Question: We have a real challenge figuring out the right amount of employees and materials needed to make and deliver what we sell. Some days I”™m trying to figure out how to keep people busy. Other days we can”™t get everything out the door on time. How do I know if I”™m paying enough, too much or too little to get the job done?
Thoughts of the day: It would be nice if every day was the same in operations. Set a steady pace; you need to know how much time it really takes to get specific products or services built and delivered. Build a Rolodex of reliable sub-contractors. Assign menial tasks to temps. Ask managers to play a role on the line. Know when it”™s time to charge a premium because everyone has too much work.
Operations is the guts of the business. It”™s the part of the business that makes and delivers what your salespeople sell to your customers. Make sure you know who is assigned to operations. Clarify each person”™s role with the goal of eliminating duplication of effort, wasted energy and people working at cross purposes.
Mandate weekly planning meetings ”“ more often in busy season, but keep them short and sweet. Go over details of what has to be delivered today, this week ”“ next week, this month ”“ next month, this quarter ”“ next quarter. Plot deliveries on a calendar where it”™s easier to see resource shortages and opportunities.
Figure out what an average pace through the month would need to look like to meet overall demand. Look at historical data to figure out busy and slack times. Is it Monday and Friday that are crazy, or is it mid-week that demand is highest? When during the month do things slow down or speed up?
Tell salespeople to limit commitments during the busiest times and steer customers towards lower volume periods. Tell customers they”™ll get more attention and encounter fewer problems at slow delivery times. Negotiate delivery dates to insure you have enough people to go around, enough product to get out the door, enough trucks to meet the demand.
Be ready to ramp down as quickly as you ramp up. The minute that demand slows down reassign staff to preparing for the next busy period. Let temps go. Back off from the least committed subcontractors.
Be realistic when estimating the time and resources needed to make and deliver what”™s been sold. It”™s unrealistic to expect everything will go without a hitch. The busier it is, the more likely you will run into problems. This also means you need to plan time into the schedule to allow for recovery from glitches.
When it”™s slower, work on back up resources. Test out new subs on simple projects to be sure they can meet your standards. Line up more backup than you think you”™ll need.
While subcontractors can be invaluable, keep in mind that they may also get busy when your company gets busy. By planning out workload well in advance, you can keep the subs from committing themselves elsewhere. Flex up staff with temporary workers and interns who can handle simple jobs and relieve more skilled workers to do higher level tasks. Look at all the tasks your people do every day. Make a list of the most menial tasks, and when operations staff starts approaching the need to work overtime, implement a temporary worker solution.
Make sure your managers know that when it gets busy they”™re expected to get their hands dirty. There”™s not room for prima donnas; it won”™t hurt anyone to pitch in now and then to get an order out the door. Multi-tasking is an essential skill in any small to midsize business. Adding a few extra hours to the line each day or each week can make the difference between success and failure.
Some industries experience peak seasons, when just about everyone is fully maxed out. Know the seasonal cycles of your business. If it”™s hard to find anyone to do the work certain days, weeks, or months of the year, have a price plus fee schedule for that timeframe.
Prioritize your best customers and do your best to meet their needs. Know that some customers will gladly pay to get what they want when they want it. Avoid the customer who is hard headed about wanting what they want when they want it and who is unwilling to pay a premium to get it. They are probably the delivery headaches just waiting to happen. Send them to your worst competitors for them to deal with.
Andi Gray is president of Strategy Leaders Inc., strategyleaders.com, a business-consulting firm that specializes in helping entrepreneurial firms grow. She can be reached at 877-238-3535. Do you have a question for Andi? Send it to her via e-mail at AskAndi@StrategyLeaders.com.
