Do you want to become organized? Do you want to spend less time retrieving documents, files or items?
The answer is to follow the (5S) program. Originally designed by the Japanese, the program is a simple road map to get organized and save time looking for tools, files, spare parts, etc... Lean is about eliminating waste in processes and one of them is time spent looking for things! So What is a Five S Program?

A Five S program is usually a part of, and the key component of Visual Factory (Workplace) Management (VFM). And 5s and VFM are both a part of Kaizen -- a system of continual improvement.
5 S focuses on creating visual orderThe Five S program focuses on having visual order, organization, cleanliness and standardization. The results you can expect from a Five S program are: improved profitability, efficiency, service and safety.
The principles underlying a Five S program at first appear to be simple, obvious common sense. And they are. But until the advent of Five S programs many businesses ignored these basic principles.

What types of businesses benefit from a Five S program?
Everyone and all types of business benefit from having a Five S program.
Improve manufacturing with a 5S ProgramManufacturing and industrial plants come to mind first, as those are the business that can realize the greatest benefits. However, any type of business, from a retail store to a power plant -- from hospitals to television stations -- all types of businesses, and all areas within a business, will realize benefits from implementing a Five S program.
A clean, neat, arrangement of the workplace which provides a specific location for everything, and eliminates anything not required.
 5 S is the starting point for ALL improvement activities! Each S stands for a Japanese word. The following are the words:
 1 Seiri Remove unneeded /Sort

2 Seiton Arrange for ease of use /Store
3 Seiso Cleanup campaign/ Shine
4 Seiketsu Maintain the system /Standardize
5 Shitsuke Make 5S the Culture / Sustain

 Good Luck with your 5S program.
 

Is a written policy report considered a solution to occupational health and safety issues? Does management commitment to safety make a difference?
Before we answer those questions, allow me to state few useful statistics:

• - Nearly 50 employees are injured every minute of a 40-hour workweek and almost 17 employees die each day (USA).
• - According to Occupational Safety and Health Administration (OSHA, USA), nearly one/third of all serious injuries and illnesses stem from overexertion or repetitive motion. These are disabling, expensive injuries.
• - Establishing a safety program to prevent injuries is not only the right thing to do, it is the profitable thing to do.

Based on the above few useful statistics, it is safe to assume that Management not only has an ethical and moral obligation towards organizational Safety, but also a "dollar and cents" obligation. Studies have shown a $4 to $6 return for every dollar invested in health and safety within the organization. Therefore, it is essential for management, top management in particular, to demonstrate not only an interest but also a long term strategic commitment to protect every employee from injury and illness on the job.
Let it be clear that management commitment to organizational health and safety will occur to the extent each member of the management team clearly understands the positive effects and benefits derived from that commitment including the direct and indirect costs of accidents. As studies and analysis of accidents have shown, accidents are more expensive than many managers realize. The reason being, there are many hidden costs that are not truly apparent and obvious. The direct costs such as medical bills, indemnity may be covered by workers' compensation claims. However, the hidden cost will encompass the cost to train and pay a replacement employee, the cost of downtime of equipment, and also the cost to repair the damaged machinery or tools or properties. It makes good sense to reduce the costs and risks associated with accidents, whether they cause injuries or not. Therefore, having a "visible" safety program will definitely help setting the stage for a much improved employee attitude towards such a program. To achieve this goal, management must put in place a roadmap as well as an implementation to help to convince employees that the program is a real concern and not just another administrative action to meet some government regulations.
Be safe.

Every project which have status FAILED have some or many reason for failed. Project managers should identify the possible root causes of the potential failure and take corrective actions to prevent the project from falling through the cracks. The following are some of the steps that project manager should look at very closely:

• Is there flexibility in the triple consrtaints of the project (scope, time and cost)?
• Is the leadership committed to the project and willing to take extraordinary measure to turn the situation?
• Is the right people in place?
• Is the business case still strong?? If not, how can we stengthen it?
• Do we have appropriate change management in place??
• Are the communication channels function properly?
• Is the risk management plan up to date??

These are some of the steps that are recommended to start examining in order to bring the project back on track.

  From experience, the following are the TOP10 causes of Project failure

1. Lacking Sponsor's Involvement/Ownership
2. Absence of a Project Management Methodology
3. Scope Creep/Unrealistic Expectations
4. Poor requirements
5. Lack of project plan or monitoring of the plan
6. Inadequate project communications
7. Absence of risk management
8. Poor analysis
9. Incompetency of project manager
10. Change of economic or political climate
Meirc offers a number of project management courses that deal with the above top ten reasons for project failures. These training programs will provide the participants with the fundamental knowledge and equip them with the necessary tools to manage their projects effectively.

