Time - is it really our greatest asset?

by Mark Nicholls, Managing Director

Management Guru, Peter Drucker once stated that

Time is the scarcest resource; and unless it is managed, nothing else can be managed.

There was a discussion raised in a LinkedIn discussion forum recently (let me know if you want to know which one). It asked a question about time, time management, and in particular time recording of projects.

Justin asked "In your organisation do you cap project team time reporting to the employee's standard available hours, or allow staff to report additional hours worked as 'over-utilisation'?"

There were a number of excellent responses.  I said:

Time reporting supports a number of management reporting objectives such as costing, utilisation, work volume validation and planning, project stress and morale levels.

Of course we all want all of these in every project. But whether this is practical for an organisation is another matter. Considerations include: what happens now, what the culture is, what the management maturity is, who in the organisation will support changes to time capture.

Remember that the project is there to do some change for the business. Taking on an unexpected battle of introducing extensive timesheeting for the sake of having perfect management information in a project can become a big distraction and sometimes just does not make sense. This is the judgement only PMs (and Sponsors) can make.

Hayder asked "I have heard concerns from some HR folks that in the US, they don't like to capture or document more hours than 40 for salaried employees, due to fears that they might get sued. Has anyone else dealt with this argument?"

I replied:

I have heard that argument here in Australia...it is a real one. If company policy says people cant work more than a defined nr of hours, yet employees insist on doing so (and perhaps feel obliged to do so) then it can create this internal conflict within an organisation.

This is a perfect example of project delivery pressure placing a test on the capacity of an organisation to work effectively under certain conditions. Projects are the ones who typically surface these types of issues in organisations and can get distracted/delayed/impacted by them.

This is where a smart PM chooses their battles.

Paul made some points about the need for PMs to have to worry about overtime anyway, saying "It's not project managers' jobs to track overtime, although they must be sensitive to the issues when assigning tasks. It's the job of the line managers to be concerned with overtime. It's the job of project managers to track effort - all the effort.

The executive management of the organizations you serve should easily understand the absolute requirement to track all effort."

I countered that:

Where overtime impacts project costs, which in some organisations, they do, then it is an area that could be of interest for PMs, in reconciling project costs / average rates. I have seen organisations where overtime costs do land on the project. This can skew average rates for some teams quite markedly.

I agree with the need and the theory re: capturing effort levels...however there are also cases for PMs where the organisational practices and culture means that the executive management should but doesnt necessarily understand this requirement. Hence an additional challenge for some.

Paul then talked about the need for overtime (or the likelihood of it) to be taken into account during project planning. Paul also referred to the deadline imperative and this being one of the most critical factors, and therefore costs can become less of an issue in some organisations.

I agreed, stating that:

This is an excellent demonstration of where organisational costing practices need to be known during project planning. Often they are not, or sometimes they are changed for expediency within an organisation with little regard for the impact on the very measures they are keeping PMs accountable to, i.e. performance against budget. Of course this could be both in favour or not of the PM. Either way, it makes the measurement of project financial performance something that is not always a simple measure.

And yes, deadlines are deadlines, but as you know, we can never uncouple that from cost...and as PMs we sometimes need to be putting cost/time/quality options back to the executive team. It reminds me of the old PM saying on the choices available....cheap, quick or high quality...pick any two.

Once spent, be it time, money, or quality of product, which one can you recover and get back.  I would argue that you can create more money, you can create more products but you can never create more time. This is the scarcest resource of them all.  Use it wisely.

Strategic Business Planning: Casting a Very Wide Net

by David Ekert, Senior Consultant, Information Professionals

 

I just did a Google search on "Strategic Business Planning" – and got 88.2 million hits! Now, I haven’t read every one of them, but I bet that they would fall into one of these categories:

• Definitions of strategy. Which would be contained in:
• Copies of academic papers on the subject. Which would lead to:
• Arguments about these academic papers. Which would be described in:
• Course notes from universities. And finally:
• A fair percentage from consultants who can advise you on how to best develop your strategy.

Perhaps it is obvious, but I like to keep an all-embracing view on strategy development and management, so we dont lose the context on where something fits.

 

Does Strategic Planning always go well? Of course not. And in my opinion this view is sector-agnostic, in that I have seen the best and worst of planning and implementation in both public and private sector worlds.

