A lot of businesses can get away with throwing people at a problem.  Adding personnel is very costly – on the way up, and on the way down.  Good systems are much less expensive.

More compliance requirements?

There’s nothing like a well designed system that is the ONLY way a job can be done to enforce compliance.  Compliance requirements come apart when they depend on a person to remember to write something down.  Systems define the process, become the only way they can be done (thus assuring it will be done that way), and are self-documenting (for audit).  It is the cheapest insurance you can buy.

Stop talking about it and implement bar code data collection already.

In my many years of technology implementation, the one thing that I have heard people talk about the most but do the least, is bar coding data collection systems.  It is probably the highest return on investment project available, but one that requires a little more investment because of the cost of scanners.  As a result, most businesses get cold feet before writing the check.  What a shame…it’s like found money!  And talk about improvements in customer service…don’t get me started!

Let technology projects help you get process improvement changes made.

“We’ve got to do it for our new system” will usually trump “this is the way we’ve always done it.”   Don’t underestimate the human aspect of change – the people aspect of process improvement and additional automation is far greater than the actual technology challenges.  Use your systems project as the watershed event that is requiring the behavioral changes – changes that are designed to improve everyone’s work life.

Learn to manage by exception.

Once things are fairly automated, utilize system tools like event management software that alert you of conditions that need management attention in a timely manner.  What goes “bump” in the night for you?  Find that condition when it first happens, and notify the right people to deal with it immediately, before it becomes a costly affair.  These same tools can also be used to automate some very routine tasks, such as emailing order acknowledgements, saving labor cost. 

Integrate your systems. 

Don’t let your company slip into “Excel Hell”.  Excel is not designed to be a business system…it is an analysis tool.  Find where the disconnects are in your business systems, evidenced by duplicate data in different systems, and extensive use of Excel to operate the business.  Everywhere there is duplicate data indicates waste, and a cost that can be eliminated.  If you need multiple systems to run your business, there is very affordable software available that allows integration of disparate systems to keep each of them updated with data changes made in whichever system “owns” the information (such as customers).

Here’s my top 5 recommendations:

1)  Assess and improve your processes

Look around.  See that crack in the ceiling?  Of course you don’t – you’ve ignored it for the last 6 years, why would you see it now?   A good business process review is in order – a “full 360” examination of how well each process is working will reveal lots of opportunities to streamline your business and cut costs – while positioning for growth.  You want to be able to handle a lot more business without a significant increase in personnel.  Contact me for a free worksheet tool to help you get this done.

2 )  Improve your customer service!

Price is interesting, but today customer service is king.  If you can’t deliver on time with high quality products and services, somebody else will.  Invest in customer service improvements.  Delight your customers, not just satisfy them.  Survey them (with tools like Survey Monkey) to make sure they’re delighted.

3)  Shorten your lead times

Like customer service, someone else will deliver sooner if you can’t.  Look at all elements of lead times – they’re not all on the shop floor, by the way.  A tremendous amount of lead time improvement can be achieve in the front office, in areas such as quoting, planning, etc.  Lead time reduction is a critical part of becoming a lean organization…so get lean already!

4)  Tighten your controls.  If you have inventory, what is your inventory accuracy level?  No, really, what is it?

If you’re going to rely on systems (as you should), one of the key metrics in your operations is inventory accuracy.  It’s at the core of all the assumptions that systems use in their logic.  I’ve heard many a business owner tell me that “we have an inventory problem”, to which I always answer “your inventory system is probably just fine, it’s you’re everything else’ that isn’t working”.  Inventory accuracy is very telling about how well your processes are defined and controlled within the system, and is the best report card for operations to measure their controls.  So, how are you measuring inventory accuracy?  Gut feel?  I wouldn’t buy your company.

5)  Invest in Ecommerce 

Still depending on that tired looking electronic brochure of a website that your nephew did for you back in ’99?  Well, welcome to the 21^stcentury.  Your customers and suppliers expect more (see #2 above).  Figure out how to collaborate via the web with your customers and suppliers – it will keep your costs low and your customer service high.  Don’t underestimate the importance of ecommerce, regardless of whether you pride yourself on the “personal touch”.  Consider that generation Y or Z customers communicate differently, and perhaps don’t think they need to speak with you.  What about your South Korean manufacturer?  Staying up until 2:00 AM is not exactly what anyone would call a productive way to spend your time.

In the IT world, there are literally hundreds of categories of processes you may wish to document. Passwords, Network Architecture, Installed Software and their Update Histories, Backup Schedules; the list goes on and on.  Here at Attivo we considered doing what so many have done – to create a shared database containing all of this information in one place.  From that database, we have one document for each of the above categories, then refer to that document easily when we needed to. We track our own information this way, but more importantly, we keep track of this data for our clients as well. Exact Synergy ,our CRM system,  has the capability to simplify the approach by allowing us to attach this data and documents to the customers. So why did we choose to go with a “workflow” approach instead of documents? Answer: the intangibles.

