WHAT IS IT?
Businesses develop and mature, similarly to the concept of a child growing up. As a business matures it is able to achieve new heights in productivity, the people in the business gain additional experience and find new ways to leverage their time.
The codification of businesses maturing is the 9 Phases of Productivity and the Maturity Model.
There are step changes in business leverage. Step changes that occur when the business discovers an answer to the question “How do I get more from my business without hiring more people?”
Initially businesses increase leverage by buying / hiring and delegating to obtain more capacity. To increase leverage businesses seek to automate, eliminate and reduce the time taken to complete tasks. Processes are established and then codified into standard operating procedures.
A step change occurs… The focus moves from enhancing individual productivity to enhancing the flow of work. Jobs start involving multiple resources, there are milestones and people’s activity becomes dependent on handovers from other people, staff begin to be specialize, and the management of flow, rather than individuals, moves to the forefront of operational consideration. Bottlenecks start to appear and resourcing conflicts develop.
Another step change occurs… Leverage becomes available from managing variability and risk. Management focus is on minimizing work-in-progress in order to accelerate flow.
AN INTRODUCTION TO THE APPLICATION (Layer 2, 3, 4)
Using the Maturity of Productivity determines which phase you have achieved, and which is your current state. We frequently find most small businesses are in phases 1, 2, and 5, and many larger businesses are in phases 3 and 5.
Businesses actively engaged in world class practices and businesses with a culture of ongoing improvement tend to be in phases 4, 6 and 7.
The phases are broken down into a series of tests that you apply to your business. The more of these tests you pass the more gains you have already achieved from a phase. Whether you continue to target more gains is a 'company by company' question and largely revolves around where the cost of the improvement stops being offset by the returns obtained (law of diminishing returns).
The 9 Phases of Productivity gives you extra dimensions to focus improvements such that the diminishing returns are held at bay.
- Continue to improve that current phase
- Advance to the next phase category to leverage business information further
- Advance to the next category to leverage business process further
Businesses chase each of these options already, but what the 9 Phases of Productivity does is create a decision-making structure that maximises your businesses return on investment.
With the 9 Phases of Productivity you will focus on where the best return on investment is, thus:
- You may find you should move to the next phase rather than extend the current phase
- You may find you should go up a category rather than extend the current category
Implementation experience has demonstrated that when we implement a category jump project gains are also made in the lower category phases. This is because there are prerequisites to getting large system wide gains. In short, the 9 Phases of Productivity are used to determine the shortest path to the maximum return on investment.
THE 9 PHASES OF PRODUCTIVITY
The Focus on Data
Phase 1 – Manual: The oral and written collection, sharing and manipulation of data
Phase 2 – Computerized: Jobs and information are in your system
Phase 3 – Enterprise Integration: If a data item is anywhere in your system, it is everywhere in your system
Phase 4 – Supply Chain Integration: If one party knows it, the data moves to others who need to know automatically
The Focus on Business Decision Making
Phase 7 – Constraint Management: Control of materials release tied to bottleneck output
Phase 8 – Buffer Management: Systematic management of risk in advance
Phase 9 – Work Mix Management: Managing the sales and work mix to optimize throughput
Phase 10 – New Market Offers: Delivery of high value market offers competitors refuse to copy
WHY CALL IT THE 9 PHASES ? I SEE 10!
Transitioning a business from a focus on reducing data handling and data errors (Phases 1 through 4) to the phases that focus on process improvements (Phases 5 and 6) and the management methodology improvements (Phases 7, 8 and 9) are prerequisites to being able to utilize Phase 10.
Few companies find themselves able to access Phases 10 and thus, to many, the reality of Phase 10’s high value ‘New market offers’ is unobtainable.
Phase 10 – New Market Offers when done to exploit the commercial advantages of phases 1 through 9 yields massive jumps on shareholder value. Thus, we only recommend a focus on phase 10 after the 9 phases of productivity have been addressed.
WHY SHOULD I USE THE 9 PHASES OF PRODUCTIVITY?
If you want systematic, structured increases in your Productivity Journey then the 9 Phases of Productivity is how you remove risk from your improvement projects. Implementing the 9 Phases of Productivity means you can:
- Compartmentalize the scope of each improvement with discrete start and finish points
- Maintain control and effective oversight
- Stage gate each improvement
- Deploy your limited resources (both people and time) for maximum gain
- Rapidly advance and safely undertake the step changes in productivity
If you are seeking to accelerate your internal improvement efforts then contact us for a consulting day. We are happy to provide you guidance and act as a mentor.