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Rajesh Chakrabarty

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    Rajesh Chakrabarty
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    Goli Vada Pav Pvt. Ltd.
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    National Head-New Business Initiatives & Training

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  1. The North Star has always been a source of direction for travelers during the dark night- it always remains still and points towards the north. This celestial design depicts a symbolic beacon of hope and direction for many when there is darkness and many distractions all around. It is a landmark that helps to determine the direction or single path towards a defined purposeful destination. On similar lines, in the business environment, A North Star Metric (NSM) is the One Single Measurement that most indicatively extrapolates the long term success of the business or Organization. This metric is the one single metric that keeps the top management engaged towards strategic direction for the business/organization. The said concept that emerged from Silicon Valley is best applied by organizations that believe in investing in long-term sustainable growth. To qualify as a Direction provider –a North Star Metric(NSM), must; 1) Lead to revenue – Core purpose, but cannot be a North Star Metric by itself, as Revenue is the price that the customer pays for the value it perceives in the product /service, whereas NSM is the value itself 2) Reflect Customer Value – The value the customer perceives in the product/services, drives their long-term engagement 3) Be a numerical measure and reflection of progress of the organization – Only that which is measurable can be improved 4) Indicate the customer’s success or need fulfilment – The customer must come back to you for it for a long term basis 5) Be time bound- so that you can compare periodically and clearly see if there is growth 6) Grow Periodically- growth measured in a fixed frequency provides a trend and enables a feedback mechanism for due analysis and preventive & corrective action 7) Be in total control of the organization- There should not be any external influence as it should be ONLY the effect of the bond between the organization and the customer. Thus, any modification in operations is easier and controllable. 8) Involve all levels of work – everyone (People/department/function) must feel involved and their performance metrics should contribute to the NSM. The Metric with the above said properties is employed as a focus by an organization for growth. It gives direction to the organization’s long term growth. Most matured organizations draft a NSM, keeping the above pointers in mind. Having said that, an organization or an SBU should ideally have only one NSM so that there is a single focus for all teams within the organization/ SBU. Some well-known, Global Examples of NSM which are commonly used by us, as customers; - Facebook- “Monthly Active Users (MAU)” – A versatile platform like Facebook has a very specific NSM that allows them to check growth on a monthly basis and take corrective measures wherever required, to maintain the growth trends. - Amazon- “Number of purchases per month” – Absolute logical NSM covering Customer engagement and revenue - LinkedIn – “Monthly Active Users (MAU)” – Similar to Facebook. - Uber- “Rides per week” – Being a two sided platform, both the buyers and the sellers must derive value from the platform - WhatsApp- “Messages sent” – absolute indicator of usage and value received by user All the above mentioned successful organizations have great customer base and is only growing because of their focus on their well thought of NSM. They have laid down the foundation for the belief on how and why the NSM helps to generate long term value for customers. - Enables to draft a North Star Strategy (NSS)– It is basically a way in which the organization is focussed on the NSM in all its strategic planning. The NSS quantifies the value that is provided to the customers. This helps in aligning all teams in the organization, as well as all other stakeholders and the use of all strategic assets - Customer Focus – The organization is committed to add value for the customer and hence all processes and activities across the organization are intended for customer retention. - Focus Across the Organization- When all performance metrics at the different levels of the organisation are linked to the NSM, the Top-Down and Bottom-Up approach both work together efficiently and effectively. Fantastic grounds for Kaizen and continuous improvement. Benefits of business excellence is experienced by all stakeholders. - Clarity – Every stakeholder understands how the organization and their effort & performance stands at a single glance The crux of the concept is that if the organization consistently provides more value to the customer, the growth of the company is guaranteed ,as then, the customer will be loyal and buy more and refer the organization’s product or services which enables business growth. Given that the NSM is a direct indication of the focus on providing value to the customer, the growth of business is directly proportional to the growth of the NSM
  2. Standardized Work is a method that was established by TOYOTA as one of the key mechanism of the Just-In- Time production system. It is a methodical approach to determine and document the work element sequence and process for any operation. The objective is to have a detailed “readily available” communication for the operator/worker to know how the job should be performed for best results consistently. A good amount of effort is put in to define a comprehensive flow of the standardized work to ensure that every operator/worker executes tasks by following the defined set of rules and processes. This helps to improve the speed of the process, reduce error, wastes & risks and also simplifies problem- solving, if any. The concept of “Kata” is best realized when there is standardized work. The method that TOYOTA established for their production unit, consisted of Three Elements; - Takt Time - Working Sequence - Standard In- Process Stock This was used in all workplace as a the documented “Standardized Work Chart”. The sample template of the Standardized work chart is available on net. ( https://econoshift.com/en/standardized-work-chart-2/) Most matured organizations follow a customized chart, which is appropriate for their type of business The standardized Work Chart indicates the operator movement/script and material location with the application of the 5S concept, in relation to the machine /Equipment used in the operation and overall process layout. How to implement the Standardized work? 1) Identify and define the most efficient and effective practices and the time required for each task/process to the right level of detail. 2) Documenting the above with text and images wherever possible and relevant 3) Keeping the said document available at the GEMBA. To get the above executed a Gemba walk helps to denote the as is process, understand the value stream and the problems and scope for improvement and follow the steps in order: 1) Determine on working Lean- Focus and prioritize 2) Develop the best – known way of working to meet objective of standardized work 3) Visualize the Standard 4) Communicate and train – The new standard needs to be propagated 5) Schedule follow ups on adherence and performance 6) Introduce a process for improvement A very commonly experienced and observable standardized work is seen at the order taking/service counters of the MNC Fast food chains. You will notice all the 3 elements. - The work place is arranged systematically (5S concept) for easy and quick access for required materials like trays, glasses lids straws etc. Least Movement for the Worker - The queue management is organized for the convenience of the customers and the order taker as well - The order takers follow defined steps / Working Sequence to take the orders- # Defined Step Purpose 1 Smile and greet the customer set the process on a pleasant note 2 Listen to the customer's order understand the customer's need 3 Upsell/Cross Sell - Recommend relevant Promotions Derive better wallet share 4 Repeat and Confirm Order avoid any error/ Cancellation/ wastage 5 Transaction of payment as per defined process to avoid short changing or any scope of less payment 6 provide the estimate waiting time for the order keeps the customer informed about waiting time to avoid any anxiety of waiting 7 present the order over the counter confirms that the customer has got the complete order 8 Thank the customer for business and request for repeat business Makes the customer feel special and wanted During this whole transaction, you will notice that there is a level of consistency or uniformity, followed by all the order takers at the counter, to most of the practices or operations in the given environment. In the matured organizations with chains of such operation centers (Outlets), you will notice that the operating environment is also similar in all the outlets. The said process is documented and kept handy for training and audits and reviews. The process is also timed in different day parts to arrive at the Takt Time There are regular reviews of this process done by the managers of the outlets to study the efficiency and effectiveness of the process and also the training impact on the individuals. These checkpoints also help to review the process for improvement and more value. For example, the waiting time of the customer can be made more relaxing by providing free samples of new products, the menu boards can be made more interactive and educative through running videos. The Benefits of Standardization when used in processes for Manufacturing and Service - Reduce wastages – reduce cost - Improve Speed - Improves the Management and design - Encourages innovation and improvement as it provides structured methods and reliable data that saves time in innovation process - Makes it Easier to train staff across different locations as the practice remains same - Helps to replicate and expand - Performance measurement also becomes easy- easier to motivate personnel Generally Accepted Accounting Principles (GAAP) is one of the global examples of standardization, to which all companies listed on US stock exchange must adhere to. The benefits are definitely evident!!
