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Having recognised the different forms of waste from our previous post, we would now need to analyse what forms of waste the business is accumulating. Then we would need to look at ways of setting and achieving goals to set up a leaner working environment for everyone. For this, the company would need to conduct a Productivity Needs Analysis (PNA).
What is a PNA?
A Productivity Needs Analysis examines the productivity in the organisation to ensure that everything is running satisfactory with minimum waste. The areas where there is least productivity should be eliminated and more efficient processes implemented to ensure improvements are made. These improvements should be regularly reviewed to make sure they are still proactively working to increase their productivity for the organisation. The first step in the PNA process is to recognise how the organisation will assess the performance. Does the organisation use any specific tools to do this?
It is common for businesses to collect the relevant information through important documents that show how the company is performing across the whole of the business and how the individual departments are also performing. This can help find whether the business is under performing or whether it is only a particular department. In cases where it’s a particular department, then strategies for improving productivity can be put in place. If it’s the whole organisation, this would involve a lot of work.
Sometimes things that don’t readily stand out need to be considered for measuring and people must try and think creatively, such as advertising or customer waiting times etc. In my ‘How Effective Is Your Team’ blog post, we examined the need for covering other people’s absences by training team members to cover each other in times of need. By supplying the relevant training, a staff member can temporarily wear different work hats in the business. This not only reduces customer waiting times because their queries can be answered at once, but it also ensures that there aren’t lots of random customers standing around complaining, either in person or on the phone. In a lean organisation the customers are the influencers. If they have a terrible experience, this can have a detrimental impact on the business. Therefore, all measures must be created with the customer at the forefront.
A lot of organisations may rely on measuring the financial aspects only, however it is important to take a holistic view of the situation. Sage Publications (undated) recognises that sometimes companies must work with what they’ve got. So, instead of reducing staff numbers, they should recognise the value of their staff members. If they don’t and decide to cut the staff numbers down, this can prove extremely problematic in the working environment. For example, if there are job cuts in various departments, the company must still meet the expectations of the customer without affecting the quality of the service provided to that customer (Sage Publications. undated). Training would be needed to implement new ways of working more productively with less staff.
The 5 Step PNA Process
The PNA would begin by implementing the 5 step PNA process which consists of
- Measuring relevant areas;
- Prioritise measures;
- Set Objectives;
- Processes to reach objectives (across scales of organisation);
- Deliver required outputs to reach desired productivity.
Measuring relevant areas measures the extent of the lack of productivity and how measures can be implemented to enhance productivity in that department. Once the PNA has recognised the area with which the changes need to be implemented, the organisation would need to prioritise measures and put these in place at once. On completion of this step, the company would then need to set goals of what outcomes they expect, and the processes to reach goals (across scales of organisation) would be implemented. Once these processes had been completed, the organisation would be able to deliver required outputs to reach desired productivity.
The Areas A PNA Should Cover
Common Data
A critical area to begin with is the Common Data of the business. This is where we can examine the company turnover whether it’s staff turnover or financial turnover. We can analyse what profits the business has made and what costs have been incurred etc.
Customers
Another area to examine would be our customers. We would need to look at whether there have been any complaints or positive results in a particular area. Have customers supplied any recommendations of how they think a product or service should be performed/completed? Take on board any recommendations, do they make sense? Would they work better? Have any products been returned for any reason? Is this beginning to become a common theme with a certain product? Are a lot of the products having to be scrapped or can they be fixed to meet the standards needed? When it becomes a regular occurrence, these need to be investigated as they would be resulting in a lot of waste and become a drain on financial resources. If the products are made within the organisation, a lean management technique such as the jidoka method (as described in my earlier blog post ‘The 5 Principles of Lean Management’) would prove successful in cutting customer dissatisfaction due to defects.
Delivery
Another area that would need analysing would be the delivery. Is the delivery meeting all the recommended guidance and criteria? For example, is the delivery service delivering goods on time at a place where the customer has specified. How long does the customer have to wait? Are there various options for delivery so the customer can choose to have their products earlier or on a specific day and time window? Is the delivery cost reasonable or is there any way this cost could be reduced without sacrificing on delivery quality?
Overheads
When running a business, it is always a good idea to analyse overheads as prices can change over time or sometimes what seemed like a good expense at the time, may not seem as beneficial anymore. For example, a large and expensive office in the centre of the city where everyone could see you, seemed like a good rental a couple of years ago for yourself and your colleagues to work from, however since the Covid pandemic you are now having to reanalyse this idea due to everyone preferring to work from home. Having gained all the relevant information regarding peoples wishes and the costs involved of working from a more expensive place, working from home has become the preferred choice. Therefore, the overheads regarding this office unit will be eliminated.
People
Staff members play an extremely significant role, just like customers, if there were no staff members the business wouldn’t be able to run. If your people aren’t happy at work, there would be greater staff turnover or absenteeism. When analysing this area, if it is found that a lot of people are leaving/off sick, this may point to a problem in the workplace. Is there anything that can be helped? Are the staff members getting bored? Are they still satisfied in their role? If not, it would be beneficial to introduce training with recognised qualifications at the end and possibly a pay rise as an incentive. This would help increase proficiency in the workplace. If the staff member has a learning disability, consider what the business could do to put more support in place to empower them to fulfil their role in the business. More support could include extra training (if needed), a more structured approach with unlimited access to a job coach to help fulfil their job role (Mencap. 2017).
Safety
An extremely key area to analyse would be the matter of Safety in the workplace. Accidents can play a detrimental role in the workplace and can easily be avoided with planning and delegating. The company must recognise and adhere to all legislation when it comes to health and safety in the workplace. It must also ensure that the members of staff are fully aware of their own responsibilities when it comes to safety in the workplace. This could be achieved through regular health and safety training so that everyone understands the policies and procedures. To enable this further, a Health and Safety Executive should be appointed to help manage the Health and Safety in the workplace and supply the training etc.
