In summary
Recipients
All companies and industries in every sector that want to enhance, structure, or build an effective and efficient system of processes for Production, Purchasing, Sales, Invoicing, Logistics. Both to monitor and to optimize.
Objectives
Structuring: structuring effective processes for business management, specifically:
Marketing: all sales support
Sales: from contact research to actual sale
Technical Office: project management
Production: from planning to post-sales support
Purchasing/Suppliers: plan delays and prevent production delays and inefficiencies
Logistics/Installation: Management of customer delivery and possible installation
Administration/Accounting: to quantify production costs, forecast revenues and expenses
Cost Reduction: optimize structure costs
Quantification: quantify the exact cost of a product/project
Monitoring: create and manage KPIs to initiate a process of continuous improvement and forecasting (LEAN)
Integration: integrate processes with the management system up to the machine edge
Approach
The approach is executive, months are not wasted tracing and mapping processes but their management is implemented by mapping them. This allows results to be seen from the first months.
Timelines
For the complete structuring, the Temporary Manager is applied, which can last a few months intensively and then taper off and transform into occasional consulting for a total duration of 1 or 2 years until the company achieves self-sufficiency.
For situations that only require improvement, the Management Consulting is applied, which involves a few meetings per month for 8 / 14 months.
The phases
The project is based on 4 main successive phases. To proceed to the next one, the previous one must be completed.
Analysis and Project
Analysis of the current situation and creation of the renewal project with timelines and costs.
1
Commerciale
Definition of processes in the Commercial, Marketing, and Sales area, up to the Technical office (the primary source of company income)
2
Produzione
Definition of processes in the area of Production, suppliers, logistics/installation (the beating heart of the company, the most delicate part)
3
Amministrazione
Definition of processes in the Administration / Accounting area up to the creation of KPIs to optimize processes.
4
1 -
Analysis and Project
In our experience, we have seen many companies aiming for Lean optimization to streamline the company, but before doing this, it is necessary to have structured processes. It is not possible to optimize anything that is not defined. After clarifying this point, it is necessary to talk about tools: it is not possible to program and quantify a company with post-its, paper tables, or excel sheets. A structured software is needed that integrates with the company, its machines, its tools, and the software already in use. The analysis serves to clarify these things and define a concrete and truly usable project.
1.1 - Analysis
A snapshot of the company is created in the following points:
Customer Segment: potential and desired (Buyer Personas)
Markets: Italy and Abroad (business internationalization)
Competitors: segment and top of the range
Prices: product prices compared to the market and pricing policies
Sales Process: how the product is searched, sold, and resold and the related tools
Technical Office: the process for "custom"/"special" products or standard products (R&D)
Production: how the product is produced, both internally and externally
Procurement Process: how procurement is managed
Logistics: internal process (movement between departments/plants) and external (towards customers/suppliers/Third parties)
Installation: how it is delivered and installed while verifying quality
Administration: how financial flow is controlled, how forecasts are made, etc.
Support and Customer Care
Financial Plan: budget for investments and solvency
Personnel: who does what, and what they actually know how to do
and more.
This is used to have a complete map of the company, the product, and the way of presenting.
1.2 - Project
Based on the analysis, the actual project is created, accompanied by:
Detailed Activity Plan: what needs to be done
Timeline Plan: the various steps of the activities scheduled
Economic Plan: investments the company must make and possible revenues
Human Resources Plan: resources to be used, trained, and hired
Expected results: economic, visibility, increases, etc.
1.3 - The controller
Managing processes creates an initial hurdle, especially in SMEs: adhering to defined processes and having a specific contact person (only one) for each of them. For this reason, after defining who the contact person is for each process, a "controller" is defined, a super contact person who must:
Follow the progress: the goal is to have a single company contact
Ensure that everyone does their "duty" daily: in the initial phases, daily control is indeed essential. Each user must be promptly notified in case of incorrect process adherence: it is essential to understand if the mapped process is wrong or if there is simply "no desire" to comply with it
Support colleagues on any gaps: there must be an internal contact who knows what is being done and knows it for each role, to be able to provide suggestions and corrections
Optimization: this will be the person who monitors the KPIs and discusses them with the contacts
1.4 - Integration
The entire system works if there is a software at the base that unites all departments and processes. Through it, I must be able to:
Know where any product of the order or order is
Know the cost current based on production and supplier orders of any product of the order or order
plan payments: suppliers and customers
highlight non-conformities
This allows, by aggregating data, to create a real-time dashboard of the company, processes, and any potential issues before they occur (by inserting possible alert mechanisms based on KPIs).
To do this, it is necessary that all company software systems are integrated and communicate with each other, specifically, they must communicate bidirectionally with:
The CRM
The production planner (Gantt, bill of materials manager, warehouse, etc.)
The machine tools
The accounting software
any supplier software
It is necessary to make the software communicate because a single software that does everything well does not exist. An example to understand: accounting is very rigid, by law, while sales is very variable. A software cannot think in both ways.
1.5 - AI - artificial intelligence
Identification of which artificial intelligence tools can be integrated into the process with the aim of:
Monitoring of processes
Prediction to make effective forecasts
Automation to assist users
Support to create effective responders
2 -
Commerciale
The entire project begins by mapping the commercial part, as it is the first touch point for and towards the customer. If managed correctly, it allows us to make more sales, those needed to economically sustain the entire project.
2.1 - BDC - the business developer center (commercial/sales)
Sales processes must be, just like other processes, controlled and repeatable. We don't want the "super seller" but many very good sellers. Their effectiveness is given by the person but above all by the sales system, which includes:
Customer research: how customers are actively sought
Materials: what materials are available to the seller to sell, and how effective they are (performance, catalogs, etc.)
Passive tools: website, ads, social pages, fairs, portals, etc., where the customer takes the first step
Convincing systems: Mail sets, structured recalls, etc., to further finalize sales
Commission system: network incentivization
Training: how the commercial department is trained and in how much time
Distribution and Retail: how product distribution occurs and what knowledge the network has
and more.
This analyzes the tools, helps the company create them more effectively through a method, reducing training by up to 70% and increasing effectiveness by up to 90%. This is done by structuring a BDC (Business Developer Center), where multiple roles act to finalize the sale (ads/website + Call center > sales > sale).
The sales team must track every call, every email, every visit through a CRM.
2.2 - Sales Driven Sale (marketing)
Marketing creates the sales tools necessary to achieve structured sales. Sales driven sales refers to a sale structured by process and tools, thus repeatable and optimizable. It is based on:
Catalog/Brochure: "old style" tools, necessary for street sales
Website: it is the first thing a customer looks at when we present ourselves, and it is the main tool that drives sales (both B2B and B2C)
Social and ADV: the tools where customers can discover us and learn more about us
Point of sale materials: billboards, adv etc., to generate sell-out
Mailing and presentations: the tools to start selling and introduce oneself without having yet met, or to sell again to those who have already purchased
and more...
2.3 - Technical first (Technical Office)
Everyone knows how to sell, but what has made the difference in recent years is the technical part and the support we provide. Everyone can have a product/service but the difference between one and the other is certainly the technical explanation. Thus, more and more, the technical office has moved from behind the scenes to the forefront of sales. For this reason, it must be structured and integrated into the sales department, especially if the company is a manufacturer. I need to know what it does, how it does it, and if there are problems, it is the one to confirm an order because it must first verify that it is feasible. It explicitly interacts in customer training and documentation.
Remember that the technical part is the one that will then manage the bill of materials, thus creating the link between sales and production, purchasing, logistics, etc.
2.4 - KPI
After a few months of process definition and optimization, it is possible to have KPIs and monitor them, for example:
Number or value of quotes per salesperson or region or area
Number or value of orders per salesperson or region or area
Number of appointments held per salesperson or region or area
Relationship between appointments and order increase
Proposal monitoring
Technical support
Customers who haven't ordered for more than n months
customers with decreasing orders
customers not visited etc.
Average time for quotation or special request management
Theoretical cost or production time per order or product
etc.
3 -
Produzione
Once the commercial part is settled, we proceed to the heart of the company, production.
3.1 - PDCA - Plan, do, check, act (production)
Before talking about lean, its applicability must be well analyzed by verifying that production has effective planning processes, monitoring the "basic" wastes, i.e., those due to simple misplanning. Every order must arrive correctly (responsibility of the technical office). Production must then in order:
Verify feasibility for the requested date(available productivity)
Plan productionto occupy resources and be able to plan supplier order launch
Produce in all its phases(with related warehouse loads/unloads, also feasible theoretically based on the bills of materials)
Check qualityto ensure everything is "ok"
Pack the product with any manuals included(if not the responsibility of logistics)
For each production, it must be verified if the theoretical times indicated in the bill of materials (and possibly the materials) were sufficient, otherwise the technical office must be notified to modify it for subsequent orders (which could impact already planned productions).