  3. It is indeed a common belief that recovering a customer after delivering a poor experience results in better loyalty than, if the customer is provided a perfect experience the first time. This concept is called The Service Recovery Paradox(SRP). I strongly believe is only an assumption. I do not believe that in these modern times customers appreciate any imperfection. They spend money very wisely and choose a brand/company, out of many other options, based on the perceived value. Gone are those days when customers would appreciate the post-sale services to “correct things” and bond better with the company as long term loyal customers. In earlier days this concept would provide some comfort to the companies which made a lot of errors/ defects in the product and were happy to spend an extra cost to “Recover” customers. The concept gained a somewhat acceptance because there were some researches that did show that an element of correctness existed in the claims of the concept SRP. However, the crux of many studies showed that SRP is most likely when the error/defect is not deemed severe by the customer and has had No previous concerns with the organisation. In this situation, the customer feels that this is an exception and an uncontrollable situation and the company may have had some rare deviation from normal process and also the defect is not so severe. Hence the customer is okay to “give another chance”- Recovered customer!! In fact, this is also what the customer recovery team is supposed to convince a customer to do, many a times with an incentive as a token of appreciation (Discount/Refund/benefit on next purchase/ vouchers) for being so “Cooperative” and “Loyal”. In my personal experience in products of immediate consumption or allied functions, I know that majority of the customers do not complain about the inconvenience as they feel "managing" the situation is better than to take an effort for correction. They do not give a repeat chance for some time, as they order from some other place and talk about their bad experience with their circle of contacts and very recently the online medium is used widely to vent out dissatisfaction and frustration …. The damage is beyond the reckoning of the food outlet, but may have been controlled if the product/ service was provided right the first time. I have seen that even in situations where the SRP may be deemed successful, wherein the customer has “Forgiven” the defect on record, the customer actually coming back is lesser times than the customer shifting loyalty for at least some time. In my experience in food industry, where the life of the product is not for long and there are many other options in rampant, the service recovery mechanism; - Satisfies the customer at that point of time, as the immediate need is met, but does not guarantee revisit intentions - Does not avert the sour experience from being shared more in detail than the recovery effort, which causes negative word of mouth recommendation. - Does not guarantee that the Brand image remains intact and does not get hit negatively - Incurs cost – either directly or indirectly It is also seen that the same customer may return after some time after trying other options, but will recheck for the defect experienced earlier- the faith/trust is reduced, The positive or encouraging factor in the above points is that the customer is satisfied that his concern is taken care of, which is actually a trailing measure of performance It is right to believe that a very strong and focussed approach is required to retain a customer, - Difficult task with less chances of success and almost all the time, an attached undesired cost!! A good example is the case study of the recent recovery efforts by the United Airlines. The margin for error in a service recovery process is very low as even very large scale recovery efforts eat into the trust and reduce the loyalty- there are times that the recovery process may also disturb the customer. The customer feels that there is a need to try other available options. The concept of loyalty shift cycle applies, most of the times, and the customer does come back but a considerable damage is done already. It is in fact easier to focus on creating experience which are convenient and enjoyable for the customer while meeting their need. The focus and spend should rather be on developing processes and systems to get the product/ service right the first time, consistently. That is the most dependable and sustained method to earn customer trust and loyalty and also recommendations. Efforts on QA systems and standards and training yield long term and effective results for sure. As a matter of fact, it is notable that in their profiles, the top ranking companies in the world boast of their services which are right the first time and lay very less emphasis on their post sales services or retention programme Having said that, it is not advised that organizations should not try to recover a customer in case of a defective delivery. But it is definitely advised that the company should not hope that such recovery activities will increase the lifetime value of a customer or improve their inclination to ask for the service /product again in the near future. I strongly believe that the SRP is a debatable myth!!
  4. In context of Experimentation, any "nuisance" or unwanted and uncontrollable factor which causes variability under normal operating conditions can be termed as a noise factor. These Noise factors may affect the dependent variable and hence adds undesired variation to the process / experiment and/or product. Such noise factors are typically of no interest to the researcher or process designer. Most of the times Noise factors are difficult or expensive to control during manufacturing and hence, is best to be controlled and substantiated during the research/ experiment stage itself. There are 4 types of imminent Noise factors- 1) Physical Noise is any external stimuli in the environment that causes variation to the desired condition in an experiment or process. Common examples are someone talking incessantly in the background during an experiment where silence is required. This causes disturbance and is not required- similarly other examples can be unwanted music being played, dual communication etc. 2) Physiological Noise is any unwanted stimuli caused due to physiological function like hunger, fatigue, headache etc. basically any physiological effect that affect the way you think and feel normally. 3) Psychological Noise are mental interference like wandering thoughts, preconceived ideas 4) Semantic Noise is any disturbance in transmission of any message due to misinterpretation that may be caused due to ambiguity in words, symbols, acronyms etc. During an Experiment, the noise factor can be derived by taking the SNR (Signal to Noise Ratio) at the input and dividing it by the SNR at the output. The SNR at the output is always lower and hence it is obvious that the Noise factor is always greater than 1. It is always better to have the signal level higher than the Noise level to have best output. The above mentioned uncontrollable factors can be controlled during the experiment using steps like Blocking & Randomizing. While Blocking is a process used to remove the effects of a few of many important or effective nuisance variables, Randomising is a process used to reduce the ill-effects of the remaining nuisance variables. It is obvious that blocking has higher significance than randomizing in reducing the variation caused due to impactful variables of interest.