Costs
Costs need to be analysed regularly. Normally if a company puts their prices up for certain products, they will let you know in advance. However, this doesn’t always mean you’re prepared for it. For example, I ran a drop shipping company that specialised in Wedding products. I used the same supplier for years and built a good working rapport with them. They sent weekly emails of what was happening and their adventures of sourcing their products in person abroad. Nothing changed in those years until one day I noticed that the costs of the products had risen. I enquired and they informed me that they had sent a couple of emails with the notice in. I went back through the blog emails and there they were in small writing right at the bottom of the emails! I hadn’t noticed them as I would sometimes scroll through the emails but sometimes, I would just ignore them (I know, my own fault). Unfortunately, the costs had become too much to meet and keep my customers happy at the same time, so I had to end our business relationship with them and find another supplier. It is always good practice to read all the emails (especially the small writing) and ensure that you’re up to date and reviewing the costs every so often to ensure they still fit your business.
Setting The Objectives
When setting the objectives for a leaner business, it’s important to bear a few things in mind. For example:
Improve Quality, Cost and Delivery (QCD) – The company should either make their products to order, or if that’s not possible, then smaller quantities of the products should be produced to meet customer demands. This reduces the risk of holding so much inventory and over-production waste would be eliminated. These savings could then be passed onto the customer.
- Listen and work closely with staff members to hear their wants and needs. Examine ways to ensure that everyone has their say and feels like a valued member of the team. When a person feels valued, they are more likely to be happier in their job role and are often more determined to do an excellent job.
- Look at how flexible working can help everyone and how it can be tailored to suit them as an individual. For example, if a parent has recently split up with his/her partner and suddenly their weekend job is no good as that’s when they will be taking their turn with looking after their child/ren. They may think that they need to look for another job, but if the company runs an open-door policy, they can approach the manager and discuss flexible working. For this, a Training Needs Analysis (TNA) would need to be implemented to identify the individual needs for staff development.
- Offer mandatory and voluntary training for all staff members, for example: Mandatory should include all training in the workplace, first aid and health and safety training, staff breaks, updated changed to the manufacturing of the products and new policies and procedures too. Voluntary should be to help the staff members to progress further in the company. Voluntary training should also be offered to staff members who feel they may need further reassurance they understand the new ways of working.
- External Benchmarking would help the company to see how their competitors are doing in the business world. A question that the company would need to ask themselves is, is there a reason the company has over-produced so much stock? Has a specific trend willowed out and the customers no longer crave the product that is now sat waiting in the warehouse? What is the new trend that the customer is willing to buy? Is there anything that the company can do to try and sell the over-produced stock?
- Internal Benchmarking would help to find where the business stands in the changing trends. Is there a way to help bring the trend back by imposing exclusive offers on the products? Or would it be a case of cutting losses and using it as a learning curve to never repeat again?
- Reduced Waste – A typical company can accumulate a terrific amount of waste. By cutting this unnecessary waste, the company could soon become a productive organisation. For example, the reduction of time wasted would help production time as customers and staff members rely on people to get their jobs done on time.
- In the case of over-production, the inventory waste would need to be eliminated to create extra space and money. To do this, a Just-In-Time process could be introduced, where the company could be coordinated with customer demands. NIBUSINESS (undated) recognises that the just in time method can “improve efficiency and competitiveness…by…preventing over-production; minimizing waiting times and transport costs…”.
- Too much time waiting around is a waste of people’s time when they could be doing other parts of the job. By introducing a floor supervisor to ensure everyone is doing their job correctly and on time, this would not only avoid staff members and customers having to wait around.
Goals Are Set, Now To Implement Them
As you can tell so far in my posts, I’m a big advocate for training. Training is necessary for implementing the changes needed to achieve the goals that are going to be set. Everyone must understand their job role in meeting these objectives for a successful outcome to be achieved. Reinforce the recent changes and instructions in team meetings and any other times anyone needs clarification. Sometimes, all someone needs are a visual reminder such as images of the process or process maps.
Process Maps
To help encourage staff members to follow the new procedures, it would be helpful (along with regular training) to implement the use of process maps. These are perfect as a quick reminder of procedures in the workplace. A process map is guidance in the form of a visual representation. Many process maps come in the form of a flow chart (but they are not restricted to this) which shows the steps needed to accomplish the result. The process map may have a few different options to achieve the same results, or it may signpost to the relevant department/agency, etc. Process maps are effective methods that can be used in organisations as a visual display of the different processes that team members may need to complete, therefor they must be accessible to everyone. Because everyone is different, it may mean using different coloured paper or even perhaps a large-size font or/and braille too.
Integrated Approach
Evaluation needs to examine whether the goals that were set have been met. An integrated approach would need to be taken when evaluating the situation. How did the company progress through the changes? Were there any hiccups in the beginning that needed smoothing out? Did the process need changing slightly to incorporate changes in staff or needs? Were the changes prioritised over other things or did things stand in the way and the changes were an afterthought? (Could this have been why it failed/achieved the goals etc?). Have all the steps been met? Was more time needed? Did it cost more than was budgeted for it? How could we make it progress better next time?
Results?
Were the goals met? If not, do we understand why not? If it’s clear why they weren’t met, then we may have decided on a better plan such as: more money, more time or more staff. If it wasn’t clear as to why the plan failed, a new assessment would need to be conducted along with a better plan. If the plan succeeded however, the business could continue the lean management pathway to achieving and maintaining a leaner business.