Before I get started, let me explain what a workflow is.  Also called a “process flow” or “request”, a workflow is a pre-defined business process that carries information from one employee or resource to another, for the benefit of the required process, until the information is no longer needed. This is best exemplified by a customer comment or complaint. The comment first gets “created” by the satisfied (or angry) customer, then travels with the remarks themselves to the customer’s account manager, then on to the general manager – notifying everyone along the way.  As it gets passed along, various people log their own information into the workflow, such as the date of the comment, what product or service the comment concerns, what type of comment it was, to the final resolution of the problem. 

A document, on the other hand, is alot like this blog: alot of information on a white sheet of digital paper. I can sort it by category, date, and author…but that’s about it.  And that’s where the intangibles comes in.

Suppose you’re a technical support operation and you’d like to see a list of all your customers’ installed software sorted by install date. But you’d also like to filter it by Operating System and sort it by the softwares’ last updated date. Finally, you’d like to export that data including the updater’s comments into an excel spreadsheet.  If this were an online document, you could handle the first and last parts, but all the additional fields and filters in the middle would have required customizations to the document management system that may never be completed. But with Synergy’s workflow solution we have at our disposal an almost unlimited number of free fields that are searchable straight out of the box, and the requests themselves carry just as much textual data as a document.

What happens to all that saved information when you lose your phone?  Contacts. Phone numbers. Addresses. Calendar Entries. Chat Usernames. All need to be re-entered into your new phone! (unless you remembered to manually backup this information to a computer). 

A small application from Google (who else?) now exists that solves this problem as well as several others.  Sync automatically logs into your GMAIL (account required) online email service and synchronizes your contacts from your phone with the contacts on your GMAIL.  It will even carefully search for names that appear to be similar in order to prevent duplication. If duplication does occur, you can easily log into GMAIL from a computer at your convenience and merge similar contact records. The contact records themselves are extraordinarily detailed; affording you the ability to save unlimited Phone Numbers and Email Addresses for each contact name. Because most smart phones afford you the same luxury, all those detailed contacts are now updated on your phone the very next time the Sync application runs.

Google Sync also updates your phone’s calendar entries with your Google Calendar application – saving your appointments and reminders and alerting them on your phone instead of waiting for you to sign into a computer terminal to be alerted. Imagine, your own rolodex, personal reminder service and datebook - automatically updated – right in your pocket.

Then, when someday the inevitable happens and you lose your phone, break your phone, or just decide to replace it: just re-install Google Sync on your next phone and let Sync update your contacts! No more fancy cord transfers and downloads! No more backups! It’s all online!  I can’t express to you enough how valuable this service can be. Just think about all the times you’ve had to send an email out to everyone you know letting them know you’ve “lost” their phone numbers and email addresses, and to please send them to you as soon as they can.  Now it all occurs wirelessly and in moments.

To get this incredibly useful feature on your phone, visit http://m.google.com from your phone’s browser and select the “Sync” application.  Then, choose your phone’s make and model and begin the download. After you install with all requested permissions, sign into the application one time with your GMAIL username and password, and let Sync do the rest.

We toyed with the idea of buying bigger tapes, but that meant also updating our Tape Drive hardware itself, a significant investement that would no doubt become obsolete itself someday.  Or we could remotely backup to an offsite backup service, but this meant clogging our internet line mercilessly during backup times - and 60GB takes a very long time to transfer even over broadband. It was time to embrace a different option.  USB external drives were the answer.

Not only are USB External Drives significantly more inexpensive than Tape drives, but they also have the unquestionable appeal of being able to be plugged into any computer/server – without any additional hardware to buy/install!  Additionally, the transfer rate both to and from the external drive over the USB 2.0 connection is at times more than 30x the rate of transfer we received over the old tapes.  30 hour backups on the tape systems were now taking just over an hour to complete!

We purchased 2 500GB Iomega drives from http://www.tigerdirect.com for less than $100 each. They shipped in just a few days and within minutes of opening the box I had them programmed into Backup Exec to backup our entire network on a weekly basis.  They are about the same size and weight as the old tapes, but at 10x times the size they are useful for a variety of purposes beyond just backing up our system.  Now, every Monday our new routine consists of the following steps:

1. Unplug old USB drive.
2. Plug in new USB drive returned from the offsite location.
3. Return to the offsite location with the old USB drive.

There have been a whole lot of fires down here in Southern California recently, but with our new backup plan in place, we’re no longer worried about losing our valuable data.

In the normal course of business, something will go wrong with your accounting/ERP system, causing grief and inefficiency until the problem is resolved.  Guaranteed.  The more complex the system is, the more it happens.  So what are the options for getting the help that you need when you need it?

