John Walters of 1-2-1 Business Consulting is back with some great points about the scheduling discipline which is key to success, but often difficult for many entrepreneurs.
Every business and all individuals undertake scheduling in some form. It could range from creating a list of calls to make, things to do, through to more sophisticated demand/capacity planning.
Manufacturing businesses usually schedule: raw material requirements in order to manage the flow of materials to production, production scheduling to manage the flow of work, and shipping & dispatch to ensure that customer orders leave the facility in sufficient time to achieve on-time delivery to the Customer.
The point being that all businesses need to be able to schedule effectively if they are to be successful.
I’m sure that you can appreciate that as the number of variables: products, production orders, customers, and the number of people involved in the scheduling process increases, so does the complexity. It is for this reason that businesses spend considerable time constructing rules around scheduling in order to maximize efficiency and reduce waste.
Think about a company that uses expensive equipment and pigments in their manufacturing process. They want to maximize the available productive time of the equipment and they obviously want to avoid cross contamination (the effect of colors being mixed), and so they take great care as to how they schedule their production orders. It takes far longer for them to clean the machinery when they move from dark to light colors and so they try to schedule orders progressively from Natural to Black and then back to Natural to restart the cycle.
As you can see from the above scheduling requires discipline and order, and so companies develop scheduling guidelines/rules, and often try to automate the process as much as possible. Automation reduces the risk that Mary will interpret and apply the rules in a different way to Nancy, and so variation, a route cause of production inefficiency, is eliminated, but how do you build some flexibility into the schedule to accommodate the changes that will undoubtedly follow?
One technique is to build in a time slot into your schedule, but leave it unallocated and in that way you give yourself some flexibility to handle that last minute rush order that comes from your customer that is notoriously poor at forecasting his own demand. Everybody has at least one of these customers.
Spending some time thinking about your scheduling processes will often lead to significant improvement in your Operations. It can be amazing to see how creative people can get when they are being squeezed on capacity.
Imagine that you have a four Man work crew and that the individual tasks take 2 hours each. The total elapsed time if the jobs are done sequentially is 8 hours, but what if you could cross train the crew and that you could complete all the jobs in parallel, your elapsed time would only be 2 Hrs. Think of the potential impact on your scheduling and capacity.
I hope that you can see that scheduling processes are extremely important to all businesses as they can have a profound effect on results of the business. Take a moment to reflect on how efficient your scheduling processes are and take contact with “121” if you need assistance to evaluate and then improve your scheduling processes. We have the experience and we are there for you.
Find more scheduling and efficiency strategies in OED's Online Community, and via special events located at OEDGlobal.org.
Fostering the entrepreneurial spirit!
Monday, March 28, 2011
Wednesday, March 23, 2011
Strong Financial Management – A Key to SURVIVAL
There is one simple reason to understand and observe monetary planning in your business - to avoid failure.
Eight of ten new businesses fail primarily because of the lack of good fiscal planning.
Financial planning affects how and on what terms you will be able to attract the funding required to establish, maintain, and expand your business. Financial planning determines the raw materials you can afford to buy, the products you will be able to produce, and whether or not you will be able to market them efficiently.
It affects the human and physical resources you will be able to acquire to operate your business. It will be a major determinant of whether or not you will be able to make your hard work profitable.
A clearly conceived, well documented Fiscal plan, establishing goals and including the use of Budgets to ensure monetary control, will demonstrate not only that you know what you want to do, but that you know how to do it.
Eight of ten new businesses fail primarily because of the lack of good fiscal planning.
Financial planning affects how and on what terms you will be able to attract the funding required to establish, maintain, and expand your business. Financial planning determines the raw materials you can afford to buy, the products you will be able to produce, and whether or not you will be able to market them efficiently.
It affects the human and physical resources you will be able to acquire to operate your business. It will be a major determinant of whether or not you will be able to make your hard work profitable.
A clearly conceived, well documented Fiscal plan, establishing goals and including the use of Budgets to ensure monetary control, will demonstrate not only that you know what you want to do, but that you know how to do it.
Wednesday, March 16, 2011
SBA opens its review of small business regulations
GovernmentExecutive.com has run content this week regarding SBA feedback opportunities:
Are you a small business owner frustrated with outdated and often cumbersome regulations from the Small Business Administration? Then SBA wants to hear your suggestions on whether those rules should be streamlined, expanded, or possibly withdrawn altogether.
On Monday, SBA published a notice in the Federal Register asking the public to weigh in on the impact of its regulations and the best way to improve them.
