flexibility: the profitable difference that matters

Flexibility: The Profitable Flexibility: The Profitable

Difference That MattersDifference That Matters

Laurie Harbour, PresidentLaurie Harbour, President

Harbour Results Inc. Harbour Results Inc.

April 10, 2010April 10, 2010

Economy “still” not rotating …Economy “still” not rotating …

The only constant in today’s environment is change,The only constant in today’s environment is change,

how can you turn this to your advantage?how can you turn this to your advantage?

The only constant in today’s environment is change,The only constant in today’s environment is change,

how can you turn this to your advantage?how can you turn this to your advantage?

FSEA Survey Results FSEA Survey Results

�� 61% have a clear vision and focus; but only 50% say that a business 61% have a clear vision and focus; but only 50% say that a business

plan is providing their roadmap for improvement activitiesplan is providing their roadmap for improvement activities

�� Only 5.5% had revenue growth in 2009; 50% kept EBIT the sameOnly 5.5% had revenue growth in 2009; 50% kept EBIT the same

�� 56% have seen growth in products & services offered56% have seen growth in products & services offered

�� 61% have the same number of competitors61% have the same number of competitors

�� Workforce was reduced at 56% of companiesWorkforce was reduced at 56% of companies

�� 72% have enough capability to meet demand today but only 50% 72% have enough capability to meet demand today but only 50%

have capability to meet demand over next 2 yearshave capability to meet demand over next 2 years

�� Extended or discounted payment terms increased at 56% of Extended or discounted payment terms increased at 56% of

companiescompanies

FSEA Survey Results FSEA Survey Results

�� Access to external capital has remained the same for 66% but the Access to external capital has remained the same for 66% but the rest say its harder to getrest say its harder to get

�� Maintenance and setup is not a major issue but only 22% of you Maintenance and setup is not a major issue but only 22% of you indicated the consistent use of lean operating techniquesindicated the consistent use of lean operating techniques

�� Only 38% have seen documented improvement or cost reduction Only 38% have seen documented improvement or cost reduction from continuous improvementfrom continuous improvement

�� 61% have used the last year to train and cross train people61% have used the last year to train and cross train people

What does all this mean?What does all this mean?

Flexibility is extremely critical to be successful and profitableFlexibility is extremely critical to be successful and profitable

�� 61% have used the last year to train and cross train people61% have used the last year to train and cross train people

�� Only 50% have systems to track productivity or efficiencyOnly 50% have systems to track productivity or efficiency

�� Quality has not been affected in last 12 months; but only 17% have Quality has not been affected in last 12 months; but only 17% have formally trained their people in problem solvingformally trained their people in problem solving

�� Only 17% believe that your process for determining equipment and Only 17% believe that your process for determining equipment and facilities long term is effectivefacilities long term is effective

Flexibility ImperativeFlexibility Imperative

FoilFoil SS

StampingStamping UU

EmbossingEmbossing PP

CardsCardsDD

StationeryStationeryEE

LabelsLabelsMM

Flexibility Flexibility -- “the organizational ability to adapt to changes in the “the organizational ability to adapt to changes in the

marketplace with the goal of matching supply to demand exactly.”marketplace with the goal of matching supply to demand exactly.”

Die CuttingDie Cutting PP

GluingGluing LLDesignDesign YY

LogosLogosAA

Book JacketsBook JacketsNNFoldersFoldersDD

Supplier consolidation will occur and demand will grow again . . . Supplier consolidation will occur and demand will grow again . . .

leaving the strongest companies in a position to sell value vs. capacity.leaving the strongest companies in a position to sell value vs. capacity.

