Ask Andi: Whose responsible for operational planning? Policies and procedures are being ignored. People do whatever is convenient. The shop is a mess. Our trucks are worn out from careless driving. Inventory is left lying around and gets lost, damaged, or outdated. Damaged goods have to be thrown away. It makes my blood boil. No one seems to care that I’m paying for the inefficiencies and losses. What can I do?
Thoughts of the Day: Operational planning provides a clear picture of tasks and responsibilities. Operations are different than strategies. Operational planning defines roles. Figure out who’s in charge. Assign everything to someone – from inventory to work hours to trucks. Set goals. Single out the worst offenders, and make them accountable. Reward the high performers.
Operational planning is important
Operational planning helps you move forward with the day to day tasks. Strategic planning is a roadmap to follow from where you’re now to where you are going. If the company is to be profitable, the people who touch the customer, who assemble products or provide services, must do two important things. One: they must improve the customer’s world. And two: they must deliver efficiently.
Delivering efficiently includes using the least possible amount of time, energy, and materials. In other words, focusing on the conservation of resources. Improving the customer’s world means operating as close to error and offense free as possible while delivering what the customer expected. Make sure that your people understand that definition, and buy into it.
Take a look at your organization’s structure. Everyone can’t report to you. The optimum # of direct reports anyone can have is 6 – 8. The more diverse the functions reporting to you, the fewer direct reports you should have. If you have sales, finance, marketing, human resources, and operations reporting to you, you may max out at 5 direct reports.
Breakdown the supply chain
Put someone in charge of operations. You might be tempted to say you don’t have anyone strong enough to do the job. With everything else on your plate, you’re not doing a good job managing operations, either.
Give up trying to be the big hero and start training someone to do the job. Have that person work beside you. Show them the way you want things done. Write out procedures, if you haven’t already done so. Make sure the person you’re training understands that job security hinges on delivering to the standards you’ve set.
Break operations down into smaller pieces – inventory, assembly, truck maintenance, and customer delivery. Assign one person to each area. Make it clear you plan to hold people accountable.
Define what you expect by setting goals. With inventory, focus on the accuracy of counts and waste rates. Define the optimum time for delivery. Set a quality standard for assembly. Create a budget for truck maintenance.
Track performance in each area – by day, and by week. Use charts on the wall to show what’s happening. If an inventory is wasted, make everyone aware of it. If assembly and delivery beat the schedule, make everyone aware of that, too. When truck maintenance goes over budget, find out why.
Operational planning is all in the details
Talk at meetings about the cost of errors. Share reports that document inventory waste, lost productivity, and customer returns.
Ask people if they are willing to be personally liable for the losses. And when they say, “no”, point out that no matter what, you are personally liable. Make it clear you’re no longer willing to bear that burden alone.
Deal swiftly with the worst performers. Take them aside to discuss what’s going wrong. Find out if they care about the poor results, and what they’re doing to correct the situation. If they don’t seem to care, put them on notice that their job is on the line. Until people understand that there are real, personal consequences for non-compliance, things are unlikely to change.
Single out the high performers at weekly meetings. Recognize their contribution. Ask them to talk about how they achieved their results. Consider a reward: tickets to a game, lunch at the company, leave early on Friday afternoon.
Looking for a good book? Operations Management, by R. Dan Reid, Nada R. Sanders.