  5. A Neural Network is sequence of mathematical and logical algorithms that work in tandem to identify the core link or connection in a set of data (input) through a process that follows the working of the human brain. We know from various researches on how the various “Sensory” or “receptor” centers in the human brain are connected through a network of neurons that react to any stimuli/information from the “5 Senses”. These neurons then link through a network to draw up various permutations and combinations that can be derived from the information, based on the experience or training that these receptors have derived from the live world. The network follows a process or set of “learned” rules for calculation or for any other problem solving Operation. This is also known as algorithm. Similarly as an analogy, a neural network is made up of many perceptron neurons, in layers, based on the “training” received. The said layers are also called hidden layers which are the primary unit that works together to form the Perceptron layer. These neurons are the ones which receive information or various forms of data, in sets of inputs. These inputs are combined with a bias and a group of weights which produces a single output, which can be a built up / calculated perception. For this process of computation, each neuron considers assigned weights and bias. Then the “defined “combinations functions, across the network, uses the weight and the bias to give the output (perception) through the following equation: Combination = bias + Wights * inputs Post this, the activation functions produces the final output with the following equation: Output= Activation(combination) Thus the process flow can be briefly put forth as ; 1) Information/ data is fed into the input layer and then transferred to the hidden layer(s) 2) The interconnection between the said 2 layers assign weights to each input randomly 3) A bias added to each input after the weights are multiplied with them individually 4) The calculated sum is transferred to the activation function 5) Which nodes it should fire for feature extraction is determined by the activation function. 6) An application function is applied by the model to the output layer, to provide the output. 7) Weights are adjusted and the output is back propagated to minimize the error. Thus the final output is close to accurate if not accurate. It all depends on the incorporated “training”. The accuracy of the output (perception) can be improved by - Increasing Hidden layers - Change the logic of activation function - Change the logic of activation function in the output layer - Increase the number of neurons - Supply optimal initial weights while training neural networks - Provide more of relevant data/input - Normalizing /Scaling the input data - Revise learning algorithm parameters - Use Deep learning / architecture for auto feature generation to enable every layer to refine the features. - Choose the neural network model according to the problem Thus, Neural network models provide inductive means for collecting, storing and using experiential and realistic knowledge. Once the confidence on the accuracy of the output is arrived at, major business decisions can be taken based on the said outputs from the neuron network model. In short, decision support systems can depend on the output from efficient neural network models. We see in recent times that modular neural networks can perform highly complex task with great efficiency with very quick results. Many decisions on sales forecasting, data validation, customer research, risk management and priority settings can be taken by business leaders, based on the outputs from modular Neural networks. In these times of penchant for disruptive decisions by entrepreneurs and investors, the Neural Network Models have gained a lot of prevalence!!
  6. It is recognized in the world of PMP as well as in DMAIC Projects that Scope is essentially the narration of all the work that needs to be done to deliver or achieve the objectives of a project. However, there is a different relevance of the scope in both the approaches, when comprehended separately. At the onset we must understand the difference in the approaches between the PMP Project and DMAIC Project including the relevance of scope Sr# PMP Approach DMAIC Approach 1 Focus is on improving the Success rate of projects Focus is on finding and eliminating defects within a specific process 2 Objective through the 6 Steps of Initiation, Planning,Executing,Monitoring & Controlling and Closing is to plan and execute a project 100% as per specification approved by the “SPONSOR” or the defined “authority”- "Not more , Not Less" The objective through the 5 Steps of Define, Measure,Analyse,Improve and Control is to reduce wastages and spends on a specific process 3 Aims at completing a project by a specific deadline Has a continuous control phase 4 Standardised Practices are used to efficiently deliver a activity that meets a predefined goal Uses data driven methods and statistics to identify and solve a Challenge in a Process 5 Project Scope refers to the detailed set of deliverables or features of a project. These deliverables are derived from a project's requirements. a scope statement outlines the entire project, including any deliverables and their features, as well as a list of stakeholders who will be affected. It will also include any other major project objectives, deliverables and goals to help measure success. The tools that best describe a project scope are - Project Scope Statement - Work Breakdown Structure (WBS) - WBS Dictionary The project scope statement defines the boundaries of the project. The project scope keeps the team on purpose, in alignment, contained, focused, and motivated. The scope might include: - The start time and stop time - The duration - The process boundaries (what is within scope, and what is out of scope) - The sub processes involved - The product lines - The locations (the divisions, the states, the territories, the countries, etc.) What stands out significantly in the above differentiation is that; - The PMP approach is activity based which is time bound and handed over to the operations after the project is over, whereas the DMAIC approach is process level oriented is taken during the operations itself. - There is a closing in the PMP approach which means that the project is over once the defined objective is made. Whereas in the DMAIC approach the control phase is continuous. The scope, hence, needs to be more in detail and specific with timelines in the PMP approach. Therefore the Project Charter contains an overview of the project scope only and the charter is presented to the “Sponsor” for approval and to ensure the rights and power of the Project manager and the involvement and contribution of all stakeholders. The start date and end date may be mentioned. As the scope in the PMP approach has to be specific and the sub activities and coordination’s also are to be time bound the project scope statement is made separately. The idea is to avoid any ambiguity around how and what the outcome of the project will be. This allows the project manager and his team to track timelines of the detailed WBS and ensure that the success rate of the project is at 100%. The same compulsion does not exist in the DMAIC approach as though the scope boundaries are mentioned, it can be changed if the efficiency and effectiveness of the process is impacted positively in the improve and control phase, through many improvement tools available in Six sigma. The same applies if the impact is not visible, then the method of Improvement and relevant control also can be changed and there is no rigidity. Therefore, the overview of the scope is mentioned in the Project Charter itself. Betterment of the process output is the objective of the Green belt or Black belt who leads the project or set of projects. (To lead a Six Sigma project, a person typically needs to have reached the Black Belt level) It is prudent for the top management of an organization to believe that, as put forth above, a six sigma professional is proficient at finding and solving a problem and a PMP project manager is adept at correctly implementing the project itself. Merging both the approaches “smartly” is the best idea to ensure that the organization benefits from the outputs of the efficient and effective implementation of solutions derived for defects in any process that has potential to add value.
