Archive for Uncategorized
Identify your Marketing Constraint
Posted by: | CommentsAs I mention in a previous post: Every System, typically has relatively few constraints. However, to operate at maximum efficiency, the limiting constraint must be identified. Five Steps of Continuous Improvement help identify and improve the constraint. How do I correlate the Marketing Hourglass with the Theory of Constraints? TOC uses the weakest link, a chain as a visual in working with throughput.
Below, I have outlined my basic understanding of the Theory of Constraints from my readings and experience. If you would like to dive deeper into this subject start with the AGI-Goldratt Institute website and there is whole slew of books, trained consultants(Jonas) available throughout the country. I believe the Theory of Constraints principles are a requisite for continuous improvement.
Before starting with the 5-steps, there are two prerequisites:
1.Identify the Goal of the System /Organization
2.Establish a way to measure the progress
The most common goal is to make money and that should be our overall purpose. It sometimes can be overlooked in increasing sales, client retention and many other factors. Many will argue but increase sales can hide many problems. The companies that fail the quickest in a recession are the ones that were living on growth without really generating income.
There are several ways to measure progress with the most common being Throughput, Operating Expenses and ROI. Going into too much detail about how to use the ratios is beyond the scope of this blog. The important thing to remember is that TOC methodology values Throughput and it as the best means to fuel growth. TOC then looks at Inventory(Prospects) second and operating expenses third. So our concentration will be optimizing the Throughput of the Marketing Hourglass utilizing the Five Steps of Continuous Improvement :
Step 1. Identify the system’s constraint.
Step 2. Exploit the system’s constraint.
Step 3. Subordinate everything else to the above decision.
Step 4. Elevate the system’s constraint.
Step 5. If a constraint is broken (that is, relieved or improved), go back to Step 1. However, don’t allow inertia to become a constraint.
Starting at the beginning:
Step 1. Identify the system’s constraint.
The system’s constraint is the phase or part of the phase that resource which limits the output of the entire system. Start following your actions and you may find out that your bottleneck is not just getting more prospects in the door. If you can monitor actual numbers, you may be amazed at what is happening to your prospects(inventory). This is where we need to identify the constraint , where is your constraint?
The easiest way in a manufacturing analysis is to walk around and see where the work is piled up. It is not that much different in a marketing process. Walk around and see if there is a pile of sale presentations waiting to go out. You may find people waiting on financing to be approved. Maybe, inconsistent delivery of Newsletters and so forth.
If you have done a good job of building your marketing hourglass, you may be surprised on how easy it is to find. You may be so lucky to be able to eliminate parts of a step, not the entire step. Start internally, as you gain internal control you will also gain the respect of your customers and vendors. This may help you significantly when you ask them to assist you in later improvement needs.
Our Next blog will continue with step 2 and 3.
Related Blog Posts:
Using the Theory of Constraints in Marketing
Using your Marketing HourGlass to determine your Constraint
Business Turnaround – Do it with Lean
Posted by: | CommentsIs anything working? Are you in trouble yet? Is it you, or is it the economy? In a past blog post, I went over this issue and the fact of the matter is, IT’S YOU! Why? You are the one that has to survive, it is YOUR RESPONSIBILITY. Without change, things will stay the same, so how do you go about initiating change?
On an upcoming Business901 podcast, I discussed with CEO Bob Wiener, how PAS Technologies climber from near the bottom of industry rankings to the top. What significant change did he make to leapfrog the competition? He invested the 1st week of his leadership in Lean training. An old saying that I use repeatedly: How many good ideas get wasted because of a poor plan? I think Bob reinforced that adage once again.
Most professionals today have not been involved in a turnaround. They do not realize that turnarounds require a different set of skills and management techniques. My methods do not work for all and are just one way of doing it. You must decide on your course of action. I have been involved in several and failed at one of them, the results that I had were all different. I broke companies apart, sold some and worked through some. They were all different, with different goals and different results. And bottom line is I lived to write about them.
Now, with my experience what would I do if I was involved with one today? Though PAS did not create the model, they executed it which is a much greater feat. My model may look a little different than how PAS did it, but it is similar in the respect that I would walk in and create a Lean System.
Most people don’t respect the fact that you have to document what you are doing, precisely. It really is like starting on a journey without knowing where you are at. If you would try to get directions from Google and typed Indiana in instead of Indianapolis, you may be only 1-hour or 4-hours away.
Your metrics play such an important part. How are you going to measure success? What in the short term will allow you to survive and in the long term build a business? Measuring simply by results is just not enough in today’s world. Using Lean Metrics measured by drivers are at the heart of making your plan effective.
Lean is a system focused on and driven by customers. Optimizing the value stream from their eyes and in an efficient process takes your processes to a level not experienced before. Review your past sales and processes that are performing well. Determine why and what may be different about them. This may help you identify a value stream much more quickly.
Mapping the Future State is where we start seeing it all come together. This is the step everyone typically wants to jump to immediately. As a result, it can be easily abused and a lot of waste can be left in the process. We make plans and instead of having a sound basis, we use instincts and tools that are not directed and often based on what I call “Tribal Knowledge.”
Kaizen is the Japanese word for continuous improvement. It is all about idea submission, not acceptance. Kaizen has three steps. First, create a standard. Second, follow it. Third, find a better way. Create Kaizen events on a weekly basis to improve on a particular area or metric.
A great learning tool is to start with a task that is working well, has little waste and just walks through the process. After you see how the process works, take one that has what you perceive a lot of low-hanging fruit. Walk through that process. The secret I believe to successfully implementation is trying to do too much at once. It is a journey made up of multiple events or Kaizens.
Related Post: Are an Ideal Customer for a Turnaround
Are these your marketing tactics this year?
Posted by: | Comments“NEW” tactics used this year
- Create a new website. Take outdated website and improve it for better navigation and SEO. Create a storefront on site to let your customers buy products online.
- Test one new advertising venue every month. Track results and when you find one that works, expand it.
- Advertise your business in local newspapers and magazines in your area and include coupons as a tool to drive customers into your store.
- Use your database, start doing a better job collecting names, to aggressively market to your “customers” with a new professional style e-mail campaign driving them to your new website that has a storefront on it.
- Develop a loss leader campaign. This campaign will set to or three items at significantly lower cost than others. This will drive traffic to your store and while customers are there they will purchase other products.
- Develop stronger strategic and referral partners through networking.
- Place large banners, neon signs and other props outside your store to draw attention.
- Run sales promotions on a regular basis. Customers love to purchase items on sale and if you get a reputation for having great sales, it can generate a lot of repeat business.
- Use Social Media, Facebook and Twitter, to blast message to public for free.
I could tell you to call me if this is not working, but you may have already thought of that! If it is working, definitely call me because I would be thoroughly amazed!
