” has past, and it is time for them to take the necessary steps to protect themselves and others. After all, you do not want to be the guy in your supply chain who put everyone else at risk because you were the weakest link.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Why Employees Steal – Because They Can

Like millions of other Americans having your own business has always been a dream of yours. But, unlike most of them, you went out and did it. You put time, money and effort into making your company a success. You made the dream a reality. Congratulations.

So, are you letting someone else take it all away from you?

Before you say no, really stop and think about it. The answer might be the difference between staying open or not. Every year occupational fraud, or employee theft, is responsible for closing about 30% of small businesses (U.S. Department of Commerce, 2015). The reason is simple math.

When employees steal time, money, supplies and products, many companies cannot absorb the financial damage. Participants in the 2015 Global Fraud Study “Report to the Nations on Occupational Fraud and Abuse” estimated the average small business loses approximately 5% of revenue each year to employee theft (The Association of Certified Fraud Examiners).

Five percent often means the difference between a profit or a loss. Even if your margins are good enough to stay in the black after a 5% hit, it can be the difference between paying yourself a living wage or not. Given how common and harmful theft is, it is baffling why so many owners are unprepared and unwilling to fight it. The only strategy most have is denial.

They think it will never happen to them. But, unless you are the exception to the rule (and you are not) your employees have stolen, are stealing, or will steal from you. Depending on the study, 75% – 85% of employees admit that given the right circumstances they have or would steal from their employer. Contrary to most owners belief’s, how they felt about their boss (liked him or hated him) played little or no part in their decision.

The right circumstances are simply a combination of motive, means and opportunity. All three components have to be available for fraud to happen.

Motive is the rationalization a person uses to steal time, money and property from the company. A rationalization is a reason he makes up and uses to justify his behavior. This reason gives him an excuse to steal. These reasons are as different as the people who make them.

“I’ll pay the money back.” “I don’t stop at home during work very much. What he doesn’t know won’t hurt him.” “I’m not getting paid enough, he owes me.” “It’s not a lot of supplies. I’m just doing a little bit of side work.”

Motive is not enough for fraud to occur. A person also has to have the means – ability, knowledge and access – to manipulate the system. A bookkeeper embezzles money because she knows how to. Stock goes out the back when the supervisor develops an inventory method only he understands and controls. A landscaping crew’s productivity is 30% lower than another one because they leave later in the morning, take long lunches and quit work earlier.

Finally, even if an employee is ready to steal (motive) and knows how to do it (means), the opportunity must also be there. If there are controls, checks and balances in place fraud can be significantly decreased or stopped. The bookkeeper may want to “borrow” your money and knows how to take it, but if you monitor the books, understand the financials and sign the checks she cannot get to it.

Every year billions of dollars, millions of sweat equity hours and endless hope are poured into starting and maintaining small businesses. Building a successful one is still a part of the American Dream. Do not let someone else take yours away from you. A smart and successful business owner will understand the elements of employee theft and use the knowledge to stop it.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Understanding and building an SOP

Companies are founded in order to provide a needed product or service. To grow and be successful, a company must provide its products and services at a consistent price and quality level. Successful companies follow a list of steps each time to ensure that products and services of consistent quality are produced. These steps are a company’s Standard Operating Procedure (SOP).

Small companies sometimes think that they don’t need this level of detail, so procedures go unwritten and products and services can be inconsistent. Subsequent generations of employees are not trained to the same standards as the first generation, so the service or product suffer, which may result costs increases.

When the steps are written down, the procedures become “standardized.” These steps or instructions are known as Standard Operating Procedures. Writing them down ensures consistency and facilitates training. The written procedures are the basis for the training guide.

While there are some procedures that are standard around the world (such as answering the phone by the 3rd ring with the appropriate greeting), others are unique to an industry, (such as job costing for construction companies), or specific to a business (such as how tomanufacture a bike).

A Standard Operating Procedure can describe the steps of a work process – (partially or entirely), a policy, or a job description.

