"Information is in the eyes of the beholder" (E. Goldratt)
Metrics Define Behaviors
Creating The Stream With New Mental Model
By defining how we assess and measure the performance of the Organisation, the Controlling Model and the Performance System determine also how the people will behave.
If measures and incentives are linked to local optima, managers will be pushed to pursue their own personal agenda first, even at the price of what is best for the organisation.
Why do we keep on assigning mainly local goals?
Tell me how you measure me, and I will tell you how I will behave...
If you measure me in an illogical way, don't be surprised of illogical behaviours (E.Goldratt)
Splitting the organization into units with coordinated goals is the common approach for managing complexity.
But complexity is primarily determined by the the interactions between the parts of the organisation.
Then, we need to shift toward a New Set of Performance Measures to assign consistent objectives driving interactions toward the common goal to eliminate cross-functional conflicts.
With our distinctive knowledge we help our Clients implementing such Systemic Performance Measurement System, the very first step to elevate global performance of the organisation
Financial results are defined by decisions, and the core tactical one is the Sales & Operations Plan (S&OP). We will provide you with the right process and agile tools for simulating and making good decisions.
Processes and Tools
4 Good Decisions
We are pushed to believe the more data the better. Instead of Sifting an Ocean of Data we focus on information around the core variables of performance to keep management attention on The Goal
We Bring Focus
Pushed by the instinct to improve anything, organisations try to reduce costs everywhere. But local optima disappears at bottom line . We help you identifying the most valuable improvements focusing on constraints
It makes an impact
Eliminating divergences. We set metrics coherent to the common goal, so it will be easier to eliminate incoherent behaviors and conflicts, creating a stronger unity of purpose and community of trust
We Align the Organisation
Mastering The Stream With The Right Tools
Can we still consider cost the predominant metric for performance? It measure only resource efficiency, while performance is a consequence of flow efficiency. We help you realigning the performance system around flow (Throughput) and how to sustain it with the right levels of Inventory & Operating Expenses.
The Set of Measures
Performance needs to be planned and decided, not only controlled.
We build solutions for making good decisions, to assess their impact, with the support of a Simulation Systems capable to carry over the effect of past decisions and the impact of new hypothesis changing the current state.
Simulating the Effect of Decisions
Sales & Operations Planning is the key tactical process determining performance
Applying The New Mindset Consistently to Key Tactical Decisions Implementing the Strategy
Sales & Operations Planning (S&OP) is the key tactical decision process that defines what the organisation is fostering to achieve and how to achieve it.
Within the process, several financial assessment shall be carried on to evaluate different scenarios, with the goal of maximising the Flow Performance (Throughput) utilizing at best capacity, exploiting the constraints, with the optimal level of inventory and protective capacity to protect operations from variability.
Implementing this process is difficult, and very often we have detected gap in the approach, in its governance and in the tools to support it.
With more than 25 years of experience on the field, we are the ideal partner for shaping the right approach, processes and to provide the right tools designed leveraging our know-how to exploit the constraints and the system's throughput
Performance is the outcome of decisions and executions. Around 70 to 80% of the Financial performance of an organisation is predetermined by the Strategic Plan committing the backbone of capacity and by the Sales & Operations Plan activating the flexible portion of capacity. The remaining 20 to 30% is the result of Variability, Flow Efficiency and the timing of executing operating decisions.
When we understand this equation, we realize that the focus of control and performance system shall shift form variance analysis to addressing the right decisions to exploit our capacity commitment more effectively.
Causing and Sustaining the Stream
To transform data into information we apply a deductive process which is affected by the predominant Management Culture pervading the organisation.
It's according to such management culture that, in front of a certain data - for example related to cost performance - we are mentally pushed toward certain decision patterns or other.
The conclusion is that in order to improve the way we make decisions, we shall first work on changing the predominant management model and culture
What is Information? And what differentiates it from data? According to Goldratt's "information is the answer to a specific question, while data are the elementary blocks to produce information".
For the clerk at the delivery, the shipping address of a customer is an information as he shall determine where to ship and chose the right transportation mode. For a guy at the ICT, such shipping address is just data.
Under this perspective, it's evident that to get information from data we must ask the right questions.
To Make Decisions We Need to transform Data into Information...
To transform data into information we apply a deductive process
The role of Top Management is crucial to sponsor the change. We have prepared and induction program for managers to create the awareness to start and sustain the journey.
Paper and a pen: tools must be simple if we want to master complexity. We have embedded TOC Simplicity in WD PlanninG, our solution integrating S&OP, Budgeting and Business Simulation
We Give You the Tools
We have developed a training program (Train the Change Agents) to prepare and support your team to lead the change
We Train your Team to Manage the Change
A tool is necessary but not sufficient. After the implementation we will provide your team coaching on the job to assure that the new knowledge is sustained and reinforced