Imagine that you’re in a canoe on one side of a river. To get to where you want to go on the other bank, because of the current, you pick a point upstream and set off in that direction. A quarter of the way across you realize the water is moving faster than it looked, so you start to paddle harder. At the midway point the current is even stronger and you paddle even harder. But it’s soon clear that you won’t hit your target point no matter how hard you try and resign yourself to pulling out somewhere downstream.
That’s how most companies execute their annual business improvement plans. At the end of the first quarter managers realize that they haven’t made much progress toward the targets they set the previous fall, so they start to work harder on them. At the end of the second quarter they’ve gained some traction, but at the current run rate, even if they’re managing to achieve the targeted year-over-year gains, there’s no way they can make up for the slow start. So they settle for what they can get and hope to do better next year. How far off is your organization from its 2016 goals?
My TBM colleague Gary Hoover recently wrote about this challenge and urged manufacturers to start strong in January in order to hit their annual productivity improvement targets. He then detailed how to set appropriate targets by site and assign responsibility across your organization. I’m going to build on his advice and describe how a robust daily management process and leadership system helps establish both the right trajectory and supports the necessary pace of forward progress.
It all starts with having a detailed action plan for achieving your strategic objectives, then cascading that plan throughout the organization in the form of key performance measures and individual responsibilities. TBM has extensive experience helping clients with this strategy deployment process, which is sometimes called hoshin kanri or policy deployment.
Having an action plan and assigning responsibilities aren’t enough, of course. Elements of the plan have to be worked on consistently. That’s a big challenge in the daily current of running a business because something urgent always pops up, like an expedited order or a rush job that has to ship by 4:00 p.m. this afternoon. Sound familiar? It’s no wonder, when looking at their strategic plan at the end of the first quarter, that managers often find that they haven’t made much progress.
In the tug-of-war between daily demands and executing the company’s strategy—between “working in the business” and “working on the business”—strategic priorities tend to lose out. That’s why you have to have a mechanism for keeping everyone focused on what matters most, which we describe as a daily management system.
An effective daily management system provides visibility into critical metrics and issues all the way down to the shop floor. It must also help identify root causes of problems and monitor the impact of course corrections or countermeasures. In practice a daily management system can be overly dependent on the presence and discipline of key operational leaders. That’s why, in addition to maintaining visibility into progress toward strategic goals, TBM’s web-based software solution (Dploy Solutions) supports daily management reviews and countermeasure tracking in a way that distributes such responsibilities to everyone from site leaders to work cell supervisors.
At this point in time, for companies where their fiscal year and the calendar year are aligned, the annual planning process is almost over. It’s time to focus on making a strong start in January to get to where you want to go in 2017. A robust daily management system can provide the forward momentum for hitting your targets for next year, on the other side of the river and beyond.
VICE PRESIDENT, SUPPLY CHAIN & TECHNOLOGY
Ken is a 25+ year veteran of manufacturing, operational excellence and supply chain optimization. He believes that it is critical for organizations to address the challenges of strategic planning and use of big data in manufacturing. At TBM, Ken is actively leading the effort to our suite of services to include emerging technologies that improve productivity and convert complex data into information for improved decision making.