  7. We are living in very challenging times for businesses; lots of uncertainty, ambiguity and risk at every step. The leadership qualities of a leader are of prime significance now, more than ever before. The competition and the scope for generation of new and better ideas is very high due to the amazing technology and ability to transfer data at speed that was unimaginable a few years ago. A modern leader comprehends that athis is a time of massive disruption and creation. Hence, there needs to be a new approach to “see – learn –do” and redirect the course of events in a significant and constructive way. To address this, Otto Scharmer and his colleagues at MIT conducted interviews with many entrepreneurs and innovators in the fields of business and science to take some well – known ideas from them and combined the same in a profound way. He then extended the basic principles into a theory of learning and Management, which he called Theory U in his book with the same name. Theory U is a change management method which can be used by Leaders as a “Personal Leadership” Tool. The concept that Scharmer puts forth, tries to provide reference points so that leaders or entrepreneurs are able to dissociate themselves from age old instituted ways of thinking and solutions. The idea is to enable leaders and entrepreneurs to make their own contribution to solutions which are in sync to what the organizations actually need in the current and future business environment. <Diagram1 UTheory> The Theory U Model The model is represented as a flow of stages in a U Shape that moves from left hand side to the right side of the U. The user, to begin the route at the left side of the U with will have to have open mind and acceptance to new ideas and be rational and not allow any emotions to obstruct actions to bring about any required change. Here onwards, the route /theory on the right hand of the U , starts to move in upward direction towards reintegration and acceptance of new and innovative ideas…. Then is the execution!! Steps/ Path defined in the Theory U Model that can be used in an Organization. The leader/Entrepreneur is advised to inculcate a culture of Cooperation and involvement in the organization, at all levels. The employees need to be encouraged to keep aside or abandon established ideas and practices which are non-productive and/or add no value to any process or product, or to the organization as a whole. Only then will new ideas and methods start budding and make productive and valued contribution to the business for present and future. Most of the employees at all levels have gained experience and learnt from the past. The management must encourage the employees to also “learn from the future” by focusing on future possibilities in the business environment by “Presencing” – a merger of two words,” Presence” (Past & Future) and “Sensing” (Feeling). Thus, to “Presence” is to realize the future potential of any situation/condition. There needs to be an effort to develop a system from the prevalent conditions / status, following steps in U Shape path to attend to and co-shaping the organization for the future. 1) Downloading is continuing or repeating the existing pattern of thoughts and practices 2) Seeing/ Observing is when the people are ready to suspend the existing pattern of thoughts and practices and be prepared with “fresh eyes” to see. 3) Sensing is the phase when everyone redirects attention from objects to source. And try to understand various perspectives of the same situation, which all may have overlooked earlier. Allowing new concepts to overrule the old concepts which did not show results , through factual listening, empathetic listening and generative listening. 4) Presencing is the turning point!! As mentioned above, it is about letting go of everything that is not essential and productive and explore the dormant potential of the future.- Point of realization of untried possibilities 5) Crystallizing is the phase when the organization /employees begin to enact or envision the future., without any fear of adversary in the organization due to non-adherence to old methods 6) Prototyping is bringing the new into reality by improvising and embodying the new ideas and concepts into samples or models of product built to test the idea / concept or process . This helps to evaluate a new design to enhance precision and provide specifications for a real working system , rather than limiting to a theoretical concept. 7) Performing is to implement the concept /idea/ process for better results. Thus Theory U is about bringing change. When there is liberty and method to change , the organization begins to see and do what they did not see and do earlier. In Practice, Entrepreneurs use the Theory U as a tool to encourage employees to think differently – “Out of the Box” and have an open mind with respect to the new ideas and concepts and applications available of thinkable. The requisites and characteristics for proper following of this model are; - Managers and employees at all levels should be able to focus on successes already achieved. - Brainstorming and innovation should become an intrinsic part of the organizational culture and policy - Focus needs to be theer for the development of bot organization and the employees as individuals - Adept technologies are deployed - Awareness and research of the business environment is taken very seriously by the leadership team This approach helps to define better processes in the organization. I have experienced this whole shift of culture in an organization that I used to work for. Executives were trained through work shops with many exercises and routines , to be able to communicate and influence the idea of thinking differently for any given situation and bring about a fresh way or method that is better than the existing methods and most importantly was relevant for the future.. I realize now that this was the initial set up for the Kaizen methodology culture that the organization wanted to instill!!
  8. VRIO stands for Value , Rarity, Imitability and Organization. A Question Framework of the 4 mentioned matrix is created to analyze and uncover ‘Sustained Competitive advantage”. Since it is a tool that helps to plan for achievement of long term goals and create an edge over the competitors, VRIO framework forms a part of the Organization’s strategic Scheme. Unlike SWOT, which is carried out on the organization as a whole, VRIO analysis is conducted on each individual resource or competency that needs to be reviewed. The abovementioned four components of VRIO Analysis are arranged in a framework in a style of a decision tree with branches that lead to decisive strategies and then action points. <Diagram1> The said decision tree structure with branches or nodes are developed with some fundamental question that lead to decisive strategies and then action points. The most fundamental Question to put forth relevant to any resource/Competency is “Does the said Resource and/Competency add value to the customer?? It is pertinent that only resources/capabilities/competencies that add value, can lead to competitive advantage, else, any non-value adding resource may lead to competitive disadvantage only. After that the next relevant steps are taken in the defined course of the Framework – Refer to <Diagram 1> Steps for VRIO Analysis; Objective: To determine whether the Resource /Competence under review has a Competitive advantage or a competitive Parity or does it have only a temporary competitive advantage or an unused Competitive advantage or at the best it has a sustainable competitive advantage. 1) Select and Define the Resource/ Competency that needs to be reviewed 2) Ask questions to arrive at the Decision Nodes and verify the competitive edge of the resource/Competency in review. 3) Use the 4 categories of Value, Rarity, Imitability & whether the organization is able to capture the complete possible value. 4) In the first Category we need to understand if the Resource is adding value to the Customer. If a resource is established as being not valuable to customers then it is only draining time, effort & money and there is definitely a Competitive disadvantage. Action points can be taken to either eliminate or improve the said resource /Competency 5) If the Resource /competency has value but has less or no demand or is Easy to come by at the competitor’s as well- not rare; then it would fail, the rarity category test and will be said to bring in Competitive Parity. This would mean that the said resource is on equal footing with the Competitors in the market. Action Points to be decided to bring in that “Difference” to beat the competition and create a need /aspiration & demand in the market 6) A resource with Value and Rarity is then tested for it’s Imitability. If the analysis through relevant questions and research data leads us to conclude that the resource is easily replicable and can also be attained by any competitor then there is a Temporary Competitive advantage, as there is always a chance that the similar product will be available in the market from other competitors. The action points need to focus on what can be done with the resource to remain ahead of the curve. 7) If the resource in review is analysed to be Valuable, Rare and also inimitable then the said resource has still got the potential to be used to maximum. This resource probably has an Unused Competitive Advantage that the organization has to capture. The action points need to ensure that the organization puts in place the right systems, processes and procedures to utilize the unused advantage. A Sustained Competitive Advantage is the best possible outcome of the analysis as it would imply that the resource/competency under review is bringing in multifaceted advantages to the business and the organization has robust systems, processes and procedures to take acquire due benefits of the competitive advantages that resource is providing- Then, the focus needs to be on marketing the resource/product/ competency. The above concept can be used to the benefit of the organization- The benefits or advantages of the VRIO Framework concept are; - It is very Simple and Clear concept and gives decisive output - It shows where the business is doing well and where it is not doing well- Resource specific. This makes it easier to take focussed corrective & preventive and creative actions for continuous improvement - It is broad – any resource/competency can be analysed very quickly - The process can be repeated multiple times for review due to the less time it takes and the reliability of the output - It can be used to analyse competitors as well and then take action on edging them out- A possible and justifiable business objective. - Can be used to compare the organizations business advantages with that of the competitor. This ,combined with the need and demand analysis of the market can help to take major strategic decisions. Almost every matured organization uses VRIO analysis in combination with other analytical techniques to help evaluate not only business resources and competencies, but also the products. For example let us take the Burger giants in the country. Each one of us will agree that there is not much to a burger than the bun, the dressing and the patty in between. However, you will see that each of the Burger brands are competing to create value through competitive pricing, Rare type of patties; I know of a brand which has started Raw Banana Patty to attract certain segments with religious practices, in the market. You will see these players investing to develop in-house (proprietary) sauces to make them inimitable and yes the organization is fully committed to utilize any unused advantage that any product, / resource/ competency that can help to do better business. Notwithstanding, this is a continuous business evaluation process.