 

I have been involved in organisations who do this very well. In these organisations, everyone, and I mean everyone, knows what the organisation stands for, where it is going, how it proposes to get there, and how each person contributes to this. There are direct links from the highest level of strategic planning through business unit plans to individuals’ performance agreements.

 

I have also had experience with organisations where it is not done well. One of these organisations worked hard at it, although missed some key aspects of success. They ran through planning sessions every year, dutifully described projects to achieve strategic objectives through the year and then produced a report every three or four months on how they were going, with lovely colour scales. The good bit – if a program hadn’t started yet, it got the best green rating, because (stay with me here) if it hadn’t started yet, it wasn't late finishing (yet)!

 

As you may be able to tell, I enjoy talking about, discussing and understanding strategic business planning. The whys, hows, whos, who cares etc are all of interest to me. One topic close to my thinking is that the usual targets of marketing and sales, while vital, don’t tell the whole story. There are so many areas of consideration, like the dollars, the people, the supply chain, risks.

 

As a CPA (Certified Practicing Accountant), although working more in the IT, Planning and Strategy, and Program Delivery worlds these days, I do recognise the integral nature of finance and budgeting to every aspect of an organisation, and therefore to Strategic Business Planning.

 

And what about ICT (Info & Comms Technology)? Every one of the above areas I mentioned, in fact almost every area of business is now touched in some way by ICT. But it is also an area where it is treated in so many different ways from a Strategic Planning perspective, sometimes ignored, but I would argue, rarely integrated well.

 

Is it coming a time where we let ICT out of the back office and recognise the part that it plays in delivering real value to a business? And in fairness can also have a significant capacity for creating risk?

 

And how does that impact stakeholder involvement across the business or ensure the right perspectives is flowing into the planning process? Perhaps those thoughts are for another time.

SCOPE Spring Conference - Chicago - Report 3

What is the trend for the best performing Supply Chains, today and into the Future? - by Mark Hewitt.

We finished off the last report with “a given” to all in attendance that change was necessary, and that some part of the organization back home was an “ugly baby”.

After all, we all have the rogue spreadsheets used outside the main systems and this should be acknowledged. The delegates were educating themselves, ensuring they were “current” in what was available and seemed to fit the criteria for the talent that David Ecklund identified for transformation to be possible.
Along with looking to where organizations are going, the conference presenters were mindful that our daily demands and immediate concerns can’t be ignored. I talked to delegates like Mitch, Charlie and many more who all appreciated the need to change and allocate some time to build a strategic plan to get there, whilst the tornado of the today’s issues are attended to.

Catching the bus back from Wrigley field with Brandon Jobe from AIPC, I was fortunate enough to confirm that the S&OP implementation success he presented was backed and demanded by the CEO. The achievements of doubling stock turns, improving forecast accuracy from 51% to 76%, reducing obsolesce from 18% to 1.8%, etc wasn’t an overnight success but rather an ongoing part of running their business. They had been at it for 6 years.

AND MOVING TOWARDS THAT FUTURE
So what are the lessons and what does the future hold?

Firstly, today’s leaders need to see their Supply Chain as a driver for business outcomes and not purely as a function. They also need to be patient and persistent, understanding this is a journey and an evolutionary process.

For many organizations the next step is to focus on S&OP. That means, connecting the silos and forming teams lead by the Supply Chain to bring together the customer facings departments with the commercial interests as well as the operational engine room responsible for making it happen.

Common overall business objectives and shared metrics like forecast accuracy are the way of the future. The successful organizations of the future will move from reaction to customer facing initiatives to orchestration of market demands with internal collaboration. This is the challenge for progressive Supply Chain people.

Finally, the key to success is going to be how well supply chain practices, processes and systems are integrated into the complete business picture. Better planning and satisfying the needs of the customer across the organization through S&OP type activity will bring this together. Essential for success will be the development and implementation of the strategic plan to help them get there. This is what will keep the process, people and technology efforts synchronized.

Please contact me for any more information - Mark Hewitt.