To manage all this correctly, the machine (industry 4.0) and the user must be interfaced to follow the phases step by step (usually before directly interfacing the machine, a manual management is carried out where the user manually moves the order from phase to phase, when the phases are defined, the machine is interfaced, thus minimizing development costs)
3.2 - Delay check (purchases/suppliers)
In recent years, the purchasing department has become vital for companies, as it must:
place orders
Monitor delivery delaysand promptly communicate them to production, which evaluates whether to postpone the entire order (placing an order in the production line and removing it halfway due to lack of raw materials generates inefficiencies)
Check the conformity of the received goodsand in case of problems, manage them with the supplier
and also
search for backup suppliersto avoid relying on the same one
manage order changesby the customer or supplier (e.g., component no longer available)
warehouse loads and stockmanage warehouse loads, stock alignment (quarterly in case discharges are made based on the bill of materials and not on withdrawal)
To properly manage all this, the software must be interfaced with the user to follow the steps step by step, combining production order planning to verify what impacts each delay.
3.3 - Logistics
Must manage deliveries to the customer, ensuring the best efficiency (price, speed, and minimal damage). To properly manage all this, the software must be interfaced with the user to follow the steps step by step.
3.4 - Customer first (installation)
Must have a defined process for planning the installation activity and ensuring a high level of customer satisfaction (minimizing non-conformities/disputes). To properly manage all this, the software must be interfaced with the user to follow the steps step by step and have a unified installation calendar.
3.5 - Care, learn, prevent (support/assistance)
We cannot eliminate problems, but if they arise, we must respond quickly to the customer, track the issue, and analyze if it was avoidable. To properly manage all this, the software must be interfaced with the user to track each request and the average resolution time.
Properly using software allows for creating a 2-level assistance:
Level 0: no expertise required, I provide standard responses to customer requests (present in the solutions database), and try to resolve (economical solution)
Level 1: if the problem is not solvable, I pass it to a technician, thus opening the case (expensive solution)
3.6 - Marginality and costs
For cost management, it is possible to proceed mainly in 2 ways:
Actual costs: based on supplier costs, they must be updated with each order/invoice. Although the advantage lies in the accuracy of the marginality, the disadvantage is the continuous data entry.
Theoretical costs: I define the maximum I can spend to purchase a raw material, and I must always buy it for less. The advantage is the simplicity of management, even in calculating margins or price lists independent of supplier fluctuations. The disadvantage is the overestimation of costs (only at the end of the year in the balance sheet do I see how much less they actually cost me, certainly not more) and an underestimation of the margin (I might have had a much higher margin but only know it at the end).
3.7 - KPI
After a few months of process definition and optimization, it is possible to have KPIs and monitor them, for example:
Average production time per order or product
Actual vs theoretical time per order or product
Impact of supplier delays on customer orders (understand what is delayed in number and euro value and by how much)
Number of supplier or customer non-conformities
Weight of non-conformity management (euros or minutes)
Inventory turnover on a rolling year or fiscal year
Warehouse stock
Margin per order or product
Actual production cost per order or product
etc.
4 -
Amministrazione
The last part is administration, not for importance but because it generally uses accounting software, which manages tax compliance. To make forecasts, the administration needs everyone else to follow the process and fill in the management system correctly (e.g., if the orders from each supplier have not been managed by the administration, it is difficult to predict payments before the supplier invoice arrives).
4.1 - Cash flow (administration/accounting)
Based on the data entered by other departments, the administration must inform:
advance payments received: to confirm orders
balance payments received: to confirm order closures
customer financial issues: to confirm blocking orders/credit limits
through others' entries, the administration can know and thus plan the cash flow for:
theoretical customer payments: based on order dates (machine progress)/shipping/installation
theoretical supplier payments: based on orders placed with suppliers
4.2 - KPI
After a few months of defining and optimizing the process, it is possible to have KPIs and monitor them, for example:
Theoretical or actual cash flow (based on invoices) incoming (payments per day, week, month, year)
Theoretical or actual cash flow (based on invoices) outgoing (payments per day, week, month, year)
4.3 - Optimization of structure and processes
At the end of the implementation of processes and control, to ensure everything is correct (thus eliminating "basic" waste), optimization can begin with a Lean perspective. The company before this has already achieved a concrete organization and qualified managers.