Some of the symptoms that may indicate the need to develop Standard Operating Procedures are:

Sales are up but profit is down
It takes more employees to do less work
Unexplained drop in sales or customer loss
Product being returned and/or increase in customer complaints
Increase in re-work or comps
Jobs not completed on time or with excessive overtime
High employee turnover or low morale
Work not getting done and lots of finger pointing/blaming
Breakdown in communications

While at first it might seem like a good idea to develop written procedures internally, this can often lead to errors and omissions. It is typical for the person who is writing down the steps of how they do the job to assume that the reader has certain unstated knowledge. These assumed items are usually critical and not-so-common knowledge after all. Additionally, employees may have motives for writing down something different than the actual steps performed. For example, they may omit a step that they know is frowned upon by management yet deemed essential to success. Therefore, following the written procedures will not yield the desired results. For this reason it is best to employ an outside party to document how the actual procedures are being performed and determine whether they should continue being performed in the current manner or whether they should be changed. Standard Operating Procedures can be a company’s road map to success.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Understanding the Value-added Performance and Feedback System

Performance Management:

Performance management is the creation and effective implementation of a working environment within which employees are empowered and subsequently enabled to perform to the best of their abilities. In order to assure success, the performance measurement system that you utilize should be unbiased allowing you, as the manager or business owner, the ability to provide value added feedback to your employees.

Whether you are a business owner or an area manager, you are always faced with a full plate of actions inclusive of the responsibility to effectively lead and manage your staff. The idea of value-added performance feedback is to provide a system by which performance is measured in an unbiased manner resulting in effective and constructive feedback being provided to your employees. One important end goal of this system should be that you empower your employees to take control and have accountability in striving to exceed expectations and in continually improving their performance, which will in turn improve output and efficiency while making this huge aspect of your job easier.

Key Elements of the Performance Management System:

The following are a few key elements in the effective execution of a value-added Performance Management System:

Set goals that are specific, measurable, attainable, reliable, and timely.
Provide continuous measurement, evaluation, and feedback to your employees on their performance.
Implement a mechanism for the measurement of performance that is clear, constructive, and unbiased.
Open the lines of communication with your employees.
Set performance standards that enable employee empowerment and work to improve the overall performance and through-put of your operation.

Many of you are familiar with the term S.M.A.R.T. Goals. As such, you know that S.M.A.R.T. Goals are goals that are Specific, Measureable, Attainable, Realistic, and Timely. If set correctly, S.M.A.R.T. Goals empower and enable your employees to have accountability for their actions and the desire to continually improve performance.

Specific: Goals should be specific in that they clearly and demonstratively communicate employee expectations. I am sure many of you are familiar with this phrase, it has been said: “If you do not know where you are going, any road will get you there.” The same is true for goals. Each goal should be worded in such a way the clearly defines what is to be accomplished, why is it important, and how is it to be completed.
Measurable: Goals should be set in such a way that progress can be demonstrated over time through measurement of performance in attaining the goal. Goals that cannot be measured are quite difficult, if not impossible to manage. In broad terms the goal statement itself is a measure for the assigned task or project. However, there are generally multiple small measurements or short-term actions that can be built into the goal to assure success in attaining the objective. Tangible criteria for measuring progress toward goal attainment should be established.
Attainable: Goals should be attainable. This concept seems so simple; however, many make the mistake in thinking that setting complex, high reaching goals will alone assure success of the project or action to which they relate. In actuality, goals set in this manner can leave the employee feeling overwhelmed before the project or activity even starts. Goals should stretch the employee slightly so that they feel it can be accomplished through real commitment. Completing goals set in this manner can lead to the employee feeling a sense of accomplishment when they succeed and are subsequently motivated to provide continued quality performance.
Realistic: Goals should be realistic to assure that they are attainable. Realistic goals are goals that challenge the skills and knowledge of the employees performing the action; however, it should not break them such that they are defeated before the task even begins.
Timely: Goals should include timeframes for completion. Goals with a defined end point provide the employee with a clear target to achieve. The timeframe set for each goal must be what? You guessed it … timeframes must be measurable, attainable, and realistic.

Now that we have covered being S.M.A.R.T. in setting goals and objectives, we must now implement a mechanism such that continual measure, assessment, and result feedback is provided to the employee. The idea here is that we should avoid making the mistake of waiting until the end of the review period to provide feedback to our employees. Performance review results should never be a surprise to the employee nor to their manager. If we wait until the end of the review period to provide feedback, undesirable performance levels are not revealed and addressed until it is too late. This can potentially have lasting negative impact on business performance in that undesirable performance was allowed to remain unchecked for an entire quarter and sometimes for a full six months or more. Understandably, this can be quite costly to your business and sends the wrong message to your employees.

