Business Rescue and Recovery In A Challenging Economic Time! Tom Davis Lean Business Initiatives (Lean May Not Be the Immediate Answer) LBI

What is Lean ? A systematic approach to managing business activities to generate the maximum return. Simply….. The Identification and Elimination of Waste!

Components of Lean Training Facilities Improvements 7 Wastes 5’s Value Stream Mapping Kaizen Visual Processes

Typical Process Material 30 days Sub Assembly 15 days Assembly 10 days Test 5 days Pack/Ship 3 days Total 63 days Material Lead Time 29 Days Sub Assembly Queue 14 days Assembly Queue 9 days Test Queue 2 days Pack/Ship Queue 2 days Waste 56 days Waste Process 90% of Lead Time is Waste

Value Stream Mapping A simple and powerful tool to model specific, finite business processes. The core activities: – Current Condition – Ideal Condition – Target Condition “5 Whys” --- & --- “Ya But’s”

Kaizen What does Kaizen mean? What is a Kaizen event? What is the key benefit of Kaizen? If everybody makes just 1 improvement a day Employees X 5 X 52 = 26,000/Year Incremental Approach …… Baby Steps!

Change Management Roles Will be Changing People Will be Nervous Trust Will be Key Training and Clear Communications Lean Initiatives Are Not Optional

KPI Too Little Space Cost + Profit = Sell Price Planned Overproduction Some Defects Acceptable You Have All The Space You Need Sell Price – Cost = Profit Zero Over Production Zero Defects TraditionalLean

What is Rescue and Recovery? Depends on the Specific Situation Operational Issue? Financial Issue? Product or Market Issue? Usually it is a Combination of Factors

Initial Intervention! Stabilize the Business Assess the Business Assess the Management Assess the Products Liquidity? CASH IS KING!

Assessment Operational – Is the plant Safe? Environmental? – Are there systems in place? – Are they sufficient? – Is the Staff Capable? – Is the Plant and Equipment Adequate?

Assessment Financial – Review Income Statement Balance Sheet Cash Flow*** – Are There Financial Systems? – Are They Being Used Properly? – Are They Robust?

Assessment Product and Market – Is the Target Market(s) Being Served? – Does the Product(s) Serve the Current Need? – Where is the Product(s) in its Life Cycle? – What is the Product(s) Margin? Commodity Engineered Custom – What is the Perceived Value?

Assessment Management: – Is the Staff Properly Educated and Trained? – Do They Have the Required Experience? – Do They Understand the Situation? – What are the Deficiencies? Skills Leadership Urgency – Do They Have and Understand the Expectations?

SWOT Strengths Weaknesses Opportunities Threats

Recovery Plan Tighten the Focus – Market – Operational – Fiscal Control, Fiscal Control, Fiscal Control Baby Steps…….Take the Gain!

Value Stream Mapping A simple and powerful tool to model specific, finite business processes. The core activities: – Current Condition – Ideal Condition – Target Condition “5 Whys” --- & --- “Ya But’s”

Organizational Expectations “They Go Both Ways” Instill Honesty by Being Honest Let Employees Know What is Going on & Expected! – Most Times They Already Know Better Than You Do. Employees Want & Deserve to be Well Managed Clearly Communicate Expectations Verify that Employees Understand the Implications of Failing to Meet Expectations – Individually – Collectively

Change Management Behaviors and Roles Will be Changing People Are Nervous Trust is Key Training and Clear Communications are Pivotal Rescue Initiatives Are Not Optional

Management Behavior Do Nothing Immoral, Illegal or Unethical Appropriate Transparency: – Financial – Suppliers – Selected Customers – Employees Maintain a Positive Outlook but Don’t Underplay the Risks!

Comments Recovery is a Management Process Recovery Benefits from Transparency Recovery Requires Functional Integration Recovery of Business Performance Benefits from Visual Monitoring Questions Contact: Cell: