What is a Long-Range Plan? How to create it

Are you thinking about improving your business? be the best player in the market?

In the fight to get to market, the companies often forget key elements, for example, stabilize their mission and vision to ensure the business in the right direction. As you guess the company often lost its direction also in this situation remains to be successful in a short time.  Create a Long-Range Plan helps to keep the most profitable status in the market.

What is a Long-Range Plan? to be fast, a Long-Range Plan is a document that acts like a map, where the company stabilizes clearly how they are going to get their goals and how they want to take a position in the market. It allows to accurately prioritize work, and have under control your growth and results. This document frees you from the troubling cycle of day-to-day planning, no need to say that this Long Range Plan doesn’t save you the little problems that you can find on your day today. But you have an important vision of where you want to arrive.

Furthermore, a Long-Range Plan helps you to manage your company at a strategic level and research strategic topics through how the market moves. You have to consider include this plan in your budgeting process and forecasting how the market will be moving.

Let’s try to introduce how to create a Long-Range Plan in your company with some tips to have in consideration.

• Mission and Vision Statements 

One of the first topics that you ought to be clear is your company’s Mission and Vision, they serve to stabilize the business the company policy, creating an approach to the market. It is important that your company is aligned with a good mission and vision statement. At this point, you have to spend time understanding which is your brand identity, what you want to do, through co-working with the company’s stakeholders and shareholders in order to define a clear vision.

This process can take a few weeks owing to you have to schedule a few meetings with the company superintendence, in these meetings you will incubate ideas, including decisions to clarify the right company direction. Once the plan has been created, it can be consulted whenever there is a change in the strategic commercial and should be adjusted.

• Define Goals

To have clear the goals and identify them, you have to ask you, some questions to understand which is the meaning and the purpose. Going furthermore the questions are:

1. What do we do? What do we want to do?
2. what are our weaknesses and strengths? DAFO Matrix
3. What opportunities should we consider in the market?
4. Where do you see your business in one year from now? 5 years? 10 years?
5. Have we resources to go there?
6. Is there a potential customer base?
7. Is any player in the market that does the same? will they do the same?

In base of these questions, you can start to define your goals. Keep in mind that your company must be aligned in this work.

• Write the plan

In this streamwork, you can involve the people that you can think is important, for example, owners, directors, senior executives in writing the plan.  The Longe Range Plan should be a guide for all areas in the company:

• Market approach
• Marketing communications and message
• Measurables Sales and Operational goals
• Customer Oriented

And the last step is to put in march all this information and ideas. Try to assure all the company in the same mission with focus its goals. And Review every quarter if the results are going well or you have to change

Good luck!

Autor: Emilio

Asset management model

All the companies are of the sector that is, count on commercial, productive, economic objectives, etc., according to the demand of the needs these are covered with internal or external resources. Having said this, and based on the logic of financial profitability, all companies are betting on subcontracting rather than on own resources, as well as on the purchase of services or products, and at this point we see how the supplier market is becoming more specialized.

Made this introduction, by all known, to have a proper asset management is necessary to manage a multitude of suppliers, with their specialties, details, covering the needs but integrating it into a whole.

Goals.

The biggest objective is to sell as much product as possible, with the best quality, satisfying the customer and with the lowest possible cost, thus achieving the highest profitability and possible benefits. From here it branches into production sub-objectives, availability, reliability, maintenance, safety with the least impact on the customer.

Weighting of objectives.

Each of these objectives is measured differently in each of the companies, and mainly they will have a very different weighting in each one of the companies, since it influences the sector to which they dedicate themselves.

Structure of the service.

In order to meet customer needs, the activities within the company must be clearly differentiated. So let’s see what we have:

• Audit: Measurement and valuation activities of what you are doing.
• Consulting: strategy to follow in the present and future.
• Training: if necessary training in the preparation of new services.
• Engineering: design and calculation of the needs and resources needed to achieve objectives.
• Implementation of models and plans designed in the engineering phase.
• Control: measurement and assessment of what is being done at any time.
• Decisions: actions that must be carried out in the model to adjust in the deviation of the defined objectives.

Business contractors.

Within the pool of contractors that can meet our needs, we must carry out a market study to ascertain the degree of adaptation of the service offered by the companies, negotiate with each one the service that is willing to cover with the greatest balance between necessity Of the process industry company and the service offered by the contractor company.

Economic calculation of the service according to the intensity of the service.

The unit cost of the contractor’s service is calculated by the intensity of the objective to be covered, for example, the intensity of the environmental impact of the nuclear industry will be higher than the intensity of the objective for the wind industry. Thus, for one case it will be more costly economically than for the other, respectively.

Calculation of the cost of investment of implantation of the model.

Until the stationary phase is reached, investment costs are calculated to start the model, which are amortized over the periods of return on investment.

Once the start phase of the Implementation Project of the Asset Management Model is exceeded annually, a number of resources are consumed by contractors and suppliers. These costs are similar each year, adjusted for changes in CPI and changes in special prices.

Study of return on investment and profitability.

The model itself, in its initial phase, measures and assesses the cost of direct and indirect money from the current asset management. The reduction of costs of direct and opportunity costs, increased availability, reliability, safety and reduced impact on the environment has a positive economic impact on the company, which increases its profitability and its benefits.

Speed of implantation of the model.

Due to the economic cycles of companies and the environment, changes in products and services may be difficult or easier to implement the model.

To do this, once the investment and annual costs have been established, different implementation speeds of the model are proposed, ranging from six months to ten years; Depending on the needs and policies of the company.

Conclusion.

Thanks to this model, you can prioritize what services are needed to meet business objectives. Sometimes it is difficult to establish how much of the supplier’s resources will be needed in each situation, but thanks to the structure of the model in phases, the exercise is performed defining, analyzing and assessing the needs at each moment, as well as calculating its Economic cost.

Quality loss function (Taguchi): How to control the lack of quality in a product

The role of quality loss function, commonly called Taguchi loss function (by its creator Genichi Taguchi, in the second half of the twentieth century), is a calculation tool used in engineering and quality control. This tool is used to evaluate the “quality loss” on a project, product or service with respect to its optimal quality level.

The main goal of ​​ Taguchi’s methodologies are that they are focused on designing and manufacturing products in few time with high quality, avoiding having to use the common “try and fail” method, which is more expensive and slower.

To achieve these improvements, we will have to optimize the product design and the manufacturing processes using engineering quality and statistics.

 

The loss function of Taguchi quality

The loss function gives us a way to calculate the “quality loss” which suffers an analyzed characteristic of our product with respect to the quality goal (the target) that we want to obtain.

 

The loss function is like this:

L = K * (Y – M) ^ 2

L is the result value of the function, generally measured in monetary units.

Y is the target, or ideal value of the analyzed characteristic.

M is the mean of the obtained values ​​ of the analyzed characteristic in the real production.

K is a constant that is responsible for converting (Y – M) ^ 2 into monetary units.

 

Therefore, if for our analyzed characteristic in the product, the value L is zero, this means that the value obtained is our target. If L is greater than zero, then it means that we are moving away from the target.

For example, if the analyzed characteristic (production time, delivery time, cost …) has to be Y = 30unids., but in practice we are measuring that on average it is M = 35unids., and this deviation cost K = 5 $/unit. ^ 2, then the result is L = 5 * (35-30) ^ 2  =>  L = 125 €. It should be noted that the value of L is always greater than or equal to zero, and Y-M grow quadratically, so K must be expressed in the correct units.

 

How to use the loss function in quality control

During the designing and manufacturing of a product all the parameters and the manufacturing process have to be properly controlled. A deviation in some parameters can produce lack of quality, so we have to control them to be in a range where the product is inside the specifications. To have success in this task, is important to define what are the key characteristics, which can produce more lost of quality in the final product, and therefore, they have to be more controlled.

Once identified the key parameters, we proceed to determine their current status, (to analyze if L = K * (Y – M) 2 is zero or is a high value), and later we have to study what are the causes of the quality lack to solve the problems. The next step is to make an interpretation of the results, thus we can make an overall assessment of the quality losses in economic units and implement solutions to minimize these losses as much as possible.

Original post (in Spanish):  https://pdcahome.blogspot.com/p/funcion-de-perdida-taguchi-como-evaluar.html

The McKinsey 7S: Seven basic factors to improve the strategy of any organization

The McKinsey 7S is a model that identifies the seven basic factors which have to be present in any organization.

This methodology is used to check if the implementation of the company strategy is consistent with the reality of the business. If not, you will have to make changes to align strategy with reality.

 

How works 7S?

The McKinsey 7S defines multiple factors to consider, which are divided into two groups:

– Soft skills: Shared Values, Members Skills, Style and Staff.

– Hard skills: Strategy, Structure and Systems.

The model seeks to highlight that the goal is to obtain the perfect combination between the seven factors. Thus, taking into account all factors, we will improve the results of our company.

 

The seven factors to study

The 7S method is composed by 7 factors, connected between them with a central element that is called “shared values”.

The factors are:

1. Style: The style is the culture of the organization. Normally is the direction who establishes the basis of the behaviors and the best practices that will shape the style and the way of being of the company. They should be the leaders and they have to behave correctly to set an example to the other employees of the company.

2. Staff: Employees are one of the most important parts of any organization. That is why the way to behave the human resources may be aligned with the company strategy.

3. Systems: It includes the internal processes and the information systems that enable the operation of the company.

4. Strategy: That is how we manage the company resources to achieve the objectives, considering a long term period. It could be compared with the brain of an organization.

5. Structure: This is the way the company is organized. The structure can be departmental or otherwise, with a linear, matrix, divisional hierarchy or other. It also can be separated geographically (local, state or multinational), centralized or decentralized management, etc.

Structure also may depend on the legal form that has the entity (corporation, limited cooperative, joint venture …) and the expansion model (franchises, organic, mergers…).

6. Members Skills: It refers to the skills and capabilities required by the organization’s members. It can also refer to the know-how of the company.

7. Shared values: The shared values ​​are the heart of the company. It’s what unites its members and aligns them all in the same direction.

 

The best of the 7S model is that it is a diagnostic tool to understand why some organizations are inefficient. Having analyzed the weaknesses and making changes, it will lead to an organizational change that can significantly improve the way of working and the results.

 

Original post:  https://pdcahome.blogspot.com/p/las-7s-de-mckinsey-7-factores-basicos.html

Gantt Chart - How to plan and track a project development

The Gantt Chart is the most widely method used in business planning of activities on all kinds of projects, besides it can also be used to plan any type of activity over time.

The method consists in a horizontal time shaft, and under it you have to put the activities that you want to track. A project is a group of linked activities, so you have to separate each activity and organize them under the time shaft. Each activity is linked with the others and you can select different kinds of links to mark this (for example, the link “end-start” means that when the activity N is finished, then automatically starts the activity N +1). Thus, using this methodology you can find the project’s critical path, which determines the minimum time to complete the whole project. Additionally, you can add to each activity its number of resources needed (workers ) to control costs and the workload of the involved people.

Also, during the development of the project, if you add the progress of each activity (0% = not started yet, 100% = already finished), you will be able to calculate the delays and the cost of your project, and reschedule the activities to end as soon as possible.

The Gantt Chart methodology is usually applied using software applications. The most used is Microsoft Project, but you also have many others programs, as Gantt Project (http://www.ganttproject.biz/) which is free and it works on Windows, Linux and Mac. Gantt Project also include a portable version which does not need installation (very useful if you’re on a company and your computer doesn’t have administrator access).

Below this, you have an example: A “website designing and development ” project, where they have established different tasks, with its duration, dates of meetings. Once introduced the inputs, the software has calculated the exact dates of each activity and the finish date, taking into account the holidays and the relations between the different tasks:

Here you have an example of the relations between activities and the tracking of a a project using a Gantt Chart:

 

Original post (in spanish):  https://pdcahome.blogspot.com/p/diagrama-de-gantt-planificacion-y.html