Performance management is the responsibility of both the manager and the employee. Meaning, it is the manager’s responsibility to clearly communicate the expectations and implement a system of unbiased measurement that provides accurate and constructive feedback to the employee. On the other hand, it is the responsibility of the employee to communicate to their manager if there are any areas where they do not fully understand the expectation or how it is being measured. The performance measurement and feedback system that it implemented should be established in such a way that it is inclusive of the following key elements: clarity of expectation, accountability level definition, unbiased feedback measurement, and review time frame establishment.

The performance management process, managers and business owners alike should work to prevent undesirable behaviors and poor performance from re-occurring. It is not only necessary to correct the bad behavior or performance issue but it is also essential to prevent their re-occurrence. Setting the stage such that the bad behavior or negative performance entity is not repeated will not only improve employee performance but will also save the manager time. It is a waste of time and energy that many managers and business owners cannot spare to address the same issue over and over.

Performance feedback need not only focus on the negative aspects but should focus on the positive as well. Employees should not have to fear going through the performance review process and at the same time managers should not dread the completion of this process with their employees.

In order to improve employee performance, it is not satisfactory to just simply say “perform better!” or “Fix it!”. Following these simple performance management elements will allow your business or department to run like a well-oiled machine. If the employee performance aspect of the business can run smoothly by empowering and holding employees accountable, then business owners and managers are afforded the much needed time, energy, and focus required in managing the other key elements of the business.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Utility

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A Cross-Docking Example

Implementing Cross-Docking with the Consolidation Method

1. Receiving and Sorting

2. Transfer and Consolidate

3. Outbound Shipping

Multiple Methods for Cross-Docking Success

Is Cross-Docking Right for Your Business?

Train Your Team and Expect Success

Navigating the supply chain to maximize profitability and sustainability

Understanding supply chain

Supply chain management

SCM with KPIs

Difficulties with SCM

Conclusion

Maximizing Business Potential: The Strategic Edge of KPIs

The Essentials of KPIs

Practical Application: Real-World Examples

Setting and Achieving Your KPI Goals

Choosing the Right KPIs for Your Business

Training, Tracking, and Discussing Progress

The Impact of KPIs on Business Culture

The Strategic Advantage of KPIs

A Quick Guide to Improving Your Business

The Awakening to Cyber Threats

The Value of Health Data

The State of Cybersecurity in Healthcare

The Scale of the Problem

Cybersecurity Strategies for Small Businesses

Implementing Best Practices

Conclusion: Adopt a Proactive Approach

The Company’s Security Framework

The Attack: A Wake-Up Call

Response and Recovery

Unnoticed Red Flags

Lessons Learned

Summary and Recommendations

Monitoring the construction project’s productivity levels.

Varying metrics in the construction industry.

Implementing project management software.

Automating your construction planning and cost controls.

Tracking mistakes can improve your construction process.

Attracting new customers to the construction industry.

The costs of using information technology.

Review your labor statistics.

Construction management and measuring project metrics.

The Supply Chain Management.

Looking at Supply Chain Visibility.

Understanding the Supply Chain.

Business Analytics, Identify Your Supply Chain Process.

Supply Chain Management, Closing Down Supply Chain Risk.

Benefits of Supply Chain Visibility.

Supply Chain Information Systems.

Business Decisions Based On Supply Chain Visibility.

Business Status and Initial Challenges

Business Process Management Solutions

Scheduling –

Daily Huddle –

Daily Production (DPM) and Weekly Review (WRM) Meetings –

Manufacturer Management Consulting Summary

Backlog is defined as the work we have sold but have not executed.

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Geographic market segments can also referred to as ‘territories or regions.

Demographic market segments are typically made up of groups of buyers that have common characteristics.

The way you interface with your customers requires different approaches.

Market studies by professional market research firms provide insight into your industry’s market segments.

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What do you know about critical supplies and the path travelled to your door?

What is Time Management, and Why is it Important?

Techniques in Helping Your Daily Activities and Actions

The Digital Workplace Training Room

The Power of Analytics

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