|
Carpédia has developed a comprehensive implementation based
methodology* that measures and links operating improvements to our
clients' monthly financial P&L statements. The methodology is
based on a transfer of ownership and technology through five distinct
phases:
1. Target
2. Develop
3. Focus
4. Install
5. Sustain
The process generally takes 4-6 months leading into the sustainability
phase where we will typically support our clients for a period of
1-2 years.
* The methodology was recently selected by The Ritz-Carlton
Hotel Company to be their worldwide standard for performance improvement.
1. Target
The Target phase starts with the initial Opportunity analysis and
is driven by a careful understanding of the key profit drivers of
the functional area. Important revenue or cost elements are sub-divided
into associated volumes and rate and historical performance is assessed.
The resulting Profit Driver Model is used to help determine specific
improvement objectives in terms of financial and service performance.
This visual model is also used to visually explain to managers how
their day-to-day work impacts the company’s financial performance.
It is also used to develop an evaluation system that tracks operating
results and links them directly to the company’s financial
statements. The key output of this phase is a document we call The
Results Plan. This document articulates specifically where the results
will come from, how they will be achieved, and how they will be
measured.
2. Develop
The second phase overlaps with the first phase and provides some
of the base information required to develop The Results plan. This
phase is where process, system and behavior changes are developed.
This is done by first analyzing the current state, then identifying
recurrent problems and performance gaps and finally developing new
methods that will result in the desired improvement. The steps required
to develop an area include:
- Map key processes on a wall chart and
take management and employees through the process so that they
can identify recurrent operating problems.
- Observe key activities to assess value
added and non-value added resource use.
- Identify current and potential area capacities
in order to schedule work realistically against output requirements.
- Redefine key processes and systems to
optimize resource productivity and to minimize process and workload
variability.
- Eliminate non-value activities through
workflow, methods and system improvements.
- Eliminate or reduce unnecessary or duplicated
operations.
- Level-out large variances in output to
improve forecasting and scheduling predictability.
- Balance the work loading of inter-related
operations to create a smoother flow or work.
- Establish new planning guidelines to
more accurately relate the work to be done with time requirements.
- Establish the most effective means to
forecast demand and integrate with day-to-day work scheduling.
- Refine or develop the planning tools
required to translate forecast demand into resource requirements
(material, labor, equipment, capital).
- Model the time of managers, in order
to get better utilization of their experience and time allocation.
3. Focus
The third phase is named after a specific meeting, called a Focus
Meeting, which is where the area managers present the current state,
the method, system and behavior changes planned, and the resulting
performance improvement expected. The Focus Meeting helps clearly
reinforce the specific roles and responsibilities of management
and employees. It’s called a focus meeting because it serves
the purpose of forcing the project team and operating group to focus
in on the vital few elements and changes that will generate the
majority of the benefit.
This is also the phase where managers and employees need to be properly
trained and prepared for the changes that are to be put into place.
A series of management training workshops are required to train
the managers in the techniques of planning, assigning and follow-up
of work, and how to spot unsatisfactory conditions and take corrective
action. Some of the specific skills managers often need to be trained
in are how to:
- How to recognize lost time.
- How to solve operating problems.
- How to use the management system.
- Coach employees to improve performance.
4. Install
The installation phase is where process, system and behavior changes
are physically put into place. Often this is done over a period
of time leading up to installation through trial runs called prototypes.
The key to this phase is that managers must genuinely adopt the
new methods. They can’t pay it lip service and run the old
systems in parallel. To improve profitability installations almost
always mean doing more with fewer resources so operating problems
become more obvious and there is less of a buffer to cushion the
impact. Effective installation takes courage and commitment because
unforeseen problems inevitably crop up and it is easy to throw in
the towel and go back to the way things were.
Again it is vital that the issues are viewed in terms of process,
system and behavior. Changes in each area must reinforce the other
areas and it is the cumulative effect that will bring about the
planned results.
5. Sustain
The sustainability phase can last from 6 months to 18 months depending
on the extent of the changes and the stability of the work force.
All changes need to be documented into procedures (ISO procedures
work well for this if they already exist). This phase consciously
recognizes that there is a natural tendency to want to revert back
to how things used to work. Familiar patterns of behavior are difficult
to change. It is only through compliance to the new way of doing
things and confidence from the resulting success that the new behaviors
will eventually become habits. Periodic reviews are done to make
sure that changes stick and to ensure managers move from pure compliance,
to understanding, to eventually full ownership of the changes.
|
