Here is exactly what we believe about operations. Everything we do revolves around six guiding principles concerning these six areas: management, people, improvement, growth, technology, and inventory.
Management: Develop self-managing systems
Complex processes should be broken down into individual parts (jobs) that are systemized, self-containing, efficient, and easy to teach. Employees doing these jobs and using these systems should be able to work on their own without much supervision.
Building these systems not only increases efficiency but also insulates the company from employee turnover and shortages.
People: Be a destination rather than a stepping stone
Human resources are becoming more scarce, and good employees are becoming more valuable. Demographic studies show that this scarcity will continue to worsen over the coming decades.
To survive this changing landscape, companies must obsess over finding the right people and creating attractive opportunities for them so that they stay.
A company’s operations can be its biggest recruiting tool. Companies should design processes and systems with the end goal of being able to attract employees not just with pay but also other benefits such as flexible work schedules and development opportunities.
Improvement: Implement rapid, incremental improvements
Not all improvements have to be huge, and small improvements collectively make a big difference over time. Every employee should have autonomy over their workspace and enjoy the authority to improve it. A culture of continuous improvement should be encouraged and the wins should be celebrated.
Increasing busy work is not an improvement. We resist some approaches to improvement that end up causing new efficiency problems while attempting to solve others.
Growth: Grow deep before wide
Most companies should focus on what they do well and double/triple down on that. Trying to solve revenue problems by taking on new unrelated initiatives is almost always a mistake.
Adding additional revenue centers should only be attempted when the core competency of the company is fully optimized. And then, any additional initiatives should be chosen based on how compatible they are with the company’s core competency.
Technology: Only deploy technology that pays for itself
Technology is not an end in itself, but it can be a means to an end. We look for common-sense technology solutions to make operations more streamlined.
We do not recommend technology solutions unless they will pay for themselves in an acceptable amount of time. Very often, we will recommend “quick and dirty” solutions rather than expensive ones.
We are vendor-agnostic. We are in the business of operational excellence, not the business of selling software.
Inventory: Make inventory a competitive advantage
After all the upheaval over the past few years, JIT (just-in-time) inventory has become a quaint notion that is often unpractical (if not fatal) to many businesses. Companies need more inventory rather than less. In fact, we believe in the maxim “he who has the most inventory wins.”
Buying and managing inventory well is an often-overlooked competitive advantage. Money often is made when buying just as much as when selling. Purchasing decisions should be based on real data and should be a major focus for the company rather than an afterthought to marketing or production.