Achieving ProfitabilityAchieving Profitability

through Flexibilitythrough Flexibility

��Step 1 Step 1 –– Set the “Vision” Set the “Vision” –– “Foundation”“Foundation”

��Step 2 Step 2 –– Define and Assess Your CapabilitiesDefine and Assess Your Capabilities

��Step 3 Step 3 –– Plan Your Capabilities TransformationPlan Your Capabilities Transformation��Step 3 Step 3 –– Plan Your Capabilities TransformationPlan Your Capabilities Transformation

��Step 4 Step 4 –– Focus on Differences that MatterFocus on Differences that Matter

��Step 5 Step 5 –– Lead your OrganizationLead your Organization

Flexibility is a difference that matters… focus on achieving it!Flexibility is a difference that matters… focus on achieving it!

How Do We Begin?How Do We Begin?

1.1. Begin with the end in mind Begin with the end in mind –– VISIONVISION

2.2. Key people in key spotsKey people in key spots

Step 1 – Set the “Vision” – “Foundation”

2.2. Key people in key spotsKey people in key spots

3.3. CultureCulture

People and companies tend to underperform to their People and companies tend to underperform to their

capabilities because we rush to the urgent at thecapabilities because we rush to the urgent at the

expense of the important!expense of the important!

Set the Vision for your StrategySet the Vision for your Strategy

�� What is the company vision, mission, values (VMV)?What is the company vision, mission, values (VMV)?

�� What does the company SWOT look like?What does the company SWOT look like?

�� Do we know our customer? Our competition?Do we know our customer? Our competition?

�� What does the company have to offer?What does the company have to offer?

�� What markets? What markets?

Step 1 – Set the “Vision” – “Foundation”

�� What markets? What markets?

�� What customers?What customers?

�� What is the strategy for achieving your vision?What is the strategy for achieving your vision?

�� Do you have the capabilities to enact the Visions? Do you have the capabilities to enact the Visions?

�� Internally?Internally?

�� Supply Chain?Supply Chain?

Your future success is based on strategies established today!Your future success is based on strategies established today!

From Structured Organization…From Structured Organization…

LeadershipLeadership

Step 2 – Define and Assess Your Capabilities

DesignDesign AccountingAccounting

Form must follow Function not the other way around!Form must follow Function not the other way around!

MaterialsMaterialsQualityQuality Operations

To Structured CapabilitiesTo Structured Capabilities

Planning ProductionPrepressDesign Finishing Shipping

Core CapabilitiesCore Capabilities


CapabilityCapability has two components has two components

““CompetencyCompetency” ability to do something ” ability to do something

““CapacityCapacity” the maximum that can be done. ” the maximum that can be done.

Conduct

Employee

Recruitment &

Development

Acquire

Indirect

Materials

Perform

Equipment

Maintenance

Conduct

IT

Acquisition

& Support

Perform

Financial

Analysis

& Reporting

Conduct

Continuous

Improvement

Activities

Enabling CapabilitiesEnabling Capabilities

Align Resources to CapabilitiesAlign Resources to Capabilities

Pre-Press

Example Core Process


EquipmentEquipment ITIT MethodsMethods PeoplePeople

ResourcesResourcesResourcesResources

Resources Resources must work together to deliver desired must work together to deliver desired capabilities!capabilities!

FacilitiesFacilitiesMaterialsMaterials

Evaluate FlexibilityEvaluate Flexibility

QuickQuick Optimize Lead TimeOptimize Lead Time

AgileAgile Match Supply to DemandMatch Supply to Demand


UnstableUnstable Unpredictable OutcomesUnpredictable Outcomes

StableStable Standardize CapabilitiesStandardize Capabilities

SmartSmart Eliminate WasteEliminate Waste

Evaluate both Evaluate both Maturity Maturity and and Performance Performance of the of the CapabilityCapability

Evaluate FlexibilityEvaluate Flexibility

Example Core Process

Perform Custom Plastics ProcessingPre-Press


ResourcesResourcesResourcesResources

Resource Evaluation Resource Evaluation is an input to overall is an input to overall Capability RatingCapability Rating

EquipmentEquipment ITIT MethodsMethods PeoplePeople FacilitiesFacilitiesMaterialsMaterials

Organizational FlexibilityOrganizational Flexibility

PlanningPlanning ProductionPrepressDesignDesign Finishing Shipping

Core CapabilitiesCore Capabilities


Achieving Achieving Organizational Flexibility Organizational Flexibility is no small feat!is no small feat!