First, let’s clear the air on some confusing terminology.  Most software developers charge annual maintenance fees, which typically cover just updates to the software, or the actual right to be able to continue using the program from one year to the next.   This often costs anywhere from 10-20% of the original software license cost, and is charged at the original purchase and each year thereafter.  Technical support, on the other hand, is assistance via phone or email in resolving issues and errors that come up while installing or operating the software.  Technical support can be provided by either the software developer (author), or by a third party such as a software reseller or consulting firm.  Some larger companies have in-house experts to provide almost all of this support, except for perhaps code-based errors that only the developer can resolve.

So, what are the purchase options?  Most software developers and consultants offer two options for technical support.  The usual two options are an unlimited support plan, or a per-incident plan.  The unlimited support plan is usually quite costly, such as 10% of the software cost per year.  Often this is wrapped up with a “maintenance plan” that can cost north of 20% per year.  The per incident support plan is usually priced as a cost per incident (regardless of how short or long it takes to resolve).  Another version of per incident support is to start the clock running every time the client calls, and bill for actual time incurred (perhaps subject to some minimum billing). 

The most annoying part of most support plans is being told “I’m sorry, but this is not a technical support issue.  I’ll have our Consulting Manager prepare a quote for this”.  In other words, you’re not covered.  For this reason, I‘m not a big fan of unlimited support, since it has to exclude anything except true support issues, or it will be abused and be too costly for the provider.  I also don’t think per incident plans are much better, since a lot of cost is created in administering the incident pool, or billing the client for each and every phone call.  Those costs must ultimately be passed on to the customer.  Customers often hesitate to call for support, since they know they’re going to get an invoice, and choose to gut it out themselves rather than reach out for help (and stay productive!).

So what is the better mousetrap for Technical Support?  After doing this kind of support for the last 17 years, we developed a plan that we call  Full Value Support.  This is administered as a quarterly budget of estimated consulting time required for technical support AND small consulting projects such as report writing, user training, etc.  We send one quarterly statement and invoice, and if there is any unused time from the original budget, it becomes “rollover minutes”.  Every 6 months we review the budget to be sure it isn’t too high or too low, and discuss ways to keep the cost as low as possible with the client, by using many of the self-help tools that we make available to them in their unique client web portal.  We also point out where any system (or people) weaknesses exist, which may be causing unnecessary expense.

Full Value Support makes sense for both our clients as well as our support team.  We provide Exact Macola Technical Support, Microsoft Dynamics Great Plains Technical Support, and QuickBooks Support in this manner and our clients love it.  Their systems are well documented on our client portal, the self-help tools are there, and resources available that allow them to keep their costs low.   Shared responsibility for keeping costs under control – now there’s a “new economy” concept by which we can all prosper!

I’m in the big rebound camp; I’m taking steps to position our company to maximize the recovery. We’ve focused on improving our processes so that we can serve our current customers better and win more new business. We’ve overhauled our sales process, developed a new SEO strategy for our web site and are re-working the marketing plan. In addition, we’ve streamlined our operational processes. These changes have made us more effective, as well as more efficient. Not only are we in a good position to take full advantage of the recovery, we’ve also been able to cut costs and improve profits.

In coming posts, I’ll share the details of the steps that we’ve taken at Attivo. We’re actually planning an upcoming webinar to showcase a “Look Inside Attivo” so you can actually see these best practices in action. I would welcome any comments on the subject.

Here’s an interesting case study on how we’ve helped one of our clients, Danchuk Manufacturing, to streamline their operations, position them for growth, and reduce their operating costs.

“We achieved an 80% reduction in labor cost and administrative overhead related to our growing eCommerce sales. We’re truly positioned for substantial growth and cost containment.”
-Steve Brown, General Manager, Danchuk Manufacturing
Download the Danchuk Case Study and learn more about Cost Cutting with ERP System Integration.

So shouldn’t everyone use Standard Cost?  After having developed and implemented dozens of cost systems for clients over the last 30 years, I’ve learned that the answer is “it depends”…on two issues.  First, are you a make to stock widget manufacturer, making the same things in the same way over and over, or more of a job shop, make to order type of company?  Secondly, do you have the resources on staff that can manage standard costs in a timely manner, before any transactions happen?

Make to stock environments make sense for standards since most things are made over and over again, and are supposed to use the same effort, and have the same input costs.  If they don’t, management should know about it promptly to get things back on track.  That’s the role of standard cost variance reporting.

Make to order businesses rarely produce something in the same manner, since each job differs based on the customer’s quote, typically.  In this case, it is important to understand the actual cost of a job once completed (or during the process) as compared to how the job was quoted.  Usually not a lot can be done about the actual cost incurred, but a lot should be learned about improving the quoting process from this comparison of actual cost versus quoted cost.