There are many tools that quality professionals can use. Experience and practice can help professionals pick the right tool. Some of the tools used are:

Affinity diagram Organizes a large number of ideas into natural relationships

Fish bone diagrams Determines cause-and-effect relationships

Tree diagram Breaks down broad categories into finer levels of detail

Matrix diagram Organizes knowledge in a matrix format to show the relationship among groups of information

Matrix data Analyzes matrices (often replaced in this analysis method list by the similar prioritization matrix)
Pareto Diagrams: Helps focus on the vital ares of issues
 And many more... I can go on and list over 180 tools. 
 
What tools are you using today to help your organization jump start your improvement projects?
 In our offering  Total Quality Management (TQM) Tool Box for Continual Improvement session we get to review many of these tools and the principles behind them. Check this link.
 
Good Luck!

How do you measure the impact of your Sales and Marketing decisions?

Sales and Marketing people take decisions all the time. This might seem normal, but how would you evaluate and measure the effects of your sales and marketing decisions? If you don't, sometimes the output might turn to be catastrophic on profitability margins, the product/company image, inventory levels, etc.

Universities have always concentrated at the under graduate and on the post graduate levels on scattered courses relevant to different arrays of concentration (accounting, finance, marketing, HR, etc). Rarely are the academic institutions who promoted the idea on how to think in a "transversal" way? For example: How can marketing decisions be measured or validated in financial terms? How can HR decisions contribute to improving sales revenues? In real life situations, this is all you need to understand and do!!

Sales and Marketing Executives need to master two different disciplines to be able to manage in difficult and turbulent times. Besides your Sales and/or Marketing abilities, statistical and financial analysis, are vital tools to measure and implement different strategies, track your historical activities and monitor the present ones. Also, it will not be impossible to analyze trends and forecast for the future accordingly. You do not have to be expert in the said fields, but you definitely got to master some metrics relevant to these two disciplines. Otherwise, you will be managing in the dark...

Lately, and due to the urgency and importance of the matter, our consultants have put up a program that combines both Sales and Marketing decisions with financial reporting. You will be able to identify your top current accounts, brands, and products periodically by volume, profitability, and percentage. Trend analysis by territories, sales reps, profitability, etc is on the menu too. You will be also able to build your own commercial model using Excel dashboards. With our new "Mastering Sales and Marketing Financials: Planning & Modeling Techniques" training program, you will have all the information you need to know at your fingertips. It will be a double opportunity for you to master Excel sheets and pivots. You'll be on the edge of your seat - not slumped down in it!!

A Loyal Customer is a Good Customer!

(... Or is he? A brief look at the Customer Profitability Whale Curve)

Companies are spending so much effort and money trying to create loyal customers that any dissenter to the assertion made above runs the risk of being ridiculed, labeled an ignorant and of having her voice being quickly smothered before infecting anyone else with that heretic thought.

In my training program, "Customer Loyalty: Measurement and Strategies", I contend that the main criteria of a "good" customer is profitability. Customer loyalty is something companies strive for hoping it would translate indubitably into fatter profits. The idea, it is hoped, is to transform as many of our customers as possible into loyal customers assuming they would become more profitable in the process. Oh, the disappointment when wider and brighter customer smiles do not necessarily mean more black ink on the P&L. What could have possibly gone wrong? Didn't our talented managers see that in the mad rush to maximize customer loyalty many of the expenses they assumed would remain fixed, or semi-fixed, spiraled out of control negating all the benefits of the higher revenue figures?

Well, how can they? To be fair to these managers, traditional accounting reporting methods provide no tool to measure and track the real costs of enticing an individual prospect or customer. GAAP methodology does not provide for aligning actual sales and promotional costs by customer. This becomes the realm of Activity Based Costing and CRM, and is a more complex and creative analysis and reporting process than many companies realize.

What's more, who could have suspected that this huge and very loyal customer that we've been catering to for the past decades was the single largest loss making account we ever had? Research indicates that, due to the inability to track real costs per customer, loss making accounts are more common than previously thought. In addition, if one is to graph the cumulative net profit (or loss) generated by a company's customers (listed from most profitable to least profitable), the resulting curve (the "Whale Curve", see below) would show that:

• a few customers generate most of the profits,
• most customers hover around a neutral zone, not really affecting the overall profitability of the company,
• and a few more customers ... the bad ones ... are actually a drain on profitability, actually causing the company to lose money.

To make things even more interesting, it was found that those that lost the most money were among the largest accounts a company had. But, in a twisted kind of way it actually makes sense: to really affect the profitability of the company, whether positively or negatively, an account has to be big! Actually, the larger the account, the more likely a company is to give in, allowing it special treatments and prices reserved only to the "loyal" customers and, literally, spoiling it.

Before closing this article let me make one thing clear: I am not advocating a war on customer loyalty. What I am advocating though is marrying customer loyalty intelligently to the perennial concept of customer profitability in order to create one of the most powerful elements of a company's success. These concepts and more are covered in my customer loyalty training program. However you are also welcome to comment and discuss this article right here on this blog.