Conduct Conduct

Employee Employee

Recruitment & Recruitment &

DevelopmentDevelopment

Acquire Acquire

Indirect Indirect

MaterialsMaterials

PerformPerform

Equipment Equipment

MaintenanceMaintenance

Conduct Conduct

IT IT

Acquisition Acquisition

& Support& Support

Perform Perform

Financial Financial

Analysis Analysis

& Reporting& Reporting

Conduct

Continuous

Improvement

Activities

Enabling CapabilitiesEnabling Capabilities

�� Defined focus and vision for Defined focus and vision for the futurethe future

�� Strong leadership team Strong leadership team throughout the entire throughout the entire organizationorganization

�� Discipline and Discipline and

2009 Benchmarking2009 BenchmarkingStep 2 – Define and Assess Your Capabilities

�� Discipline and Discipline and accountability accountability –– no finger no finger pointingpointing

�� Clearly defined capabilities Clearly defined capabilities required for the futurerequired for the future

�� Solid problem solving Solid problem solving cultureculture

The bestThe best--inin--class companies had these top 5 items class companies had these top 5 items

consistently rate the highest in the HRI assessment.consistently rate the highest in the HRI assessment.

The bestThe best--inin--class companies had these top 5 items class companies had these top 5 items

consistently rate the highest in the HRI assessment.consistently rate the highest in the HRI assessment.

2009 Benchmarking2009 Benchmarking

�� Lack of a long term strategic Lack of a long term strategic plan, vision and missionplan, vision and mission

�� Lack of a strong leader that Lack of a strong leader that coaches, mentors and coaches, mentors and supports the teamsupports the team

�� Fire fighting and lack of a day Fire fighting and lack of a day to day operational planto day operational plan


to day operational planto day operational plan

�� Lack of operational focus and Lack of operational focus and a culture of continuous a culture of continuous improvementimprovement

�� Poor inventory management Poor inventory management and cash flow issuesand cash flow issues

The companies that rated the lowest in the HRI assessment The companies that rated the lowest in the HRI assessment

consistently scored poorly in these top 5 items.consistently scored poorly in these top 5 items.

The companies that rated the lowest in the HRI assessment The companies that rated the lowest in the HRI assessment

consistently scored poorly in these top 5 items.consistently scored poorly in these top 5 items.

C a pabil it y P l a nt 1 P l a nt 2

Management 70 70

Sales & Marketing 65 65

Human Resources 60 69

Finance &

Administration70 70

Operations 70 75

… … …

Overall 70 70


Management 70 70



Finance &

Administration70 70

Operations 70 75

… … …

Overall 70 70

2 0 1 12 0 1 1

Flexibility TransformationFlexibility Transformation


Management 49 62



Finance &

Administration57 57

Operations 48 69

2 0 0 9C a pabil it y P l a nt 1 P l a nt 2

Management 49 62



Finance &

Administration57 57

Operations 48 69


Management 49 62



Finance &

Administration57 57

Operations 48 69

2 0 0 92 0 0 9

Step 3 – Plan Your Capabilities Transformation

Build Transformation Plans for each Build Transformation Plans for each

CoreCore and and EnablingEnabling Capabilities!Capabilities!

Build Transformation Plans for each Build Transformation Plans for each

CoreCore and and EnablingEnabling Capabilities!Capabilities!

… … …

Overall 56 63

… … …

Overall 56 63

… … …

Overall 56 63

(t)(t)Immediate Must DosImmediate Must Dos

ShortShort--term Initiativesterm Initiatives

MidMid--term Initiativesterm Initiatives

Ongoing InitiativesOngoing Initiatives

Backward ThinkingBackward Thinking

Define . . . Define . . .

Chart Back to the . . .Chart Back to the . . .

