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Flexibility: The Profitable Difference that Matters
1. Flexibility: The Profitable
Difference That Matters
Laurie Harbour, President
Harbour Results Inc.
April 10, 2010
2. Economy “still” not rotating …
The only constant in today’s environment is change,
how can you turn this to your advantage?
3. FSEA Survey Results
61% have a clear vision and focus; but only 50% say that a business
plan is providing their roadmap for improvement activities
Only 5.5% had revenue growth in 2009; 50% kept EBIT the same
56% have seen growth in products & services offered
61% have the same number of competitors
Workforce was reduced at 56% of companies
72% have enough capability to meet demand today but only 50%
have capability to meet demand over next 2 years
Extended or discounted payment terms increased at 56% of
companies
4. FSEA Survey Results
Access to external capital has remained the same for 66% but the
rest say its harder to get
Maintenance and setup is not a major issue but only 22% of you
indicated the consistent use of lean operating techniques
Only 38% have seen documented improvement or cost reduction
from continuous improvement
61% have used the last year to train and cross train people
Only 50% have systems to track productivity or efficiency
Quality has not been affected in last 12 months; but only 17% have
formally trained their people in problem solving
Only 17% believe that your process for determining equipment and
facilities long term is effective
What does all this mean?
Flexibility is extremely critical to be successful and profitable
5. Flexibility Imperative
Foil
S D Cards
Stamping
U E Stationery
Embossing
P M Labels
Die Cutting
P A Logos
Gluing
L N Book Jackets
Design
Y D Folders
Flexibility - “the organizational ability to adapt to changes in the
marketplace with the goal of matching supply to demand exactly.”
Supplier consolidation will occur and demand will grow again . . .
leaving the strongest companies in a position to sell value vs. capacity.
6. Achieving Profitability
through Flexibility
Step 1 – Set the “Vision” – “Foundation”
Step 2 – Define and Assess Your Capabilities
Step 3 – Plan Your Capabilities Transformation
Step 4 – Focus on Differences that Matter
Step 5 – Lead your Organization
Flexibility is a difference that matters… focus on achieving it!
7. How Do We Begin?
Step 1 – Set the “Vision” – “Foundation”
1. Begin with the end in mind – VISION
2. Key people in key spots
3. Culture
People and companies tend to underperform to their
capabilities because we rush to the urgent at the
expense of the important!
8. Set the Vision for your Strategy
Step 1 – Set the “Vision” – “Foundation”
What is the company vision, mission, values (VMV)?
What does the company SWOT look like?
Do we know our customer? Our competition?
What does the company have to offer?
What markets?
What customers?
What is the strategy for achieving your vision?
Do you have the capabilities to enact the Visions?
Internally?
Supply Chain?
Your future success is based on strategies established today!
9. From Structured Organization…
Step 2 – Define and Assess Your Capabilities
Leadership
Design Quality Materials Operations Accounting
Form must follow Function not the other way around!
10. To Structured Capabilities
Step 2 – Define and Assess Your Capabilities
Planning Design Prepress Production Finishing Shipping
Core Capabilities
Conduct Conduct Perform Conduct
Perform Acquire
Employee IT Financial Continuous
Equipment Indirect
Recruitment & Acquisition Analysis Improvement
Maintenance Materials
Development & Support & Reporting Activities
Enabling Capabilities
Capability has two components
“Competency” ability to do something
Competency”
“Capacity” the maximum that can be done.
Capacity”
11. Align Resources to Capabilities
Step 2 – Define and Assess Your Capabilities
Example Core Process
Pre-Press
Materials Equipment IT Methods People Facilities
Resources
Resources must work together to deliver desired capabilities!
