Wednesday, 17 December 2008

Support Services

Machan Consulting, while striving to be the leading Operational consultancy in the UK, is not without help. Christmas is an especially good time to remember the businesses that support that goal, so a special thanks to:

and most recently:

Finally, remember during this downturn/recession/credit crunch to focus on your customers, their customers and deliver value greater than your cost, standing out ahead of the competition. That's what real Value Streams and Value Stream Mapping is all about!

Tuesday, 30 September 2008

Useful guidelines when off-shoring

For this blog we are grateful to Paul Gagg, a Global Operations Manager, based in the UK but with extensive experience in this field for his business.

"The continuing shift of manufacturing activities away from Developed to Low Cost Countries (LCC’s) shows no sign of abating. Despite well documented stories of organisations “near shoring” or repatriating manufacture, the flow remains overwhelming toward LCC’s. Much of the shift has been driven by the pursuit of cheaper Costs of Goods (COGS) and, in the majority of cases, LCC’s ex works COGS have proven to be considerably cheaper. However, there an increasing awareness of the need to take a holistic view, assessing the true cost to serve and deliver products to the end customer; a realisation that the perceived benefits of moving to LCC’s are less dramatic than initially projected.

Aside from the obvious costs associated with manufacturing further away from the historic centre such as logistics, tariffs and higher inventories, there are other costs to consider. Travel costs (both time and financial) to undertake audits and supplier meetings and the increased risk of loosing brand equity due to IP and trademark infringement are more difficult to capture, but should not be underestimated.

Whilst LCC governments, particularly China, have made concerted efforts over recent years to bring legislation in line with Developed economies, there remains significant scope for improvement in the control and regulation of manufacturing businesses and their interpretation of “legal” business practices. Compliance to World Trade Organisation regulations is at best patchy in countries such as China and it is important to ensure that robust procurement practices are put in place.

Organisations wishing to transfer activities to LCC’s need to ensure that infringement of IP, Know How and Trademarks are mitigated and the impact on COG’s and brand equity minimised. The following should act as useful guidelines throughout the off-shoring process and should help to reduce potential issues surrounding IP and Trademark infringement:

1) Ensure signed Confidentiality/ Non Disclosure Agreements are in place before any detailed information is transferred.
2) Extensive due diligence needs to take place. Visiting facilities is imperative. Developing personal relationships, however difficult given cultural and language barriers, must be done.
3) Employ a local team who can act as the in-country liaison. Managing suppliers in this manner continues to build on the relationship and ensures that policing of the LCC supplier can be carried out regularly.
4) Take a balanced approach to your portfolio. Undertake full cost to serve modelling to ensure that “Material” benefits exist by moving to LCC’s. Once complete weigh against the perceived risk of IP and trademark infringement inherent within the product that you intend to offshore.
5) Ensure commercial contracts are in place. Create separate Trademark and Patent agreements in both English and Chinese and ensure that the Chinese version is registered with the Chinese IP authorities.
6) Do not underestimate the speed with which designs can be transferred into sellable copies and undermine your market share.

Whilst the above list is not exhaustive, it should give some insight into the actions that should be put in place to mitigate the inherent risks in LCC sourcing. Transferring manufacturing to LCC’s clearly has many benefits."

Monday, 8 September 2008

Off-shoring revisited

In a continuation of the debate about off shoring, you may be interested to read the latest report from McKinsey (link:, that looks at recent data and trends from the US point of view. In essence it looks again at the impact of oil prices, wage inflation and currency movements.

In a future Blogging we will also have an article that introduces you to a 2008 MSc. research thesis of why some businesses may choose to remain in the UK.

Remember to keep your Supply Chain balanced around your business aims!

Monday, 14 July 2008


Checklists: Humble yet effective

Yet again I am amazed by the simple effectiveness of having a checklist. We all know (and take comfort in) the need and application of pre-flight checklists for an airline pilot, but how often we forget their power in dealing with complex office activities.

The mapping of a well constructed internal process both “as is” and “future state” was coming to the end, and the issue remaining was to ensure that the checking step was complete and understood. We pondered, added and challenged until we came up with a 25 item list, making it clear which function checked each item (using their unique skill and knowledge set). The outcome was crystal clear clarity on what had to be done right in the upstream process steps, and rock solid ownership of what was to be checked by whom. This was evidenced by comments such as “... and that’s why xyz happened, because it wasn’t right” and “that re-work cost a lot!”

Is the list perfect? Probably not.
Can it be improved? Certainly.
Can it be used as a training tool? Of course.

Can we use the list to work out how to make errors less likely? Now we are talking....