"The primary objectives of this review are to make SBA's regulatory program more cost-effective and less burdensome on participants in the agency's programs while continuing to promote economic growth, innovation and job creation," the notice said. "SBA seeks public input on the design of a plan to use for periodic retrospective review of its regulations and an initial list of the rules to be reviewed under the plan."
The proposal comes on the heels of President Obama's January executive order calling for a governmentwide review of all federal regulations. The order said inefficient, out-of-date and burdensome regulations could be repealed if they were stifling private sector job growth.
The order instructs agencies to develop a plan for reviewing their regulations by mid-May. The plan, along with any supporting data, would then be made public, Obama wrote.
While the SBA notice did not cite specific regulations, it did say the retrospective review would focus on small business investment companies, surety bond guarantee, business loans, disaster loans, government contracting and Historically Underutilized Business Zones.
SBA recently concluded an exhaustive review of its 8(a) Business Development Program and now is examining size regulations. Neither will be subject to the new review.
The agency wants the public to comment not only on specific regulations, but also on how it should devise its preliminary plan "with a defined method and schedule for identifying certain significant rules that may be obsolete, unnecessary, unjustified, excessively burdensome, or counterproductive." Comments also should address how SBA can best evaluate and analyze its regulations and obtain accurate and objective cost data.
Commenters should consider the economic burden the regulation imposes on small business entities and whether the rule is duplicative or overlapping; paperwork could be reduced by allowing electronic submissions; the regulation has been discredited by new scientific information; and the issue could be better handled by trade organizations without federal involvement.
"Comments should focus on regulations that have demonstrated deficiencies," the notice said. "Comments that rehash debates over recently issued rules will be less useful. The public should focus on rule changes that will achieve a broad public impact, rather than an individual, personal, or corporate benefit."
Sen. Olympia Snowe, R-Maine, ranking member of the Senate Committee on Small Business and Entrepreneurship, encouraged the public to participate in the review.
"Excessive regulations are suffocating the entrepreneurial spirit of America's almost 30 million small businesses and, regrettably, small firms with fewer than 20 employees bear a disproportionate burden of complying with these rules," Snowe said in a statement. "To spur job creation and economic growth, it is incumbent upon every level of government to simultaneously pursue sound incentives and eliminate the laws and policies already on the books that are proven impediments to these objectives."
Read the complete post on GovernmentExecutive.com.
Are you a small business owner frustrated with outdated and often cumbersome regulations from the Small Business Administration? Then SBA wants to hear your suggestions on whether those rules should be streamlined, expanded, or possibly withdrawn altogether.
On Monday, SBA published a notice in the Federal Register asking the public to weigh in on the impact of its regulations and the best way to improve them.
"The primary objectives of this review are to make SBA's regulatory program more cost-effective and less burdensome on participants in the agency's programs while continuing to promote economic growth, innovation and job creation," the notice said. "SBA seeks public input on the design of a plan to use for periodic retrospective review of its regulations and an initial list of the rules to be reviewed under the plan."
The proposal comes on the heels of President Obama's January executive order calling for a governmentwide review of all federal regulations. The order said inefficient, out-of-date and burdensome regulations could be repealed if they were stifling private sector job growth.
The order instructs agencies to develop a plan for reviewing their regulations by mid-May. The plan, along with any supporting data, would then be made public, Obama wrote.
While the SBA notice did not cite specific regulations, it did say the retrospective review would focus on small business investment companies, surety bond guarantee, business loans, disaster loans, government contracting and Historically Underutilized Business Zones.
SBA recently concluded an exhaustive review of its 8(a) Business Development Program and now is examining size regulations. Neither will be subject to the new review.
The agency wants the public to comment not only on specific regulations, but also on how it should devise its preliminary plan "with a defined method and schedule for identifying certain significant rules that may be obsolete, unnecessary, unjustified, excessively burdensome, or counterproductive." Comments also should address how SBA can best evaluate and analyze its regulations and obtain accurate and objective cost data.
Commenters should consider the economic burden the regulation imposes on small business entities and whether the rule is duplicative or overlapping; paperwork could be reduced by allowing electronic submissions; the regulation has been discredited by new scientific information; and the issue could be better handled by trade organizations without federal involvement.
"Comments should focus on regulations that have demonstrated deficiencies," the notice said. "Comments that rehash debates over recently issued rules will be less useful. The public should focus on rule changes that will achieve a broad public impact, rather than an individual, personal, or corporate benefit."