  9. “Hoshin” in Japanese means “Direction” or “Compass Needle”, whereas “Kanri” means “control” or “Management”. The combination of the two words reflects the connotation “Direction Control”. Hoshin Kanri is also dubbed as “Policy Deployment”. It is essentially a Lean management method to ensure that that the strategic goals of an organization, drive progress and action at every level within the organization. The intention of the technique is to let the strategic goals guide every decision and action in a planned manner and eliminate the waste that comes from inconsistent direction and poor communication. It is a powerful, process oriented strategy deployment methodology for defining long range key entity objectives. These breakthrough objectives, which brings about significant way the organization operates, extend 2-5 years with little change. In addition, the Hoshin Kanri process continues to focus on the day to day business measures to run the business effectively and align with the set strategic goals. This dual approach countenances the organization to focus on a systematic growth of the organization in any business environment. How does Hoshin Kanri work in a Business organization?? “Strategy without tactics is surely the slowest path to victory. Tactics without strategy is the din before defeat.”- Sun Tzu At the onset, the top management must understand the symptoms that indicate that the organization needs to follow Hoshin Kanri. - Senior Management Vision does not match the organizational activities - Annual objectives are rolled out in March and not earlier, say in January- shows that the planning in being done JIT- a big flaw!!! - Year to Year Plans never seem to connect. - Constantly missed budgets and forecasts - Too many bad projects in process - Very long lead times for improvements - Most employees, never seem to feel part of the team. The “old” ones feel that the new changes are demeaning and useless and the “New” employees feel that the old system is too rigid and useless- dissatisfaction is omnipresent along with low morale - Little or no connection between strategy and continuous improvement - Excessive brooding over market conditions for dissatisfactory results. - Very less time is spent on planning . Ideally it is a recognized fact that 60% of time in a PDCA schedule should be spent on planning, but most organizations as a culture believe that maximum time should be given to doing- A misconception that needs to be ironed out. The Top management must also recognize and act to nullify the key limitations of standard strategic planning - Too Many priorities - Insufficient detail/ data for analysis - Lack of active review Hoshin Kanri helps to capture and concretize strategic goals as well as to develop the means to bring plans to “real” effectiveness- It is therefore a target-means deployment. Many Organizations use Hoshin Kanri as a visual Planning tool to aid them to identify the key focus points and strategies to use to steer the organization towards its vision. The tool enables “everyone to see” where the organization is going and simultaneously, the plan towards the vision. The modus operandi is to build plan and strategies as a team and share responsibilities across all levels to get results. <Diagram 1> The idea put forth by Professor Yoji akao was that “Each person is the expert in his or her own job and Japanese TQC (Total Quality Control),is designed to use the collective thinking power of all employees to make their organization the best in their field”. Based on this concept the Hoshin Kanri planning process indicates the method in which an organization can drive it’s action on a day to day basis to reach their strategic vision. The three levels of Hoshin Kanri Deployment in an Organization. 1) Top – Management by Principle - Vision - Mission - Shared Values 2) Mid- Management by Priorities - Objectives setting - Target Means Deployment 3) Tertiary-Management by projects - Network of interrelated projects - Cross Functional Management The Next Step is to create a hierarchial system for Goal Alignment and measure through well-defined KRA & KPI. The idea is to ensure there is a vertical alignment through entire company structure using top down goal setting in such a fashion that each subsequent goal supports the previous level’s goals. This has to be integrated with Bottom up focus on total employee involvement in continuous improvement.- It is a Catch ball process. <Diagram 2> Mature organizations, thus link their Balance Score card, which contains macro measurements related to key success factors to the MBO (Management by Objective) programme by setting targets and encouraging the supervisors to negotiate the targets with their subordinates and recognising and rewarding wherever and whenever due. Hoshin Kanri accentuates this by providing focus on alignment and measuring key processes and putting forth who will do what and when to achieve the set goals!! Hoshin karni uses the following three key principles ; - PDCA Cycle - Pareto Principle - Cause & Effect Relationship The Seven Steps applied in Hoshin Kanri are; i) Establish Organization Vision ii) Develop 3-5 Year strategic objective iii) Develop Annual Objective that will culminate into the 3-5 year strategic objectives iv) Deploy to departments using target- means approach v) Implement the action plans vi) Review progress regularly (Monthly/ Quarterly) vii) Conduct bi annual reviews Though this may simple , there are critical success factors that always need to be focussed upon to ensure that the methodology does not fail at any point. - All analysis and decision needs to be data driven – Management by fact!! - Focus needs to be consistently on the process – more than on the results - Management Goals and priorities need to be deployed across all functions and levels. - There needs to be adequate tactics to achieve goals - There needs to be just sufficient communication between the functions - Last but not the least- Regular reviews at all levels. I have experienced the rooted use of Hoshin Kanri in a MNC which is a famous burger giant, wherein the whole process was called as 31Q. It stood for 3 Year vison, 1 Year plan and quarterly objective & execution. The Vison was Planned in the top line meetings and percolated to the mid management. The mid management team would have a departmental 31Q meet every year, wherein they would break away from daily routine work, for a few days and focus on reviewing internal processes and outputs and plan the objectives and execution to align with the vision. This in turn would be presented to the top management and a visual plan and toolkit would be drafted by the strategy team in collaboration with the top management. The output would be a distinct, measurable plan of action for each department- a target- means approach. This was denoted in an in-house version of the Hoshin Kanri X matrix in Excel sheet. It was designed to develop and implement strategic, tactical and synchronized plans across not only departments, but also the people across the organisation The same would then be implemented as a part of the quarterly business plan. It was used for policy deployment . periodic reviews enabled each team to work on their strengths and optimize opportunities so that the team at each level could drive the results in a time bound fashion towards the 1 year plan and the 3 year vision. The Hoshin Kanri XMatrix ensured ownership and accountability at all levels and thus encouraged organizational learning , faster course corrections and cross departmental coordination and people & process development and continuous improvement. The Hoshin Kanri X Matrix is available in Excel on the web and can also be created by using the QI Macros add-in. The said MNC is a leading brand in India as well as in other 165 countries across the globe because of many reasons, but one of the most obvious reasons is this adopted method of Hoshin Kanri as a culture. Some other famous organizations which employed Hoshin Kanri include Toyota, HP, and Xerox. Toyota has followed the Hoshin Kanri concept since the 1960s. These company’s long-lasting success clearly proves that this approach leads to positive results.!! Hence , as stated in the question, as an analogy, Hoshin Kanri as a strategic approach ensures that the boat of business smooths smoothly in the desired direction, However or whichever may be the direction of the winds of external market conditions.
