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Operational Excellence –
                    Improving Profitability




1.562.860.8637
                     ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
ITS NOT STRATEGY THAT MATTERS – IT’S EXECUTION THAT COUNTS




                                                              cpSphere
                                                             
                                                             Delivering Next Generation of Solutions




                                                                                                17215 Studebaker Rd. Suite 390
                                                                                                            Cerritos, CA 90703

                                                                                                          1.562.860.8637
                                                                                                          1.562.860.8611
                                                                                                   growth@cpSphere.com
            1.562.860.8637
                                                             ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
                                                                                                      www.cpSphere.com
            info@cpsphere.com
            www.cpSphere.com
Operational Excellence

     Systematic management of all the processes to achieve
        world class performance by:

                       Efficient utilization of tools

                       Optimization of Resources

                       Elimination of process waste / inefficiencies




1.562.860.8637
                                      ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
Lack of operational Excellence …



                         Results in
                           low profitability and cash
                           flow issues




                    When do you address it?
1.562.860.8637
                              ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
Operational Excellence Becomes a Concern
   when…
      Cash flow starts to get a little tight
             –      Trouble meeting payroll
             –      Suppliers are screaming for payments
             –      Inventory is out of control
             –      Expenses are rising faster than revenue

      Backlog starts to shrink
      Opportunities are missed due to cash flow issues


1.562.860.8637
                                        ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
Improving Profitability – Traditional Approach

      CFO/Department Head is responsible to lead
      the cost cutting efforts

           Focus usually is on cutting expenses


                                                                     
          
           Workforce                                Extend                Reduce
                        Scrutinize
            Reduction                             Payment Terms         Employee Perks
                        Purchasing



1.562.860.8637
                                     ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
Performance Improvement: Strategic Approach




                                                               Generate Ideas to
               measure the        identify waste
                                                               achieve a better
               current level of
                                                               level of output
               performance




                      Performance improvement is all about
                             organizational change
1.562.860.8637
                                    ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
Ideas Should be…


                                       • Effective
                                       • Efficient, and
                                       • Adhere to Market
                                         Forces




1.562.860.8637
                      ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
How to Generate The Ideas
   Value Stream Mapping

                                                                                    $
                    Visualize Your                    Eliminate                     Increase
                      Processes                        Waste                         Profits


                                                         
        Value Stream Mapping is a Lean technique              Lean: A business system for organizing and
        used to analyze the flow of materials and             managing product development, operations,
        information currently required to bring a product     suppliers, and customer relations to create
        or service to a consumer.                             precise customer value—goods and services
                                                              with higher quality and fewer defects—with less
                                                              human effort, less space, less capital, and less
                                                              time than the traditional system of mass
                                                              production.
1.562.860.8637
                                                ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
Purpose of Value Stream Mapping

      Identify processes where “Lean” techniques can be
       applied
      Help reduce / eliminate wait time
      Eliminate process waste
      Reduce production cycle and processing time
      Understand process linkages and dependencies
      Create the basis for “Lean” implementation plan



1.562.860.8637
                            ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
Value Stream Mapping – Case Study




1.562.860.8637
                                ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
Business Case
   Problem Statement                           Solution
   Losing Business to competitors due to       Improve lead time performance by
   long lead times and late deliveries.        synchronizing production with customer
                                               demand.
                                                      Key Requirements

                                                      1.        Reduce flow time to meet customer
      Ideal State                                               demand.
                                                      2.        Reduce RAW, WIP and FGI levels.
      • On-Demand
      • Defect Free                                        Measurements
      • 1-By-1
                                                           1.    Total flow time
      • Lowest Cost                                        2.    Inventory levels
                                                           3.    EBIT performance.




1.562.860.8637
                                   ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
Value Stream Map – Current Process




1.562.860.8637
                        ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
Team Brain Storming Session

     • Can Customer increase the size of the blanket order
       and provide us with a longer term forecast visibility?
     • Can we flow the demand down to the supplier with
       a longer term visibility?
     • How can we reduce wait time?
     • How can we reduce change over time?
     • Can we reduce lot size?
     • Can we merge production processes to reduce travel
       time?
1.562.860.8637
                            ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
Value Stream Map- Future Process




1.562.860.8637
                     ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
Strategy Implementation Check List


                                            • People
                       Do
             Plan
                                            • Product

                                            • Systems
              Act
                      Check
                                            • Processes


1.562.860.8637
                         ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
Next Step
     • How would you apply Value Stream Mapping into your
       Business?
                    1.   Share the business challenge with your key staff.
                    2.   Define business case
                    3.   Define a high level business process
                    4.   Define activities for each business process including wait time.
                    5.   Randomly pick a minimum of 5 current jobs and record all
                         activities and time. From the initial customer call to receipt of
                         payment for the goods or services.
                    6.   Map the process – this is your current value stream map
                    7.   Categorize each activity as value added or non value added
                    8.   Define a map eliminating as many of the non value added
                         activities – now you have a first draft of the future state
1.562.860.8637
                                             ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
CPSPHERE – HELP YOU FOCUS & GROW




                                    Did we all Get it?