Sen. Olympia Snowe, R-Maine, ranking member of the Senate Committee on Small Business and Entrepreneurship, encouraged the public to participate in the review.
"Excessive regulations are suffocating the entrepreneurial spirit of America's almost 30 million small businesses and, regrettably, small firms with fewer than 20 employees bear a disproportionate burden of complying with these rules," Snowe said in a statement. "To spur job creation and economic growth, it is incumbent upon every level of government to simultaneously pursue sound incentives and eliminate the laws and policies already on the books that are proven impediments to these objectives."
Read the complete post on GovernmentExecutive.com.
Thursday, March 10, 2011
Congress To Scale Back New 1099 Reporting Requirements?
A March 9th story on AccountingWeb.com highlighted new reporting requirements coming for 1099’s to vendors. Under the new guidelines passed last year by Congress, ALL vendors receiving $600 or more of your business will need a 1099. This covers EVERYTHING down to office supplies.
Put into place as a better cross check to income reporting, is this a case of the remedy being far worse than the issue? Do you think requiring so many new 1099 forms in circulation is really the answer to income hiding? Or do you think adjustments to tax codes would simplify everyone’s life, therefore making income reporting more accurate?
The full article including background on when the new code came into being can be found on AccountingWeb. We’d love to hear your feedback below or LinkedIn group discussion!
Put into place as a better cross check to income reporting, is this a case of the remedy being far worse than the issue? Do you think requiring so many new 1099 forms in circulation is really the answer to income hiding? Or do you think adjustments to tax codes would simplify everyone’s life, therefore making income reporting more accurate?
The full article including background on when the new code came into being can be found on AccountingWeb. We’d love to hear your feedback below or LinkedIn group discussion!
Monday, March 7, 2011
Inventory Management Part II: Improving Your System
INVENTORY MANAGEMENT SYSTEMS: How to Improve your Inventory Management Program
contributed by Bill Donnelly, Bac2Profit LLC
Our “vision” of inventory is somewhat different than the norm. We see inventory as stacks of crisp $100.00 bills neatly stacked & stretch wrapped on a pallet. After all it is money; you paid for the product, you pay to store it, you pay to handle it and it depreciates in value. Don’t you want to know where your money is? And what’s happening to it?
We realize change is not easy; developing a plan, documenting it and training employees takes time and can be frustrating. But it is a very attractive option to the profit-eroding alternative! When putting together a winning formula you have to build from the ground up and that process starts with the basics…efficient material flow paths, organized storage and process mapping. Most inventory inefficiency is created by smaller underlying deficiencies, either in the physical layout or information flow. It’s important when implementing a new Inventory Management plan, or revamping an old one, to start simple and stick to the basics.
Most people think of automated data transactions like bar coding & scanning when thinking of upgrading warehouse/inventory control operations, and yes they are very effective tools for recording inventory transactions. However, most ignore “The Basics” and set themselves up for failure even if scanning is implemented. Improving the performance of your Inventory Management System can be simpler, and far less expensive, than you think.
Start by mapping the physical movement of product from pre-receipt to shipping confirmation
Review the corresponding documentation
Determine appropriate data collection points based on physical movement
Initiate a continuous cycle counting program
Have a storage location for all items and all items stored in the appropriate location (sometimes easier said than done, but try it, it works!)
Review the “flow” of information, where it goes, to who & why & what is done with it
Review inventory reports for timeliness and accuracy
Streamline the flow of information
In business and in life, attitude is everything. Sustaining inventory accuracy should be an integral aspect of your business. It is a mentality that must be promoted from the top and be instilled through every employee.
Additionally, when developing your Inventory Management plan of action, you should seize opportunities to eliminate, or at least reduce, the potential for errors. Taking into account all the scenarios is challenging, so involve key internal personnel whenever possible and utilize external resources to supplement your internal Team when necessary.
Once your plan of action is defined, it must be documented and effectively communicated to all employees. Training is an essential step to promoting inventory control, quality assurance, enhanced productivity, improved safety and reducing overall inventory carrying costs.
Documented studies clearly emphasize that employee training results in better procedure execution, reduced stress, and a clearer understanding of the corporate vision. Proper identification of products and their respective storage locations will dramatically decrease the labor time required to find items, pick orders and perform put-away functions.
Another simple way to improve Inventory Management is to maintain good housekeeping. A clean work environment will reduce “touch labor”, allow quick access to the desired SKU and will increase productivity. The elimination of “reconnaissance missions” (looking for the desired product that is somewhere?? in the "wherehouse") will save valuable time, most likely overtime dollars, and improve Customer Service. Most importantly, aisles free of impediments and temporarily stored product will allow unobstructed access to your inventory. It’s similar to how your car always runs better after it’s washed, but good housekeeping always increases the amount of space in your warehouse.