  10. A defined series or steps of action, repeated in a pattern in a progression from defined “start” point to a defined standard “finish” is called a process. This ensures consistency in a commonly understood flow and thereby provides a structure for any task to be completed as effectively, efficiently and consistently, as possible. A good process is like a checklist, which can be measured in terms of effectiveness and efficiency. This is important, as a measurable process provides for the focus to make it better to provide better results/ outcomes. The best way to determine the effect of the process is to identify trends, patterns and details of how the process runs through analysis of relevant data and improve wherever there is scope for improvement. Process Mining is an analytical discipline, which enables the above, by discovering, monitoring and improving process as they are in their current structure, by extracting knowledge from event logs made available through the advanced information technology systems. Process Mining offers objectives, fact based insights derived from actual relevant data from within the process and it’s output. This data helps to audit, analyze and improve the existing business processes, by answering compliance related as well as performance related check points. It is very important that process mining is data driven as the idea is to discover the map of the process in some domain. Hence, the process in focus needs to; - Leave some trace in our system (Log entry required) - Be repeated a few times, so that the data is regular for the patterns to be evident. Based on the Event logs and the study of the pattern, Process Mining provides 3 types of information; Discovery- Data driven approach to produce a process map, based on event logs. Conformance- This is a method that helps to confirm if there are any breaks in the desired rules or any outliers. Enhancement- This method helps to improve the discovery and conformance process with an improvement in the theoretical process map. You may be able to understand how the repeated processes can be done by a machine instead of a human being, thereby reducing the chances of human error. It goes without saying that when the processes operate efficiently, the organization is agile and it is easy for it to adapt to any outside forces, allowing more time to focus on revenue and profitability. In today’s world with so much technological opportunities in machine learning and IOT, we are seeing so many new methods from which we can take big and better business decisions through enhanced processes and generate better business values- lesser cost and more returns. Hence, Organizations want to execute maximum capacity and hence need flexibility in processes which can come only through a deep understanding of how things are working and where modifications are possible. Many organizations leverage process mining to understand which processes are good and ready for automation. It is a pragmatic approach to select stable standardized processes which are data- centered with easy repeated tasks and deploy automation. Process Mining helps to discover the business process where redundancies and process inefficiencies are evident. This is favorable for RPA as for it to be successful, the variation in the business process needs to be minimized RPA (Robotic Process Automation) helps to transfer the execution of such processes from humans to bots. RPA interacts with the existing IT infrastructure and helps to automate workflow of process which are labor intensive – thus eliminating the scope of any human error and reducing cost of labor in many cases.
  11. The Four-Eyes Principle is used in many organizations, in business transactions to protect against negligence and corruption. In Business organization, all important decisions are approved by at least 2 individuals, more often the CEO and the CFO- so it is the 2 Eyes of the CEO and 2 Eyes of the CFO- thus the name 4 Eyes Principle. This concept is used in the many fields, for example, most us may have experienced; when we go to withdraw money at a bank, our submitted Cheque slips are scrutinized by 2 people- The idea is that 4 eyes see more than 2 eyes, so all errors or lapses, if any, can be spotted. Having said that, we know that there are many cases of forgery and frauds that happens in banks. The idea works in many cases, as a sound principle, but 100% accuracy is not guaranteed as the devil is in the details, ie. It may look like a simple principle, but will take more time and effort. With the advent of relevant technology in machine learning and data transfers, I am sure a scanning device which can check on the correctness of the details on the cheque, including signature, will provide better accuracy in lesser time- All relevant to providing value to the customer. It would be fine to state, hence, that just because the principle is followed in many Small business and is well known and many believe in it, does not mean it makes sense. No Value added!! Before I go ahead , I must mention that there are some situations where this principle is relevant and used with stronger purpose, but there is always exceptional inaccuracies and incorrectness in the output. Few situations where the principle is used as a practice - In a small organization, where process control is deemed at max priority. – However, most of the times, the yearend audits are always an arduous task. - In organizations where the finances are managed directly by the investor and the CEO needs to provide a certain level of guaranty that invested monies will have desired level of ROI. This is more like a check and control method, but the blame game in most cases always exists. - The confidence, maybe due to previous experiences, is low on the employees- But I believe, hiring better employees and proper training and valid checkpoints are always better option - It is taken for granted that approvals from the CEO and CFO confirm the sanctity and requirement of the project/ transaction – This is an organizational culture, it results in many delays in projects “waiting” for approvals - It may be a transaction that is very critical for the organization; Example that is very common is Banking transaction- Signatures of both the CFO and the CEO is taken.- This is probably the most apt situation for the 4 eye principle, as it rests the accountability on the top 2 people - In Translation business, it makes sense in certain circumstances, wherein the second person is a proof reader who knows as much or more about the translation as what the original translator (first 2 eyes) knew. Though here also, there is no guarantee of 100% accuracy. As is very obvious, although the 4 eyes principle adds some element of security to a decision making process, it’s effectiveness depends, in the first place, on the competency and integrity and diligence of any involved individual. There is every chance that the 2 people who are designated for the 4 eye principle, may have some “understanding” within themselves and take advantage of the authority to commit some possible irregularity. I know of some organizations that defend the principle by following a random rotation of authorized individual is done so that it cannot be known with any certainty which 2 people will be dealing with a given decision/ process. This helps to check any sort of “understanding” between the regular people to commit any possible irregularities. However, the four eyes principle is not a guarantee of anything. I strongly believe that if we want to run strong processes and safe/ risk free transactions, we must make sure that we have competent employees and a proper Process flow, with relevant technology, which is measurable and the scope of improvement is met, for best results. Else, the impractical idea would be to follow the 6 eye principle to check on the output of the 4 Eye principle- Which will only increase the time and effort- Thus there is no value added , neither in the 4 eye principle or the 6 eye principle.
