Get vision, mission and goals straight
Ask your manager what the long term vision is, when they don’t know, help them build it. We need to know what the company or department drives. What they think the world should look like in two years, what their position in the market is. A company vision, mission and goals can be translated into a vision for the department. Which can be translated into a vision for a production line. When there is a vision, the team can find out which product should be in the store. Combined with the BCG-matrix they can then choose what products to focus on to be able to offer the right products in the shop.
List your products
Let’s imagine we have a grocery store specialised in greens. There are many products in that store that we offer to our customers. Some sell fast, some sell slow. And depending on our customers' wishes we remove or add vegetables to or from our store.
Each crate in the store has only one product, like broccoli, oranges and carrots. In order to know what we are selling we take a look in the store. We see the crates of goods and we can see what sells good and what doesn’t.
The first step in an organisational transformation is to get a grasp of the products we are selling. We are going to make a list of all the products we are offering to our end customers. We don’t sell half oranges, we don’t sell semi-finished products. Only the products that our customers buy from us are on that list. Products might be services in this case as well.
Find out who your customers are
Next thing we do is to find out who our customers are. We need to find the target audience and define them in a way we can work with them. For this case we are going to create personas. These are fictive characters that represent the entire customer base for one product. So we create a persona for carrots and we create another persona for broccoli. These personas have distinct characteristics. And have different needs. Someone who is buying broccoli doesn’t necessarily need carrots; they have different goals for the product they buy.
Map the products
Off all the products in the shop we can create a BCG-matrix. In this matrix we can see which products are hot and sell well. We can also see which products are not sold very well and have a small customer base. Carrots are always a popular vegetable and can be considered a cash-cow. It will generate money no matter what. But some vegetables like salsify don’t sell well. They have a low market share and don’t have any growth potential as an independent product, these are called dogs and we might be better off in removing those products from our offerings. The other option is to innovate and pivot.
You might find new products that you need to discover the market for, rising stars, like multi coloured carrots or tomatoes. You don’t know if they will make money but you like to experiment with them and they have a big growth potential.
Get the processes chartered
After we know what products we sell we need to find out how we come to the end product. For vegetables there is a field to plow, fertiliser to put in, seeds to be sown, crops to be harvested, sorted and put in crates, transport to the shop, putting it all on display and selling it. Now this process can be done for any product. This exercise is called value stream mapping and takes in account all the work that is done, the failures that occur and the time that is spent.
Get a grip on dependencies
One of the biggest problems in creating products is that you are always dependent on other people, processes and some form of technology. We need parts only when we need them, not sooner (then we have dead money in the form of inventory) and not later (then we slow down the process). We need our team to understand the complete picture and share knowledge so all the stations can be worked upon when there is a holiday or someone falls ill. And we need the organisation and all the processes to support the goal we want to achieve.
We need to find out all the dependencies we have on the process we use to create a product. There are technical dependencies, like machines and maintenance. There are dependencies on other departments which deliver parts for our product. There are dependencies on knowledge within and outside the team. Find all those dependencies and add them to the drawing we are making. Draw arrows to the parts of the process they influence.
Put it all to practise
Start with finding out what the company drives, why it exists. Formulate the vision, mission and strategic goals for the next two years. Then reformulate with some people on your teams what that means for your product lines. You can make the goals smaller in this exercise, formulate the goal for over two years and break them up into smaller goals of three months each. It is important to do this with the people in the teams because you want them to own the vision and changes.
Next up is to define the products that match those goals, this can be done with product line managers or with some team members. First you make a list of all the products they are making, then you make the list smaller by taking out what is not actually in the shop. Then you plot the products in the matrix to form a picture of what is important and what is not.
For all the important products, the ones you will still be selling over two years you are going to create a value stream map with the team responsible for creating that product. You do this with the team because you want them involved. When they are involved they will commit to the changes as well. As a matter of fact, only their opinion counts, yours is irrelevant. You are here to facilitate the process and to come up with products that everybody likes to buy and build. This might mean that your pet project is killed, we call that collateral damage.
A VSM is simple for starters. Only the process is mapped from beginning to end. Then we are going to add on the mapping. We are going to add times it takes for each step in the process, we are going to add inventory stacks, we are going to measure defects. Defects are results of processes that are of insufficient quality. Nobody likes broken things, so we measure how much is broken and toss the defect in the bin (and preferably recycle when possible).
Improve
Since we mapped all the things we need to create quality products and we create a picture of the future it is now our task to improve. We are going to facilitate the team and the rest of the organisation to improve. We do this by working from right to left if we look at the VSM. We always start with the user experience. With our customers. For instance we take a look at what they need, how many of our products and what features of the product they use. We are going to improve on their needs. We are going to lower inventory based on their needs and try to deliver just in time (JIT). We will also put this JIT trick to work with our dependencies.
At least weekly we will go over our grand master plan with our teams to find what we can improve. Perhaps waiting time can be lowered. Perhaps we need to have more people able to work more stations and need some kind of knowledge sharing or transfer. Perhaps we need to go and talk to our suppliers to deliver smaller batches of parts more often.
With our managers we need to discuss what prevents our teams from reaching maximum performance. We need to discuss the impediments we face. They need to facilitate improvement, like we do. Operational concerns should come from the teams, strategic decisions should come from management. People should do what they are good at and they are perfectly capable of mentioning what holds them back as long as there is a safe environment to speak up. As a manager you need to create that safe environment, involve people so they own the product they make. Facilitate learning through reflection and regular intervals. Never tell people what they need to do, only show them the goals and the way to achieve that.
If you need help, just give me call. And as always, all feedback is welcome.
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