Enterprise software that controls the accounting, inventory, procurement, fulfillment and manufacturing process (referred to ERP systems), provide a choice of cost methods to use.  Mid-market systems such as Macola ES and Microsoft Dynamics GP (Great Plains) not only give you a choice of which inventory valuation method to use, but if you choose standard costing, you also get visibility into weighted average and last cost as well.  Unfortunately, unless you are using a much more expensive software solution, you can’t pick and choose costing methods at the item level.  Once chosen, it applies to all inventory for the whole company,

I was informed by the attendant that they would be closing in 45 minutes.  “No problem, that’s all we need them for.  How much for two chairs until closing?” I asked.
“That will be $25 please, which includes a $5 deposit”, she said.
“You’re joking, right?  You’re not really going to charge me the full day rate for less than an hour?” I asked.
“I’m sorry, sir.  That’s our policy”, she replied.
“Are you the manager here?” I politely asked, to which she replied “Yes”.
“You must be able to do better than that”, I pleaded.  “I really feel like I’m being ripped off.”
“I’m sorry sir, no exceptions” she said (plus a whole long explanation story which I completely tuned out).

At the conclusion of our little exchange, almost like it was staged, a guy walked up with his family to return two chairs.  While still standing with the rental manager, I sensed opportunity and quickly explained my plight.  He gladly offered the chairs to me, and I offered to split the cost with him, which he refused.  Five minutes later, I was sound asleep for a much needed half hour nap.

Time was up.  No problem…it was time for dinner anyway.  I then returned the chairs and collected a $5 deposit (courtesy of my earlier friend) from my inconsiderate attendant/manager, along with a no-charge dirty look.  In case you haven’t been following, the score is attendant zero, Len $5 ahead.

For all of you loyal Attivo Group customers out there, if we ever have a policy in place that doesn’t make sense, please notify me at once so we can fix it immediately.  Customers should never feel like they’re getting ripped off.  Also, please review your own customer policies on a regular basis, and solicit feedback from your customers on how to improve your products or services.  You just might wind up with more business, not to mention a whole lot of goodwill.

I. Create the procedure in the required database.  SQL Script below:

CREATE PROC SearchAllTables  (@Search char(100) )
AS
BEGIN
                   CREATE TABLE #Results (ColumnName nvarchar(370), ColumnValue char(3630))
                  SET NOCOUNT ON
DECLARE @Table char(256),
@Column char(128),
@XSearch char(110)

                  SET  @Table = ”
                  SET @XSearch = QUOTENAME(’%’ + @Search + ‘%’,””)
                  WHILE @Table IS NOT NULL
                  BEGIN
                             SET @Column = ”
                             SET @Table =
                             (SELECT MIN(QUOTENAME(TABLE_SCHEMA) + ‘.’ +
                             QUOTENAME(TABLE_NAME))
                             FROM  INFORMATION_SCHEMA.TABLES
                             WHERE TABLE_TYPE = ‘BASE TABLE’
                             AND QUOTENAME(TABLE_SCHEMA) + ‘.’ +
                             QUOTENAME(TABLE_NAME) > @Table
                             AND OBJECTPROPERTY(OBJECT_ID
                             (QUOTENAME(TABLE_SCHEMA) + ‘.’ +  QUOTENAME (TABLE_NAME)), ‘IsMSShipped’) = 0)
                WHILE (@Table IS NOT NULL) AND (@Column IS NOT NULL)
                BEGIN
                            SET @Column =
                           (SELECT MIN(QUOTENAME(COLUMN_NAME))
                           FROM  INFORMATION_SCHEMA.COLUMNS
                           WHERE TABLE_SCHEMA= PARSENAME(@Table, 2)
                           AND TABLE_NAME = PARSENAME(@Table, 1)
                           AND DATA_TYPE IN (’char’, ‘varchar’, ‘nchar’, ‘nvarchar’)
                           AND QUOTENAME(COLUMN_NAME) > @Column)
                           IF @Column IS NOT NULL
                           BEGIN
                                       INSERT INTO #Results
                                       EXEC (’SELECT ”’ + @Table+ ‘.’ + @Column + ”’,
                                                   LEFT(’ + @Column + ‘, 3630)
                                                   FROM ‘ + @Table+ ‘ (NOLOCK) ‘ +
                                                   ‘ WHERE ‘ + @Column + ‘ LIKE ‘ + @XSearch)
                                                  END
                                      END 
                          END

            SELECT ColumnName, ColumnValue FROM #Results
END
 
II. To search all columns of all tables in database for the keyword “Computer”

EXEC SearchAllTables ‘value’

This may be a long running process.  The amount of time to execute is dependent on the size of the database you are scanning.