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Welcome to the 4th Business Health Check video In the business diagnostics series.
This is the next video in the series of overviews of business diagnostics. Again, hopefully, this has provided some value to you, as you can take this away and apply in your operation.
Again, if you try if you get into any difficulties at all, feel free to drop me an email or give me a call. So the next part we're going to look at is the area and process overview. So first thing we need to do in there is understand the volume. So a good starting point is a SIPOC, covered in one of the previous videos very briefly.
So stands for suppliers, inputs, process, outputs, and customers.
So do the people in the operation, understanding who the customers are? Do they understand what value they're providing to those customers?
Do they understand who the suppliers are? What the inputs are from those suppliers? What the outputs open third process to the customers? What internal terms of value doing some what value is in the eyes of the customer? So from the customer's perspective, is it real value? Is it? Is it delivered as the customer would expect it to deliver to be delivered? service level agreements? Are there any in place? are they based on need? Or are they just arbitrary SLA s?
How is performance measured against those SLA is what the consequences of not meeting them. So all questions, it will be useful for you to ask when you first go in to that operation. In terms of those SLA is Do they ever over deliver. So we pay those SLA s because that is a form of waste, you're over delivering you're potentially over resourced, or over committed in terms of stock levels, things like that. So a good another good indicator.
So that's understanding the value within that operation. And within that you should always have in the back of your mind when you're doing any kind of diagnostic in an area. And don't try not to get blinded by you know, if it's if it's a pet area of yours, or if it's an area that you're quite fond of the effective niche effectiveness challenge that you should always have in the back of your mind is should this activity beat on its own? So not well, you know, how long does this activity taking? Should we be doing it at all? Is it adding any value to the customer? And if it isn't, and why are we doing it. So next thing to look at when you go into the operation is capacity and demand planning. So is the area using any kind of formal or informal capacity demand planning? Does your resource match the demand that you get? So capacity and demand. So don't man up to the levels that you think you may need? You know, it should match the demand volumes that are coming in at the frequency they're coming in wherever possible, standard times in place, because it's very difficult to build any kind of capacity and demand model unless you've got standard, some sort of standardization. So you've got standard processes, you can then apply select times to that, that all helps in the capacity and demand planning.
So the standards in place if the standards are in place, or standard times being applied to them, or being derived from them, capacity planning outputs compare with your calculations. So you know, based on the data that you got in the Advanced Data, when you requested it before you went into the operation, you will have done some quick and dirty calculations that says we've got this much volume, and it takes this long to do it then we should need round about this much in terms of headcount and FDA. So how does that compare to what's been used in the capacity planning inputs and outputs in the operation? Do they match? What's up forecasting accuracy? So if using a forecast, and a wise man once said there are only two types of forecasts, wrong ones and lucky ones. So
there is again the wrong world again, looking at both If you've got good historical data, and you've got a stable sort of order book coming through, you can, it won't be a forecast, it will be more of a unknown plan. So you know what your demand is going to be because you've got orders from three months ago coming through the line, unless it's a in bonus, I think operation work. You don't know how many people are going to call that then. And that's when you get into forecasts. So is the data on volumes and standard timings? Is that periodically valid validated. So how do we know what's correct? And how is that being used? So, those are the next couple of areas you want to look at when you're doing any kind of business diagnostic. See you next time