|
Burn, Baby, Burn
Slow cash flow and other challenges are
keeping attention on process improvement.
By Tonya Vinas
Everyone is
looking for good news these days, and Stiles Associates LLC
is delivering some just-in-time. The New London, N.H.-based
executive-placement firm recently released a report on the
findings of a survey of 500 U.S. operations leaders.
The survey focused
on a range of topics, including process-improvement
activities and funding plans for the first half of 2009.
Not surprisingly,
71% of respondents ranked “cutting costs” as their top
priority, far ahead of “quality improvement” and “improving
market flexibility and responsiveness” at 21% each. However,
modern business leaders know that these latter initiatives
are absolutely necessary in a global economy to achieve
their No. 1 priority, as wells as Nos. 2, 3 and 4,
respectively: customer value/service improvement (37%);
increasing revenue (35%); and maintaining margins (32%).
Other data reflect
this truism, which seems finally to be sinking in to
corporate leadership. I recall during the bleak post-dot.com
bust and post-9/11 days, lean-focused leaders at many
companies were fired, pushed out during mergers, or
reassigned to the axe-man role as companies went into
“survival mode.” That doesn’t seem to be happening as much during
this crisis.
One operations
manager at a $5-billion-plus
computers-and-electronics-company told the Stiles Associates
researchers: “Our company recognizes that our operational
excellence system is the only way we will preserve our
long-term viability, and is reacting accordingly.”
Indeed, even
though more than two-thirds of the companies ranked cost
cutting as their primary focus right now, only about
one-third are cutting operational-improvement efforts — 19%
report “somewhat” lower funding compared with last year;
while 15% report “significantly” lower funding. Meanwhile,
32% are actually increasing funding compared
with last year.
Another
encouraging sign is that as sluggish cash flow continues to
plague companies of all sizes and in all sectors, more are
becoming aware of the benefits of lean accounting process
improvement.
“. . . respondents
report that their organization’s improvement projects have
become more heavily slanted toward cash generation,
inventory reduction, and improvements in receivables and
payables. By nature such efforts extend beyond the plant
floor and into administrative areas, such as billing and
accounting,” Stiles Associates reports.
Said one director
of performance improvement at a healthcare company site with
2,500 employees: “Our organization has sustained significant
investment losses. We are also facing reimbursement
challenges from key payers. In response, we are ramping up
improvement efforts. Improvement is more highly motivated
when there is a ‘burning platform,’ which we certainly have
now.”
Yes, we do, and it
seems the fire is spreading. But like a forest fire that
clears out unhealthy waste to make room for new growth, this is
an opportunity to improve processes everywhere, as the Stiles
Associates Research shows.
To view the
complete report, go to the Stiles Associates Web site at
www.leanexecs.com.
Tonya Vinas is Editor of Lean
Accounting News,
TWI News and
Lean and Green News.
|
