STRATEGIC BUSINESS ANALYSIS OVERVIEW

OBJECTIVES

The STRATEGIC BUSINESS ANALYSIS (SBA) is designed to assess the applicability and potential benefits of integrating the principles of continuous improvement into your company's manufacturing environment. In addition to identifying short-term actions and benefits, the SBA is also conducted with a view to the long-term potential of the continuous process of improvement embodied in the Synchronous Management philosophy.


METHODOLOGY

Synchronous Management's approach is based on an understanding of your company's key strategic business issues, management policies, and the major constraints to increased profitability. Discernible cause and effect relationships exist among these constraints, policies and business issues. For example, long setups may lead to a policy of high efficiency, which in turn leads to large batches, wandering bottlenecks, shortages, expediting, and increases in total costs. Similarly, a policy of high resource utilization will lead to excess work-in-process, long production lead-times, inaccurate forecasts, poor on-time delivery, and loss of sales. Once an understanding of these and other cause/effect relationships is achieved, changes in policies, procedures, and performance measures can be enacted which will enable you either to alleviate or to manage your constraints to resolve the business issues. This understanding is accomplished in several steps.


ORGANIZATION

The first half of the first day is generally used to schedule and organize our efforts for the SBA. A meeting is held with key management personnel to identify the individuals we will be talking to, and to schedule the WORKSHOP and INTERVIEWS. In addition, key personnel are selected to assist in the VALUE STREAM ANALYSIS, and in the arrangement of logistics such as work space and support for our representative.


WORKSHOP

The Synchronous Management approach is not only synergistic with current productivity improvement efforts; it also provides a unique global perspective with which those efforts can be focused for maximum improvement. With that in mind, your people involved in the SBA are exposed to the principles of synchronous manufacturing beforehand. An excellent introduction is Dr. Eli Goldratt's book THE GOAL: EXCELLENCE IN MANUFACTURING. The individual insight and ownership achieved through reading THE GOAL are then brought to consensus in order to ensure integrated and focused action. To accomplish this, we begin the SBA with a four-hour LEAN OVERVIEW workshop, which explores some of the dynamics of your manufacturing environment within the continuous improvement perspective. In this way, understanding is enhanced of the relevance of the data requested and the recommendations presented at the end of the SBA.


VALUE STREAM ANALYSIS

On the logistical level, Synchronous Management seeks to facilitate the flow of goods through the manufacturing process, to the customer, with minimal inventory levels and waste (operating expense). Therefore, impediments to that flow and causes of waste must be identified. In a four to six hour session with your key Manufacturing and/or Materials people, we map out a globe value stream map, identifying the major material and information flows. If multiple product lines, with significantly different material and information flows, they are considered separately. This unique integration of value stream maping, together with the information gathered in the INTERVIEWS, not only assists in identifying logistical constraints (bottlenecks), but also provides insight into potentially more costly managerial and behavioral constraints.


INTERVIEWS

In order to obtain management's perspective on the major issues in your business, INTERVIEWS are held with key members of the management team. The functions interviewed, the sequence, and the types of information sought are usually as follows:

Manufacturing/Materials (during FLOW ANALYSIS, above):
Overview of organization and responsibilities.
Planning and control systems and procedures.
Batch-sizing, setup and scheduling policies.
Key performance measures.
Quality control issues.
Chief Executive Officer
Overview of business and trends.
Key performance measures and policies.
Long-term strategies and future events.
Labor environment
Marketing
Overview of markets and distribution.
Customers, competition, and market share.
Key marketing, sales and customer service issues.
Potential for enhancement of market position.
Finance
Cost of sales distribution.
Inventory value by category and location.
Financial controls and measures.
Capital investment plans.
Engineering
Organization and responsibilities.
Condition of routings and bills of materials.
Engineering change notice volume and procedures.

The above information relative to the interview process is intended to be representative only. If appropriate, other personnel are included (or interviewed separately), and modifications are made to the types of information sought. The INTERVIEWS usually run from one to two hours each, and are intended to be an informal exchange and verification of information.


SHOP FLOOR TOUR

A tour of the manufacturing facility is taken, preferably with the guidance of your flow experts. The intent is to:

The SHOP FLOOR TOUR usually takes from two to four hours, and may include areas such as Warehousing, Scheduling, and other support departments.


BUSINESS ANALYSIS

At this point, we generally have enough information to conduct our ANALYSIS. We begin with a characterization of your environment into one of several generic types, based on your material and information flos. By combining this with the information gathered during the INTERVIEWS and SHOP FLOOR TOUR, we are then able to discern the cause-effect relationships among the constraints and policies we have identified and the business issues most important to your company. Changes in policies, procedures, and performance measures are simulated to estimate their financial impacts. Finally, a presentation is prepared demonstrating the connections among our assumptions, the data gathered, our recommendations, and the ultimate financial benefits. In most cases, the ANALYSIS is done on-site in eight to twelve working hours. During that time, additional data may be requested to fill in any gaps.


VERIFICATION

In order to maintain consensus and to promote ownership among the management team, we have found that it is helpful to verify our assumptions and findings with the interviewees prior to our FINAL PRESENTATION. Relatively brief discussion is usually required (fifteen to thirty minutes each), and any necessary modifications are made to the FINAL PRESENTATION. In this way, we are able to avoid any major surprises or disagreements of fact during the FINAL PRESENTATION, and to make the most effective use of your time.


FINAL PRESENTATION

In a session of two to four hours at the end of the SBA, Synchronous Management presents to you and your management team our findings and recommendations, as well as anticipated financial benefits. The presentation consists of:

It should be noted that the initial ORGANIZATION and the FINAL PRESENTATION are the only times during the SBA that everyone involved must be present at the same time. We do recommend that all of the people involved in the SBA attend both sessions. At your request, Synchronous Management will prepare, subsequent to the SBA, a proposal outlining action plans and any appropriate ongoing education and/or support to assist you in your continuing process of improvement.