12. Evaluate Flexibility
Step 2 – Define and Assess Your Capabilities
Agile Match Supply to Demand
Quick Optimize Lead Time
Smart Eliminate Waste
Stable Standardize Capabilities
Unstable Unpredictable Outcomes
Evaluate both Maturity and Performance of the Capability
13. Evaluate Flexibility
Step 2 – Define and Assess Your Capabilities
Example Core Process
Pre-Press
Perform Custom Plastics Processing
Materials Equipment IT Methods People Facilities
Resources
Resource Evaluation is an input to overall Capability Rating
14. Organizational Flexibility
Step 2 – Define and Assess Your Capabilities
Planning Design Prepress Production Finishing Shipping
Core Capabilities
Conduct Conduct Perform Conduct
Perform Acquire
Employee IT Financial Continuous
Equipment Indirect
Recruitment & Acquisition Analysis Improvement
Maintenance Materials
Development & Support & Reporting Activities
Enabling Capabilities
Achieving Organizational Flexibility is no small feat!
15. 2009 Benchmarking
Step 2 – Define and Assess Your Capabilities
Defined focus and vision for
the future
Strong leadership team
throughout the entire
organization
Discipline and
accountability – no finger
pointing
Clearly defined capabilities
required for the future
Solid problem solving
culture
The best-in-class companies had these top 5 items
best-in-
consistently rate the highest in the HRI assessment.
16. 2009 Benchmarking
Step 2 – Define and Assess Your Capabilities
Lack of a long term strategic
plan, vision and mission
Lack of a strong leader that
coaches, mentors and
supports the team
Fire fighting and lack of a day
to day operational plan
Lack of operational focus and
a culture of continuous
improvement
Poor inventory management
and cash flow issues
The companies that rated the lowest in the HRI assessment
consistently scored poorly in these top 5 items.
17. Flexibility Transformation
Step 3 – Plan Your Capabilities Transformation
2011
2009 C a pa bil it y P l a nt 1 P l a nt 2
C a pa bil it y P l a nt 1 P l a nt 2 Management 70 70
Management 49 62 Sales & Marketing 65 65
Human Resources 60 69
Sales & Marketing 54 65
Finance &
Administration
70 70
Human Resources 60 62
Operations 70 75
Finance &
Administration
57 57 … … …
Operations 48 69 Overall 70 70
… … …
Overall 56 63
Ongoing Initiatives
Mid-
Mid-term Initiatives
Short-
Short-term Initiatives
Immediate Must Dos
(t)
Build Transformation Plans for each
Core and Enabling Capabilities!
18. Backward Thinking
Step 3 – Plan Your Capabilities Transformation
Define . . . The Future
Chart Back to the . . . Present!
1. Goals in writing
2. Written objectives to achieve a goal
3. System of measurements
4. System of accountability
Things That Get Measured Get Done!
19. Achieving Flexibility
Step 3 – Plan Your Capabilities Transformation
Pre-Press
Materials Equipment IT Methods People Facilities
Design
Production
Control
eKanban Die QCO Integration Work Cell Multi- Site Flow
Functional
Applying Industry Best Practices to your Operations…
These are the Differences that Matter
20. Leverage Flexibility
Step 3 – Plan Your Capabilities Transformation
Companies have to move into the future
DOING MORE WITH THE SAME!
21. Flexibility ROI
Step 3 – Plan Your Capabilities Transformation
Ongoing Initiatives
Mid-term Initiatives
Short-term Initiatives
Immediate Must Dos
(t)
More than ever in recent history, companies must
leverage working capital to fund their future investments.
22. Focus on Differences That Matter
Weed the Garden
Continuous Improvement
Process
Increase Throughput –
“More with the Same”
Creative problem solving
Program Management
Standardize and plan
assets for the future
Have you painted your company into a corner?
23. Leadership Must Lead
Set the right foundation
Develop a strategy
Put the right people on the
bus; in the right seats
Make decisions; let the team
make decisions
Eliminate barriers ; set the beat
Focus the team
Unwavering support: provide tools, observe,
learn, coach
“Management is doing things right;
leadership is doing the right things.” Peter F. Drucker
24. Achieving Flexibility
Step 1 – Set the “Vision”
Step 2 – Define and Assess Your Capabilities
Step 3 – Plan Your Capabilities Transformation
Step 4 – Focus on Differences that Matter
Step 5 – Lead your Organization
Don’t over engineer your future…
it’s about basic blocking and tackling
25. Thank You
Laurie Harbour, President
Harbour Results Inc.
lharbour@harbourresults.com
www.harbourresults.com