The FutureThe Future

Present!Present!

1.1. Goals in writingGoals in writing

Step 3 – Plan Your Capabilities Transformation

Things That Get Measured Get Done!Things That Get Measured Get Done!

1.1. Goals in writingGoals in writing

2.2. Written objectives to achieve a goalWritten objectives to achieve a goal

3.3. System of measurementsSystem of measurements

4.4. System of accountabilitySystem of accountability

Achieving FlexibilityAchieving FlexibilityStep 3 – Plan Your Capabilities Transformation

Pre-Press


Applying Applying Industry Best Practices Industry Best Practices to your Operations…to your Operations…

These are the These are the Differences that MatterDifferences that Matter


eKanban Work Cell Multi-Functional

Site FlowIntegration

DesignDesign

Production Production

ControlControl

Die QCO

Leverage FlexibilityLeverage FlexibilityStep 3 – Plan Your Capabilities Transformation

Companies have to move into the future Companies have to move into the future

DOING MORE WITH THE SAME!DOING MORE WITH THE SAME!

Companies have to move into the future Companies have to move into the future

DOING MORE WITH THE SAME!DOING MORE WITH THE SAME!

Flexibility ROIFlexibility ROIStep 3 – Plan Your Capabilities Transformation

More than ever in recent history, companies must More than ever in recent history, companies must

leverage working capital to fund their future investments.leverage working capital to fund their future investments.

More than ever in recent history, companies must More than ever in recent history, companies must

leverage working capital to fund their future investments.leverage working capital to fund their future investments.

(t)Immediate Must Dos

Short-term Initiatives

Mid-term Initiatives

Ongoing Initiatives

Focus on Differences That MatterFocus on Differences That Matter

�� Weed the GardenWeed the Garden

�� Continuous Improvement Continuous Improvement

ProcessProcess

�� Increase Throughput Increase Throughput ––

“More with the Same”“More with the Same”“More with the Same”“More with the Same”

�� Creative problem solvingCreative problem solving

�� Program ManagementProgram Management

�� Standardize and plan Standardize and plan

assets for the futureassets for the future

Have you painted your company into a corner?Have you painted your company into a corner?Have you painted your company into a corner?Have you painted your company into a corner?

Leadership Must LeadLeadership Must Lead

�� Set the right foundationSet the right foundation

�� Develop a strategyDevelop a strategy

�� Put the right people on thePut the right people on thebus; in the right seatsbus; in the right seats

�� Make decisions; let the teamMake decisions; let the teammake decisionsmake decisionsmake decisionsmake decisions

�� Eliminate barriers ; set the beatEliminate barriers ; set the beat

�� Focus the teamFocus the team

�� Unwavering support: provide tools, observe,Unwavering support: provide tools, observe,learn, coachlearn, coach

“Management is doing things right; “Management is doing things right;

leadership is doing the right things.” leadership is doing the right things.” Peter F. DruckerPeter F. Drucker

Achieving FlexibilityAchieving Flexibility

��Step 1 Step 1 –– Set the “Vision”Set the “Vision”

��Step 2 Step 2 –– Define and Assess Your CapabilitiesDefine and Assess Your Capabilities

��Step 3 Step 3 –– Plan Your Capabilities TransformationPlan Your Capabilities Transformation��Step 3 Step 3 –– Plan Your Capabilities TransformationPlan Your Capabilities Transformation

��Step 4 Step 4 –– Focus on Differences that MatterFocus on Differences that Matter

��Step 5 Step 5 –– Lead your OrganizationLead your Organization

Don’t over engineer your future… Don’t over engineer your future…

it’s about basic it’s about basic blockingblocking and and tacklingtackling

Thank YouThank You

Laurie Harbour, PresidentLaurie Harbour, President

Harbour Results Inc. Harbour Results Inc.

[email protected]@harbourresults.com

www.harbourresults.comwww.harbourresults.com

flexibility: the profitable difference that matters

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