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Working Capital Meets Lean Six Sigma

Working capital is influenced by a complex system consisting of external and internal factors as well as strategic decisions. External drivers are composed of economy, cost of capital, regulations and market position. Strategic decisions include geographies of customers and suppliers, customer mix and vertical integration. Tactical factors are policies, processes and metrics, systems and tools and also the degree of execution of the former. Whilst external drivers and strategic considerations cannot be subject of short-term changes to gain cash advantage, tactical factors definitely are. Lean Six Sigma helps to analyse the drivers and their impact on the working capital situation. Working Capital meets Lean Six Sigma.

"Moment

Gemba? I was There

When Uwe asked me whether I would like to go to Gemba in order to help understand the client’s process we have been studying, I looked it up on Google. To my surprise, Gemba is not a secluded, unknown part of Singapore. Gemba (现场) is a Japanese word that means “the real place”. Japanese detectives use Gemba to point to the crime scene. In our process excellence context, Gemba stands for the place where the “real value for customers is created”. I was wondering about the need for this. After all, we had received detailed information about both, flow and timing for all processes directly from project teams.

Eight Workable Strategies for Creating Lean Government

Lean Government. Even to the seasoned Lean practitioner, the idea of a Lean government sounds far-fetched. Governments are traditionally seen as the epitome of bureaucracy, and the guardians of red tape, incomprehensible forms and endless queues. But there are workable Lean strategies for governments seeking to reduce waste and become more efficient. Eight are outlined here.

Perhaps considering the eight ideas can spur government change agents to study Lean literature for potential improvement applications and in the longer run, start a Lean revolution in governments.

Red Tape? – Not Here

Everyone, undoubtedly, has had the unenviable honour of experiencing ‘bureaucratic government processes.’ Be it applying for your first ID or passport, to initially obtaining a driving license and the inevitable dealings with the tax man. Judging by the time it takes and the “milestones” or number of departments one has to go through when dealing with German government bodies, the processes behind ID, passport or driving license must be highly complex and are usually being done by constantly overworked people. The Red Tape is often unbelievable.

Read Tape - Not HereSome time ago, I had to go to the Singapore Immigration and Customs Authority to receive my PR stamp in my German passport. The process was quite fast and the service very nice. I was about to leave the building when I saw a signboard which ‘advertised’ – “Get your Access Card now”. Since it seems to be a fashion to have a card for almost everything I stopped at the signboard and read the fine print. My conclusion was: “If you travel a lot you can make your life easier with an Access Card”. I turned around to ask a friendly officer for the Access Card counter.

Arriving at the second floor, I approached the counter. “Good afternoon, Sir. How can I help you?” After I had explained my interest in the card the lady behind the counter asked me with a smile: “Do you have your passport?” “Yes” “A passport photograph?” “Sure” “Some money?” “No problem” “Your thumb?” “Yes” “Then we can proceed.”

Being accustomed to typical government processes I imagined receiving my application form and being asked to fill it in, then submitting it and coming back a few weeks later to pick up my Access Card. I was under no illusion that this process would take less than a month.

The first surprise: this nice lady at the counter did not ask me to fill in an application form. She did it for me! I cannot recall any encounter with a German government clerk who would have done this. After signing my application form she asked me to take a seat.

About 15 minutes later, she called me back to the counter – presenting my plastic Access Card with chip and my photograph on top: “Sir, this is your Access Card. Please try at the simulator over there whether it works.” I tried. It worked – of course.

I could not believe what I had just experienced. Between not knowing that an Access Card exists until holding my personal card in my hands – with programmed chip embedded and photograph printed in plastic – pass less than 30 minutes in Singapore. No Red Tape. Impossible! Unbelievable!

This is what I call Process Excellence for Customer Satisfaction, or better: Customer Delight. I would not even expect this kind of performance from a private company, let alone a government agency. Thank you, ICA!

Conclusion

Only outstanding products or services are able to get customers noticing your company, talking about it and recommending it to their business partners and friends. Delivering what customers request is not enough. Customers would not ask for an Access Card delivered within 30 minutes because – for most of them – this is beyond their wildest dreams as it was for me. This kind of solution needs a creative mindset and an innovative organisation.
Keep in mind: Impossible is nothing.

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BPR Case Study: Preparation for ERP Purchase & Implementation

An Australian construction equipment rental & leasing firm had decided to implement an Enterprise Resource Planning system in 12 months. During this 12 month period there was an expectation that all front-end services including Sales, Customer Service, Receivables, Payables, would be re-designed to achieve streamlining and simplification prior to ERP implementation.

Operations spanned 18 cities across Australia with many more small ‘re-sellers’ located in the Australian interior or ‘outback’ as it is locally known. Compounding a normal organisational and operational setup was the fact that this firm grew a substantial portion of its business through the acquisition route thus effectively incorporating myriad systems and practices. There were 5 Receivables systems, 4 Payables systems and a decentralized customer service database (more than 200 input platforms) which needed to be tied together to make the ERP implementation work.
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SMED Case Study: Steel Tools Manufacturer

After a Lean programme for inventory was instituted the production facility struggled with getting a good product mix out to the finished goods inventory due to relatively long change-over times for cutting dies. Steel tool (final product) cutting dies need to be replaced after every 4 Kanban batch runs of 225 pieces each.

This frequent changeover, occurring once every hour of work is necessary to maintain and re-sharpen the cutting die’s cutting edges. Current changeover time for the cutting die was approximately 60 minutes and included the use of a single 10 ton forklift though the die weight was 5 tons. Nearly 50% of a working day was ‘wasted’ on changeovers not including the impact of the ‘inability’ to achieve a high vol-ume of product mix for agility to meet with product demand requirements of a Lean pro-gramme.
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HR Optimisation and Re-Engineering

Today, organisations must change their priorities from a traditional focus on planning and control to emphasising speed, innovation, flexibility, quality, service and cost. The HR team has to demonstrate their commitment to meet these key business drivers.

A major problem confronting HR managers today is to increase line management and employee productivity, provide higher more value-adding levels of HR service and internal customer responsiveness and at the same time reduce costs. What is needed is an HR team that is customer-focused and market-driven in its external relations with customer and process-focused and team-oriented in its internal operations.

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