In the G-20 summit (the richest 20 countries on this planet), and in the midst of the financial crisis the world was facing, leaders were discussing accounting rules!! Not debits and credits! I don't think they go into that detail! But what they are demanding from the accounting profession is to come up with one set of accounting rules that all companies can use regardless of their location. OK,... what does this have to do with the financial crisis? And how would one set of accounting rules help in solving the problems of the world's economy?!
Let's go over the definitions first: IFRS stands for International Financial Reporting Standards which are established by the International Accounting Standards Board (IASB). GAAP stands for Generally Accepted Accounting Principles which are established in the US by the Financial Accounting Standards Board (FASB). Basically, these are two sets of accounting rules dominating the accounting profession globally with few differences ... few but might amount to millions of dollars!
An example of the differences is in the methods allowed in inventory costing. Last-In First-Out (LIFO) is allowed, and widely used, in the US while it's NOT permitted under IFRS - most companies applying IFRS either use Weighted Average or First-In First-Out (FIFO). In one of our accounting training programs, we apply different methods to the same data and we notice that net income under FIFO is higher by $1.5MM had we used the LIFO!

 As the world is growing to become one big global economy, the need for uniform accounting standards across different countries has risen. To put it simply, let's assume I'm a bank in London and I only have one loan to give out, and two companies have applied for this loan: one company based in NY and a second based in Paris. I would not be able to easily compare the financial health and performance of the two companies because each one is using different accounting rules.So, how would one set of accounting rules help in easing the effect of the financial crisis?

Two words: reduce costs! "Most of the demand for international standards can be traced back to the concept of reducing costs - for owners, creditors, preparers, analysts, and the general public". And when costs are down, cash moves more freely (equity and debt financing) and business transactions across several countries become more feasible.

Since 2002 onwards, IASB and FASB have been working hard to converge those two sets of accounting standards, attempting to eliminate differences, as well as to improve the accounting rules. Slowly but surely, many countries are moving away from applying GAAP and towards adopting IFRS (e.g. European Union, Canada, India, etc.). Recently, FASB has allowed foreign companies listed on US stock exchanges to publish their financial statements using full IFRS and eliminated the requirement for reconciling their financials to US GAAP.

In Meirc, this year we are offering an accounting program that will highlight the differences between IFRS and GAAP. Here is the link if you are interested:

IFRS Versus GAAP

1) Niswander, F. and Conover, T.  (2009). "International Versus U.S. Accounting: What in the World is the Difference?", AICPA, p 1-8.

What do you think? Do we really need one set of accounting standards? If you are an accountant, will you be affected and how?

How often are you asked to prepare reports? always!? and I bet one of the ways you retrieve the data is by importing or copying the raw data from your system and pasting it to Excel. then you insert rows, columns, move cells, highlight cells, delete some unneeded data, then...you are lost and you start over!!!

Pivot Tables comes to the rescue. I can truly say that Pivot Tables is the most efficient tool EXCEL has developed in the early years of 1990. This tool, once you know how to use it, professionally, will transform the way you manage, analyze, and report your data. I, personally was able to prepare a comprehensive budget variance reports, by department, in few seconds, among many other dynamic reports.

The newest news is Excel 2010. It comes packed with enhanced Pivot Table tools. Have you tried Excel 2010 yet?

This is a first in a series of articles on Meirc's site related to Health, Safety and Environment (HSE) in the workplace. Also be sure to join the group "Together for a safer workplace" where you can share your opinions, experience and knowledge about the topic.

To Be Safe or Not To Be Safe...? This is the Question.

To be healthy you have to be safe and to be safe you have to prevent injuries of all kinds. Injuries alone cost businesses hundreds of billions of dollars yearly ($170 Billions in USA in 2007). Are you surprised? Are you afraid to get caught by surprise? Are you an employee or an employer? Whatever the answers to those questions may be, you better be safe than sorry.

Safety improvement starts with a change in the mindset. And that change lies in every one of us, be it an employee or an employer. What we learned is that people (employees) alter their behavior in response to safety measures, but everyday risk will not change, unless the management system (employer) is capable of motivating and allowing employees to alter the amount of risk they are willing to incur.

In his book Quality Is Free, Phillip Crosby notes that to eliminate the waste (employees getting hurt), to improve the operation (incidents), and to become more efficient, we must concentrate on preventing the defects and errors that plague us. Moreover, Crosby makes a statement that is worth repeating to let others think about it "people are conditioned to believe that error is inevitable. We not only accept error, we anticipate it". Therefore, management plans for these errors to occur. It sounds as if human beings have a "built-in" error factor.

Improving health, promoting safety, and minimizing injury occurrence are the responsibilities of all of us in the work place. We must all combine our efforts and our energy to make the work place a safer place, an environment where we can all attain our goals and accomplish our objectives.