An effective Inventory Management System starts with an efficient storage system; one designed to support order fulfillment and Customer requirements. It is also important to remember the correlation of Inventory Management to your Supply Chain initiatives and the overall impact on your business objectives relative to Sales & Marketing.
Start with the basics and have a plan to work yourself up to real-time inventory transaction reporting. Accurate Inventory Management requires effort, time, discipline and attention to detail, but the Payback can be huge!
Note - I wrote this as a White Paper for a client a few years ago and it still holds true.
Thanks to Bill of Bac2Profit for Parts I & II on this topic. Check out his blog at: bac2profit.blogspot.com and OED's Community at http://www.oedmembers.org/ for more operational tips and insights.
contributed by Bill Donnelly, Bac2Profit LLC
Our “vision” of inventory is somewhat different than the norm. We see inventory as stacks of crisp $100.00 bills neatly stacked & stretch wrapped on a pallet. After all it is money; you paid for the product, you pay to store it, you pay to handle it and it depreciates in value. Don’t you want to know where your money is? And what’s happening to it?
We realize change is not easy; developing a plan, documenting it and training employees takes time and can be frustrating. But it is a very attractive option to the profit-eroding alternative! When putting together a winning formula you have to build from the ground up and that process starts with the basics…efficient material flow paths, organized storage and process mapping. Most inventory inefficiency is created by smaller underlying deficiencies, either in the physical layout or information flow. It’s important when implementing a new Inventory Management plan, or revamping an old one, to start simple and stick to the basics.
Most people think of automated data transactions like bar coding & scanning when thinking of upgrading warehouse/inventory control operations, and yes they are very effective tools for recording inventory transactions. However, most ignore “The Basics” and set themselves up for failure even if scanning is implemented. Improving the performance of your Inventory Management System can be simpler, and far less expensive, than you think.
Start by mapping the physical movement of product from pre-receipt to shipping confirmation
Review the corresponding documentation
Determine appropriate data collection points based on physical movement
Initiate a continuous cycle counting program
Have a storage location for all items and all items stored in the appropriate location (sometimes easier said than done, but try it, it works!)
Review the “flow” of information, where it goes, to who & why & what is done with it
Review inventory reports for timeliness and accuracy
Streamline the flow of information
In business and in life, attitude is everything. Sustaining inventory accuracy should be an integral aspect of your business. It is a mentality that must be promoted from the top and be instilled through every employee.
Additionally, when developing your Inventory Management plan of action, you should seize opportunities to eliminate, or at least reduce, the potential for errors. Taking into account all the scenarios is challenging, so involve key internal personnel whenever possible and utilize external resources to supplement your internal Team when necessary.
Once your plan of action is defined, it must be documented and effectively communicated to all employees. Training is an essential step to promoting inventory control, quality assurance, enhanced productivity, improved safety and reducing overall inventory carrying costs.
Documented studies clearly emphasize that employee training results in better procedure execution, reduced stress, and a clearer understanding of the corporate vision. Proper identification of products and their respective storage locations will dramatically decrease the labor time required to find items, pick orders and perform put-away functions.
Another simple way to improve Inventory Management is to maintain good housekeeping. A clean work environment will reduce “touch labor”, allow quick access to the desired SKU and will increase productivity. The elimination of “reconnaissance missions” (looking for the desired product that is somewhere?? in the "wherehouse") will save valuable time, most likely overtime dollars, and improve Customer Service. Most importantly, aisles free of impediments and temporarily stored product will allow unobstructed access to your inventory. It’s similar to how your car always runs better after it’s washed, but good housekeeping always increases the amount of space in your warehouse.
An effective Inventory Management System starts with an efficient storage system; one designed to support order fulfillment and Customer requirements. It is also important to remember the correlation of Inventory Management to your Supply Chain initiatives and the overall impact on your business objectives relative to Sales & Marketing.
Start with the basics and have a plan to work yourself up to real-time inventory transaction reporting. Accurate Inventory Management requires effort, time, discipline and attention to detail, but the Payback can be huge!
Note - I wrote this as a White Paper for a client a few years ago and it still holds true.
Thanks to Bill of Bac2Profit for Parts I & II on this topic. Check out his blog at: bac2profit.blogspot.com and OED's Community at http://www.oedmembers.org/ for more operational tips and insights.
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