SCOPE Spring Conference - Chicago - Report 2

What is the trend for the best performing Supply Chains today and into the future? - by Mark Hewitt

I attended the SCOPE conference in Chicago with an expectation to discover the next big thing. Was there a new gadget or technology that was going to revolutionize business? Perhaps something like barcoding was about to be superseded? Was there a breakthrough and something everyone must be doing for their organization to remain successful? What I learnt wasn’t what I expected. The more I reflect on the education sessions, the one on one meetings with exhibitors and time spent with other delegates, the more I realized there is a common direction to be embraced. 

I asked several delegates, “So why are you here?” and the answers were varied:

• To introduce barcoding back into my Distribution Centre (DC )
• We are evaluating a new Warehouse Management System (WMS)
• I’m looking at slotting
• To find a new transport management provider
• To get current with what is out there

Over the two days, the questions were addressed although the answers weren't what was expected.

WHAT WE DISCUSSED

The scene for the conference was set by Roddy Martin from CCI, Steve Sigrist from Newell Rubbermaid, Scott Mason from Stepan Company and David Ecklund from the University of Tennessee. With a show of hands, the delegates confirmed that, for most, their journey was somewhere between running projects for improvements to the early stages of Sales and Operations Planning (S&OP). The end game being a complete end to end Supply Chain, where demand is shaped rather just met. Across the journey the enablers of talent and change management capability were identified as the areas that “keep the organization's leaders up at night”.

S&OP, is where all players within the organization regularly come together with one goal and focus on business outcomes rather than traditional functional results (breaking silo thinking). Planning is underpinned with information. Driving the forum is the Supply Chain people, since they are more tuned with the management of an analytical basis for discussion (that’s what we do) and also having direct control of the capability to satisfy demand. In a Utility business, the customer facing component (which is Sales for many other industries), the forum would consist of members from the Program of Works as well as Field and Project Leaders.

The need to continuously adapt to how a business is conducted was uniformly accepted and driven by, amongst other influences, globalization and the technology used today for how we communicate and interact. I talked to Paul Schmuddle from Gateway Express whose business was created by recognizing both of these influences. From Flextronics’s Ronald Tarter presentation on the Global Marketplace, I learned more about sourcing across many emerging Asian countries.  Although China is still the dominate manufacturer it isn’t always the best choice.

HOW IT WAS RECEIVED

It was “a given” to all in attendance that change was necessary, and that some part of our organizations back home was an “ugly baby”.

But what did that mean for our current priorities and what does the future hold for how the Supply Chain will best serve the organisations of tomorrow?  Report 3 will continue my own journey of discovery at SCOPE Spring.

SCOPE Conference in Chicago – First Report

Mark Hewitt’s first post covers an update from SCOPE regarding Technology in Supply Chain. Why is this important, and what should and could you consider if you have an eye on Supply Chain improvements?  The audience is particularly for Utilities, Transport and Distribution providers, and Asset intense industries, including resources and mining.

SCOPE Spring brings together many different exhibitors covering all aspects of technology used in the modern Supply Chain. Each can be grouped into one of 5 categories which targets specific applications and are adopted by various industries to suit the nature of their logistical challenges. This report introduces these categories and what they are about.

1. Supply Chain Modeling

What is it – Supply Chain Models maps out all the physical locations within a delivery system from raw goods/manufacturers through warehouses and on to the customer. Scenarios are applied to identify improvements in efficiency and reliability.

Who does it – Companies include Barloworld and Llamasoft

Where is it being used and why – Modeling is used to review and make strategic decisions on how best to deliver and service clients.

2. Transport Management Systems

What is it – Transport Management Systems (TMS) are used in the routing and scheduling of various transport modes to drive improved efficiency, consolidation and utilization of resources.

Who does it – Companies include Transwide and Agile Pacific

Where is it being used and why – Manufacturers and Suppliers with large numbers of deliveries and collections helps their efficiency in their transport functions using both internal fleet and transport providers.

3. Warehouse Management Systems

What is it – Warehouse Management Systems direct selection of locations for picking and putaway activities within the warehouse.

Who does it – Companies include Highjump and Tecsys

Where is it being used and why –WMS is needed for large installations and reduces the dependency on staff in product knowledge and identifying where to find or put materials to fulfill orders. Layout within the warehouse is determined based on placing like items together with the fastest moving items being located for the shortest path to dispatch or staging areas.

