We are asked a lot about “best practice” reviews. It is a key part of what business services providers, consultants, due diligence practitioners and the like do. Potential clients want some reassurance that they are close to the magic combination of processes and controls.
Part of our introduction to new clients is a no-fee assessment of their business. We spend a couple of days at the business and write up our observations and recommendations. This is about as simple as it gets for best practice reviews. But some clients are surprised at the simplicity of our recommendations.
Simple doesn’t mean easy, though. Some common recommendations are better measurements of performance. It goes back to the shop-floor question “how well are you running today? How do you know?” One of the first overhauls most facilities need is to capture data in the correct unit of measure, one the operators have some control over.
Other recommendations are related to human interface on the shop floor. We see manufacturing and distribution facilities with shop-floor paperwork or RF scanners that are terrible for the user. Something as straight-forward as putting the information the user needs on a single screen versus constantly skipping back and forth can make a tremendous impact on the operation.
Best practices are different for different situations, too. A distribution center that does very little direct-to-consumer business will look a little different than one that does a lot of DTC business. We strongly suggest that everyone that hasn’t already planned for DTC distribution (and sells consumer goods) start looking at it. The switch comes so quickly. Just doing more, faster is a recipe for failure.
Best practices are the result of looking at a business from a data-driven view that takes into account simple principles. Operational design must be driven by the philosophy of the business, must meet the responsibilities of management and must commit resources only if they meet the requirements to commit resources.
The philosophy should be a statement of what the company does, where it plans to go, and how it plans to get there. It should cover the basics and talk about:
Great product or service – What differentiates your offering
Great story - Why is your brand different
Great customer experience – What is your service proposition
Great team – What makes a great team member
The responsibilities of management are non-negotiable. Meeting them makes you an outstanding employer and helps with recruitment. Meeting them also improves your businesses efficiency and effectiveness. Simply stated, they are:
Provide the tools and materials to do the job
Provide a system that communicates expectations
Provide a system that gives continuous feedback on meeting those expectations
Finally, any process must meet the requirements of committing resources. Any process step or other action taken should:
Increase revenue
Reduce operating expense
Meet a necessary condition (service requirement, legal or ethical requirement)
Taking all these concepts into account can be a heavy task at first. It becomes a way of thinking as you go forward.
The major failure of a “best practices” mindset is the superficiality with which it can be applied. Sound practices take a sound foundation. Sometimes, a best practices review can look like a complete redesign. But best practice would be a complete redesign in some cases. In those cases, that redesign would be worth the effort. Not only will it improve the current situation, the foundation will pay off in years to come. If your foundation isn’t built on where you want the business to be in the future, you are already behind.
The operators at Title 2 Business Services have been performing this work for over 20 years. Let us help you figure out the depth of your best practices transformation. Contact us today to learn about our no-fee review.