Friday, 13 June 2008


Critical Chain thinking (see Critical Chain, 1997 by Eliyahu M. Goldratt, ISBN 0-88427-153-6) extends our thinking about how to plan projects, bearing in mind how people think and respond to uncertainty. The Germ Theory of management by Myron Tribus, (1992, ISBN 0-945320-33-7, download at talks about the “Germ of variability” and how its effects can be seen everywhere.

Variability and uncertainty are everywhere. Particularly in a Global economy, we are subject to changes that are hard or near impossible to predict. Why then do we persist in creating expectations and plans that make no allowances for them? If the success rate of a difficult process is historically evident as 8 out of 10, then why only plan to make 10 when you know the customer wants 10?

On the other hand, sometimes luck sends us some good news and we can move more quickly. Perhaps the long awaited approval came through quicker than expected. The danger there of course is in hiding the gain, in case it builds expectations of a faster response every time. If we come in under budget just because of natural variation, the budget surplus gets spent, so as to avoid a cut next year. In that next year we might over spend because we only have limited control... the result of natural variation. The outcome? Higher spend for a questionable gain.

Uncertainty and variability is everywhere. What makes the difference is how we plan and respond to it. Recent work on Supply Chain design is recognising the need for flexibility and robustness. These are attributes that can handle shocks to the system and still perform. Lean, process visibility, clarity of your constraints can all help in this, but at the heart of it all is our understanding and use of variation.

Where are you on the bell curve?

Saturday, 19 April 2008

Business Bottlenecks

For those familiar with TOC thinking, bottlenecks or constraints are a good thing. To those not familiar that comes as a surprise.

A business bottleneck makes improvements easy to manage. If your bottleneck is an internal one, and you know what it is, then your improvement will come from maximising its use and increasing its capacity. That means making sure it does no unnecessary activities, especially re-work. The capacity of the business to increase is limited only by how well you use that bottleneck. Your role as manager of that bottleneck is clear.

What about if you aren't the manager of the bottleneck? What is your role?

Well if you are a "near bottleneck" it's to make sure that you don't take over that role. Process improvements, careful managing of your resources is the watchword, and if bottleneck improvements are likely to put you in the pinch point, shout loudly.

If your area is far removed from the bottleneck, then your role is different. First don't take on work that has to go through the bottleneck that is over their capacity (learn to say "No", even if you can handle the task), then make sure that the quality of your inputs to the bottleneck area are of the highest order. Lastly but not least, what can you do to relieve the bottleneck of work, or better support them to increase their limit?

So whichever role you are in, you have a clear focus to improve the business.

Tuesday, 25 March 2008

Best Practices in Lean Six Sigma Process Improvement

Dr. Richard Schonberger has published this year (2008), his latest review of Lean proficiency. The link in this blog takes you to the UK Amazon page should you wish to buy it.

The publication draws heavily on Richard Schonberger's excellent and growing database of Companies' Lean practices. The book uses the data to draw messages and conclusions on the adoption, and retention of Lean practice. While weighted in this data, the author manages to take a balanced and incisive discussion without overwhelming the reader. I recommend this to any involved in the development or pursuit of Operational and Manufacturing excellence.

Sunday, 24 February 2008



Just finished another key meeting? Worked hard, challenged the Status Quo, pulled the team to a consensus?

Did you spend your time on the right issues?

If you are a senior or executive team, the benefits of rapid reporting, accessible data and of course your own team’s deep knowledge of the operation can blind you to your real role.

Should your team be focusing on the last and next day, reflecting on the last or next month, or the next year or two? And then if you decide you are looking ahead, who does focus on the other timeframes?

Balancemark™ is a new process designed to show you where you and you team’s heads are now and where you want to be. Get that right, empower your Operations teams to manage the here and now and start carving out the future your business deserves.

Friday, 1 February 2008

Site strategy

What’s the difference between a site with a strategy and a site without?

It sounds like a one-liner joke, a simplistic question, but it is at the heart of a site’s success. Machan Consulting has helped numerous businesses develop a strategy for their future: a plan to overcome far eastern competition, a roadmap to reverse poor efficiencies and customer service, a means to forge a unified workforce.

Can every site strategy deliver on all of its aims?

No, of course not. Can a site achieve them without a strategy?

Sometimes, if you’re lucky. So the answer to the one-liner? One believes in luck and the other doesn’t. Which do you want your team to follow? Have a look at our site for how to engage us and reduce your dependence on those dice. If you just feel the need for some guidance, go to our contact page on this website and ask for our free one pager “Sitestrategy guide”.