4. Automation Tools

What is it - Automation covers a wide variety of labour intensive activity in warehousing and transport. Included are scanners, robots, sorting and storage equipment that eliminate manual handling and/or administrative effort.

Who does it – Companies include Cipherlab and Scottech

Where is it being used and why – Automation is applied in any activity requiring human effort. Information such as details of a delivery or receipt of supply is captured and processed instantaneously. Mechanical equipment replaces the labour and achieves velocity and accuracy throughout logistics activity.

5. Reporting and Analysis Tools

What is it - Numerous tools are available to show operational efficiency, compliance and manage risk. Graphic summaries and reports present key information to assess performance.

Who does it – Companies include Tableau and Pelyco Systems

Where is it being used and why – Successful Supply Chain Managers find it essential to monitor and measure their business activities to ensure targets are met and to identify areas where attention is needed.

So why all this technology?
The answer is simply to move products more cost effectively, accurately, minimize the labour intense activities and provide a better service.

Business strategy and analysis is critical in identifying the benefits available to your business and the critical task of selecting the right fit. Then it is on to the less glamorous task of making the change to your business and with your people for your organisation to continue to be successful.

SCOPE Report Two – Will look at the presentations that provide some insight into what is happening in today’s Supply Chains.

Skeptical of political and corporate leaders...is there a connection?

Is there an increasing gap in expectations between what the community expects and what our political and business leaders provide?

A recent report published by the Australian Institute of Company Directors and authored by Steven Cole, an experienced director, titled "Mind the Expectation Gap – on the role of a company director" suggested that this gap is seriously impacting upon the ability for Directors to perform their role, and is impacting on national competitiveness.

This gap is caused by confusion due to the following:

• By legislators, “who respond to populist electorate pressure and continue to over-regulate business activity – especially in the area of director liability – with increasingly prescriptive and pernicious laws, many of which offend fundamental rule of law principles that apply to the rest of the community”.
• By regulators, who often have their key performance indicators based on their number of successful prosecutions, rather than a reduction of cases to prosecute due to good corporate practice.
• By the media “which, in response to the insatiable public appetite for the notorious and the titillating in order to sell media product and air time, is inclined to simplify, generalise and sensationalise occasions when corporate shortcomings do arise”.
• By the public through its need to attribute blame for that which befalls it and which sees company directors as “the souls to damn and the bodies to be kicked when a corporate is involved”.

Cole noted: “The performance of corporations and their boards is usually assessed and judged by regulators, courts, media and the public with the benefit of hindsight; without time constraints; and with access to all the information possible that may have been

relevant to the judgment made and its probable consequences. Hindsight is truly 20/20 vision, but hindsight 20/20 vision is not available to the directors when the decisions need to be made."

This publication warns that if the expectation asymmetry between the law, best corporate governance practice and society’s expectations is not addressed, primary consequences will include overly defensive corporate practices focused on compliance

and liability protection, rather than productive and prudential entrepreneurship; too much valuable boardroom time being spent on conformance rather than performance issues; and a reluctance among skilled and able business leaders to assume public directorial office due to unreasonable liability and reputation risks.

I would contend that this phenoma is a good reflection of what is occuring, and that this phenomina is as true for Directors as it is for Politicians albeit the balance of issues may vary.  That is not to say that Directors and Politicians dont make mistakes...in that sense they are as human as all of us...but as a nation, are we creating the best conditions for their success?  And are these gaps in expectations good pointers as to where the problems lay?

Are Government Systems Implementation More Difficult

With systems implementations struggling in both the private and public sectors, is there really any difference to the challanges associated with large scale IT based change.

We would argue, yes, but just as there is different areas of risk and challenge associated with every business and to some degree different business sectors.

Some of these factors that may impact upon increase risk/challenge for government includes:

• Less clarity on objectives and measurable outcomes.  eg. does ROI count as much as other factors in government, and how measurable are these other benefits?
• Leadership.  What can be associated with the above is the question of strength of leadership.  If the outcomes aren't clear then how can the leadership be so....and vice versa?
• Access to resourcing and skills.  Government can be impacted by increased constraints in gaining access to the right skills, sometimes very unique skills in driving change dont you think?

There is a few others too that may apply.  We may expand and discuss this further down the track.