  12. Kata refers to fundamental moves made in Japanese martial art, which is practiced over and over again by self, ideally under supervision of the “Master”. Continuous practice leads to a routine that the body gets used to and become a basic form or pattern that the body will follow as a reflex action, by impulse as a reaction to any stimulation. For example, a “criss cross” arm movement to defend against a punch from an opponent can be practiced as a Kata by self. Continuous practice of the same makes the muscular coordination so efficient that, the arms will move in the same pattern in which the kata prescribes , to fend a punch if and when someone actually attacks. Thus, Kata is a scientific methodology that uses consistent practice repeatedly to train any skill that enables a person to make continuous, rapid & incremental improvement. In Business or in an organization, the concept of Kata can be used to institute continuous improvement philosophy , by developing habits and skills to shift individual mindsets. Eventually this will drive the organization’s culture towards continuous improvement and keep processes efficient, customers will be happy and most importantly it will be a profitable organization. You will see this phenomenon most ardently followed at an inbound Contact Center – The call agents are made to run through scripts for various situations- It is given that 99% of the calls that are received by a service call center is almost similar by history of query. The common call types are defined and appropriate responses are defined, keeping in mind the legalities, Company Policies, Customer satisfaction quotient, industry standards and a “Win Win” approach. The scripts are repeated with prescribed intonation and soft skills over and over again during training , through “Mock calls”. Over a period of time this becomes a habit and more like a inbuilt programme in the agents and then they are allowed to attend the “real/ live” calls. There are five steps prescribed in Improvement KATA: 1) Understand the direction of Challenge 2) Grasp the current condition 3) Establish the next target condition 4) Experiment Towards the target condition 5) Repeat till satisfaction/perfection This is almost Similar to the PDCA cycle. Having said that, instituting a new habit or process can be daunting – any new practice brings about change from the existing and hence there is always the associated perils. Henche Kata needs to be a structured “Routine” that makes skills and mind-sets teachable . Coaching Kata is a set of routines in teaching, that help you develop coaching skills. It is a pattern or process that helps Managers in a business environment to teach improvement Kata thinking and practicing and applying in real life situations. The approach to training people is also similar to the steps of Kata improvement. We may call it PPTF(Prepare, Present, Tryout and Follow up) Prepare- in this step, the trainer, who is a subject matter expert ensures that the training requirements(Challenges) are recognised & addressed- The purpose and the end objective is known and the required resources are available Present- The Trainer presents the process or the Kata to the trainee and explains the why behind the process. Tryout /Practice- The Trainee practices the kata or process exactly as described under supervison of the trainer , until it’s pattern becomes somewhat “involuntary” and habitual for the trainee. Corrections are made and advise given till the trainee understand in detail Followup- then it is about more practice and the trainer follows up on improvement and advancement for next steps. This step may continue for a period of time till the trainee becomes a thorough through practice and is able to execute. Example of Coaching KATA is followed in many matured organisations that follow a sturdy training culture and are receptive to lean methods. These organizations follow many sorts of checklists to monitor the advancement in both improvement Kata and coaching kata. There are many such formats available on the net like; Improvement Kata Story board, Obstacle Parking Lot, Current Condition/ Target Condition Form, PDCA Cycle records form. There are many organizations which are into food business (Quick Sevice Restaurants) that also follow-up on the trainees and processes through “Onfloor” observation Checklists at the Gemba. Both theh above described methods can be actually used in all organizations with any type of business, as it is only about practicing till you excel Thus practicing the Improvement Kata and Coaching Kata approach in an organization improves the speed and effectiveness of learning as a group and not as single individuals. It creates a shared ,standard way of thinking and action for the group, which will be well fortified to deliver ever improving results- towards a profitable organization!!
  13. CEDAC stands for Cause and Effect Diagram with the Addition of Cards. It was developed by Dr. Ryuji Fukuda, at Sumitomo Electric, as a tool for continuous systematic improvement. The CEDAC board helped to identify causes of specific problems and to identify, test and institute process improvement in a participatory approach. 350 CEDAC projects were initiated, tried and tested by Sumitomo Electric with extraordinary results. It was proven to be an effective tool and the concept was appreciated as it could be applied to a variety of situations – Design problems, Communication Problems, Set Up Problems, downtime problems and many other problems an organization faces regularly and commonly. Today the concept is used in many organisations which believe in participatory approach and development of solutions for any problem at the helm of the workplace. How Does a CEDAC work?? It is apt to say that CEDAC is an enhancement of the Fishbone diagram, which accentuates the process that allows team members to build on each other’s ideas from a brainstorming session. <Diagram 1> 1) The team should agree on a problem to be analysed and solved- <Diagram 1> is a CEDAC board for the problem of Hitrate of on time food delivery 2) Determine the major categories which can be cause or have effect on the problem 3) Think of possible causes in each category and jot them in sticky notes (Post it stickers) and stick them on the CADEC Board in the blue zone (Left Side) in each Category box 4) Use the “5 Whys” tool to search for root causes and jot them on the sticky notes and connect them to the various other contributing factors. 5) This board can be placed like a bulletin board at the “Gemba” with an invitation for the whole team to examine and possibly add some more causes that they feel are relevant for the problem statement. 6) The team should be encouraged to also post their ideas of solution for the causes of the problems, on the Yellow zone for respective categories (right side) of the line. ** Sticky note pads of both colors need to be made available** The above six steps ensure that the causes and solutions keep coming in tandems. The solutions need to be analyzed for the impact and effect and prioritized based upon the maximum benefit. The idea is to implement the solutions and reduce & eliminate the causes that impact the problem statement. The Board needs to be updated as and when a cause reduces. The status of performance improvement also need to be updated. This way the activity has an immediate feedback mechanism. This improves the motivation for participation. The above method was implemented in an organization, by me, wherein food delivery was a channel for sale. It is common knowledge that “Timely Delivery” is the most important deliverable for the customer to appreciate the transaction, followed by Quality of appearance, taste etc. The fact is that in most of the food products, the time spent in delivery also impacts the quality of food negatively in direct proportion. Hence, the problem statement was about Hitrate of Delivery (percentage of orders delivered within the stipulated and committed time of 30 minutes). Internally the objective was to close the order within 30 minutes, ie. The rider would return to the outlet after completing a single order within 30 minutes- That would confirm that the customer has received the order within 30 minutes. The CADEC approach was applied in 5 sample outlets- The idea was that the most common and effective learnings would be applied across all the outlets during a roll out. The impactful Insights that were derived from the CEDAC Board were: # Categories Causes Solution 1 People - Non availability of Riders - New Riders took longer to reach the Customer as lack of area knowledge - Incentive on attendance and productivity - Soft copies of maps were developed with area land marks 2 Trading Area - Trading area was not defined- distance of delivery was very high in many orders which took lot of time , and consequently the orders pending for delivery also got delayed - Trading area was rationalised to a seven minutes riding distance during peak traffic times. This actually ensured that we were able to deliver food to the customers on time and the repeat business grew after a period of time. 3 Design of Outlet & Process - The Delivery section was too far from the Exit it took that much time more. - The Bike parking area was too Far from the Exit - Orders of delivery took more time to prepare as the home delivery orders are mostly of units of product - Special section was created for delivery where the 5S approach was followed to improve efficiency. - Bike Parking and maintenance was given due diligence - Orders for delivery were given priority and the 5S approach at the Delivery section helped a lot in saving time for production, assembly and packaging of the orders - Large orders with more than 15 units of products were given separate status as "High value orders and the delivery time was extended and conveyed to the customer. This reduced the customer's anxiety. 4 IT & Equipments - There was no method to confirm the actual delivery time of the order - Bikes and kitchen equipments needed to be upgraded - Applications were developed to ensure that riders could update the delivery and payment times. - Rider tracking GPS was incorporated in the application - Bikes and equipments were upgraded with a proper preventive maintenance calendar in place 5 Customer - Customer Data base was not very neat with address information being incorrect - Customers would take time to receive order or make payment , thereby delaying the rider for the pickup/ delivery of next order - Existing Customers were called and addresses were rectified. A standard format of registration for address was instituted. Order takers were trained to follow the address confirmation process and entry in the Delivery software. - Customers were sent messages on phone in advance before the rider reached them, to remind them to keep the payment handy The results were nothing less than awesome. We not only saw an excellent Hitrate , but also a steady growth in orders and revenue- a brand revival !! Some points that we have to take note of; - Ensure that all members participate in some way or other and no one is allowed to overpower anybody’s opinion in any way- it has to be a receptive process - A “NO BLAME” atmosphere with mutual respect needs to be instituted. - Categories must be defined well within the team and ideas beyond the defined categories should also be given due respect- “Only an unshared idea is a bad idea, else no shared idea is bad” Some other benefits that were realised. - Team Bonding - The team learnt a constructive approach to resolve issues - We realized the potential of some people from within the team- we had such wonderful people who were prospective leaders of the future. This was one of the best projects I have led and the CEDAC approach was the inspiration and method behind it.