1.562.860.8637
                                      ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com
Next Step


            Identify                   Strategic Pricing           Align                      Adoption
            Initiative                                             Operations
                                       • Set the price which                                  • Create a consensus
                                         is easily accessible                                 • Address adoption
            • Does your product                                    • Set Target Profit
                                         to mass of buyers                                      hurdles in
              offer exceptional                                    • Come up with
                                       • Use Pricing                                            actualizing the
              Buyer utility?                                         Target Cost
                                         Corridor Tool                                          strategy
            • Use Buyer Utility                                    • Streamline Cost
                                                                                              • Balance Scorecard
              Map                                                    Innovation




                                                                                             Measuring Business Success
           Operation Excellence
                                                                                             November 1st , 2007
           October 4th , 2007
                                                                                             It is a given fact; whatever you
           Name of the game is “Profit”. Learn techniques for streamlining your operations
                                                                                             measure, it improves. Learn how to
           that results in positive bottom line for your growing business.
                                                                                             define an operating plan for your
                                                                                             business and what to measure

1.562.860.8637
                                                         ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS
info@cpsphere.com
www.cpSphere.com

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Operational Excellence

  • 1. Operational Excellence – Improving Profitability 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 2. ITS NOT STRATEGY THAT MATTERS – IT’S EXECUTION THAT COUNTS  cpSphere  Delivering Next Generation of Solutions 17215 Studebaker Rd. Suite 390 Cerritos, CA 90703 1.562.860.8637 1.562.860.8611 growth@cpSphere.com 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS www.cpSphere.com info@cpsphere.com www.cpSphere.com
  • 3. Operational Excellence Systematic management of all the processes to achieve world class performance by:  Efficient utilization of tools  Optimization of Resources  Elimination of process waste / inefficiencies 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 4. Lack of operational Excellence … Results in low profitability and cash flow issues When do you address it? 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 5. Operational Excellence Becomes a Concern when…  Cash flow starts to get a little tight – Trouble meeting payroll – Suppliers are screaming for payments – Inventory is out of control – Expenses are rising faster than revenue  Backlog starts to shrink  Opportunities are missed due to cash flow issues 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 6. Improving Profitability – Traditional Approach  CFO/Department Head is responsible to lead the cost cutting efforts Focus usually is on cutting expenses    Workforce Extend Reduce Scrutinize Reduction Payment Terms Employee Perks Purchasing 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 7. Performance Improvement: Strategic Approach Generate Ideas to measure the identify waste achieve a better current level of level of output performance Performance improvement is all about organizational change 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 8. Ideas Should be… • Effective • Efficient, and • Adhere to Market Forces 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 9. How to Generate The Ideas Value Stream Mapping   $ Visualize Your Eliminate Increase Processes Waste Profits   Value Stream Mapping is a Lean technique Lean: A business system for organizing and used to analyze the flow of materials and managing product development, operations, information currently required to bring a product suppliers, and customer relations to create or service to a consumer. precise customer value—goods and services with higher quality and fewer defects—with less human effort, less space, less capital, and less time than the traditional system of mass production. 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 10. Purpose of Value Stream Mapping  Identify processes where “Lean” techniques can be applied  Help reduce / eliminate wait time  Eliminate process waste  Reduce production cycle and processing time  Understand process linkages and dependencies  Create the basis for “Lean” implementation plan 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 11. Value Stream Mapping – Case Study 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 12. Business Case Problem Statement Solution Losing Business to competitors due to Improve lead time performance by long lead times and late deliveries. synchronizing production with customer demand. Key Requirements 1. Reduce flow time to meet customer Ideal State demand. 2. Reduce RAW, WIP and FGI levels. • On-Demand • Defect Free Measurements • 1-By-1 1. Total flow time • Lowest Cost 2. Inventory levels 3. EBIT performance. 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 13. Value Stream Map – Current Process 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 14. Team Brain Storming Session • Can Customer increase the size of the blanket order and provide us with a longer term forecast visibility? • Can we flow the demand down to the supplier with a longer term visibility? • How can we reduce wait time? • How can we reduce change over time? • Can we reduce lot size? • Can we merge production processes to reduce travel time? 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 15. Value Stream Map- Future Process 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 16. Strategy Implementation Check List • People Do Plan • Product • Systems Act Check • Processes 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 17. Next Step • How would you apply Value Stream Mapping into your Business? 1. Share the business challenge with your key staff. 2. Define business case 3. Define a high level business process 4. Define activities for each business process including wait time. 5. Randomly pick a minimum of 5 current jobs and record all activities and time. From the initial customer call to receipt of payment for the goods or services. 6. Map the process – this is your current value stream map 7. Categorize each activity as value added or non value added 8. Define a map eliminating as many of the non value added activities – now you have a first draft of the future state 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 18. CPSPHERE – HELP YOU FOCUS & GROW Did we all Get it? 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com
  • 19. Next Step Identify Strategic Pricing Align Adoption Initiative Operations • Set the price which • Create a consensus is easily accessible • Address adoption • Does your product • Set Target Profit to mass of buyers hurdles in offer exceptional • Come up with • Use Pricing actualizing the Buyer utility? Target Cost Corridor Tool strategy • Use Buyer Utility • Streamline Cost • Balance Scorecard Map Innovation Measuring Business Success Operation Excellence November 1st , 2007 October 4th , 2007 It is a given fact; whatever you Name of the game is “Profit”. Learn techniques for streamlining your operations measure, it improves. Learn how to that results in positive bottom line for your growing business. define an operating plan for your business and what to measure 1.562.860.8637 ITS NOT STRATEGY THAT MATTERS – ITS EXECUTION THAT COUNTS info@cpsphere.com www.cpSphere.com