  14. For most Investors, the purpose of the business/ initiative is to harvest more money from the money invested, which is a fair objective. The top three business matrices that is on top of mind is self sufficient Cash Flow, ROI and Profitability- ideally in the mentioned order. Hence, it is common to see that profit & ROI responsibility is delegated down the line. In many organizations, where the investor has maximum say/power, ROI has become the system of management control. Simultaneously, the top management is also keen about operational excellence, revenue generation and brand building. Continuous improvement across all processes is a core necessity. Kaizen is a proven approach that brings about continuous improvement and contributes towards profits for the organization. It is but common knowledge that the Kaizen methodology has to be implemented as a culture within the organization – a culture of continuous improvement by; - Encouraging commitment throughout the organization- Involvement. - Making kaizen a part of the routine - Binding it back to everyone’s job, through Improvement targets and attached incentives. - Departmental KPI /KRA which are allied with KPI /KRA of other departments - Measuring and announcing results - Communicating – across the organization - Being Deliberate and patient - Repeating/ replicate/ scale up what worked well, wherever applicable. Both Individual initiative and Team effort is required at all levels, across the organization to build a culture conducive to Kaizen approach. Cross functional collaboration is essential for overall efficiency and a smooth value chain. On the other hand, Return On Investment (ROI) is calculated by taking the difference of the income and cost of an activity / project – The profit generated. This is then divided by the cost. ROI = (Net Profit/Total Cost) The Base is thus cost and the ROI is best when the cost is lowest. If the costs are higher than the immediate estimate of sales, there is a risk of negative ROI, which means that the investment lost money, so you have less than what you would have had if you had simply done nothing!! The above mentioned mathematical thinking may actually inhibit initiative levels. The fundamental idea of kaizen approach is defeated and will undermine the value of empowering people to identify opportunities for improvement and make small changes if required For Example, if ROI is given too much importance, say in a food production unit; The urge for improvement in quality / taste will be taken over by the necessity to reduce cost of production. This can lead to compromise in QA which will impact the overall customer satisfaction and resultantly less revenue and profitability for the organization. Thus, though the ROI may be improved in the production process, it is at the cost of company profits. Another point is that overemphasis of ROI on improvement initiatives may not anyways give a correct picture of the ROI, immediately, in many cases. For Example, an improvement in the quality of a product or a new product that has been developed will affect performance significantly only in the future, over a period of time. Similarly, any changes of small improvements, in various levels of the organization will collectively affect the future performance of the organization. Such changes or improvements will not reflect in current profitability or ROI. The best example I can think of, which most of us will relate to is, a sales improvement programme in an organization will take improvement steps in marketing campaigns as well, along with other initiatives. But focusing on immediate ROI of these activities can hurt the brand and the long term goals and vision. I believe, Immediate results can be strong indicators of how potentially successful your initiative is, but a proper follow up and continuous improvement will only ensure that the immediate returns do not disappear as quickly as it came. Thus, as mentioned above, it might not be possible to evaluate performance / impact of improvement initiatives on the basis of the objective of ROI. It is best to get away from blindly emphasizing on ROI from the minor improvement initiatives and develop procedures that best suit the requirements of each organization/ process. The ideal method would be to develop a proper Kaizen culture across the organization and keep the ROI calculation at the organizational P&L level. Periodic reviewing of the improvement initiative(s) at departmental levels which are intended to contribute to improvement in the organization’s performance, is a must!!
  15. As Humans, we like to avoid pain- a propensity. The common notion is that people without the instinct to avoid risks or things that might hurt tends to die early. This is the core reason that you will see the habit/compulsion of cherry picking. “Cherry Picking” as the term suggests is based on the perceived process of harvesting Cherries, wherein the picker/Plücker, Picks the fruits which are “lowest hanging” ripe and easiest to pick and fill the basket. The acceptable or positive definition of “Cherry Picking” is the action or practice of choosing and taking only the most beneficial or profitable items, opportunities, etc., from what is available to meet immediate requirement. The negative connotation of the same can be that the easiest task/ project is done first and ignoring the other tasks in hand. Similarly, in any organization, selection of a continuous improvement project is a task which has the scope for Cherry picking in both the perspectives- positive and negative!! Ideally the criteria for selecting any project for process improvement are: - Customer Impact - Process Stability - Data Availability - Defect Definition - Impact on service quality There is no right or wrong order to prioritize the above criteria and most of the times the projects that suit the immediate need is selected. It is always most apt to keep in mind that the internal and external stakeholders are the people who will be effected the most by the process improvement project. Hence a well-planned project, with analysis of all the above mentioned criteria and impact is recommended at every opportunity to choose any project. Cherry Picking can be done both intentionally and unintentionally Advantages Of Cherry Picking in Continuous Improvement Programme - Most impactful projects are selected and thereby creates a sense of confidence in the top management- Investment in Sales improvement projects which brings in immediate cash flow - Sometimes projects which can be done based on similar successful projects, done earlier, with available insights and learnings are best suited to meet time constraints – Life improvement of sellable products which are nearing expiry date - Some of the projects that benefits the later projects / operations can be cherry picked – Training projects that will help in proposed operations in a new start up can begin, even before the operations is implemented. Disadvantages Of Cherry Picking in Continuous Improvement Programme - There is a chance of ignoring the better project options, with better impact – The Online marketing may be an easier and more cost effective methods to reach out to customers- This is so more obvious in these times of pandemic- But customer engagement is a continuous improvement project and Online marketing may be missed out by the customer as it is far too overwhelming in these times… maybe a telephone call would be a better option. - Sometimes the output of cherry picked projects are not permanent or sustainable and can defeat the whole purpose- Sourcing easily available Imported ingredients in a product can be a risk and continuous production may be difficult if there are any issues in importing. A local sourcing or local development of the ingredient is a better option. - It is not a good idea to cherry pick in a new project, which has no previous benchmark or simulation to compare with- The risks of choosing inappropriately is high.- Example in teh improvement project for some life saving medicine As deemed from above, it is obvious that the cons of the practice is more damaging for an continuous improvement programme as it is a practice that neglects, overlooks or directly suppresses scope of researched action that could lead to better improvement to any process. Hence “Cherry Picking” is not what I would recommend unless the required criteria and output is analyzed and/verified.
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