The answer has 2 parts; one where we play nice, one where we speak out.
In the first part of the answer we’ll play nicely in the sandbox and just lay out the facts for you.
In the 2nd part we’ll be a little more opinionated, because we get very frustrated when we are “tarred with the same brush” as some other consultants. Many management teams are extremely cynical towards consultants as a whole, as a result of bad experiences – often experiences that get repeated with more than one consultant.
Fortunately for us, 90% of our business is as a result of word-of-mouth recommendations from our clients to colleagues and friends.
But when we are dealing with a company that has heard enough about what we do to be interested, but doesn’t already have that colleague-granted comfort level with us, the initial skepticism and even hostility can be an eye-opener.
Part I: Just the facts, point by point
- Our results typically hit the bottom line quickly, directly and substantially, with the minimum amount of time and effort possible. It is not unusual for a Theory of Constraints project to pay for itself many times over during the life of the project – not with spurious “cost savings” but with more money made, cash in the bank.
As I originally wrote this we were just a few weeks past “Go Live” with one client and they had already invoiced their customers for additional shipments, as a result of our efforts, that will contribute more to their bottom line than our total fee. Now, that’s exceptionally fast even for us, but it is in line with what we typically achieve. (We have more fees to come … but they are a percentage of additional Throughput generated. No results, no fees.) Today we’re 5 months in, and they’ve billed more than $500,000 more than they would have prior to the implementation; and much more than 50% of that is contribution to the bottom line. I believe they have added one full time and one part time person to relieve some capacity challenges. You can see the impact.Another client … very small … we’re still in the middle of conducting an Assessment but they’ve already implemented some “low hanging fruit” practices as a result of our workshop that mean they’ll have paid for the Assessment and some of the implementation we hope to perform, before we even present the Assessment findings to management.
- Our approach generates highly customized implementations. We don’t have a “follow the checklist, it worked for someone else so it will work for you” mentality. The PRINCIPLES of what we do don’t change, but the shape of the implementation is always customized..
- We ARE applying principles – this isn’t “shoot from the hip,” “trust us, we’re experienced” consulting where the consultant departs with (perhaps) a problem solved, but with no improved internal ability to repeat the improvement or apply the same principles elsewhere.
The Theory of Constraints has an almost 30-year record of outstanding results, and we are experts in this technology with a combined 33 years of TOC experience. There’s a set of principles that we pass along so managers can use them for sustained results beyond our involvement, a vocabulary to assist precise communication and support understanding, a suite of measurements that make sense from shop floor to the boardroom.
- Our approach is one that gains enthusiastic buy-in from virtually everyone in the organization, every level, every function. In one implementation, the GM who initially contracted our services left to join a different company midway through the implementation. Senior and middle managers took the arms length but intimidating owner aside to say, “If you don’t continue the TOC project he started – we’re out of here.” That’s a “my job on the line” type of stance and not one that people undertake lightly.
Yet that’s the type of commitment we typically generate. A machine operator from one client moved to a different part of the country, and we received a phone call from a bemused GM who said he felt he just had to pass along that after 2 weeks in his new job, this machinist had walked into his (the GM’s) office and told him that he needed to hire Synchronix. Now, that’s buy-in.
- We gain that depth of commitment partly because what we advocate makes sense to everyone from the CEO to an engineer to a project manager to a machine operator. Theory of Constraints is simply common sense … when you know it.
But mainly we get that level of commitment because of our approach. We don’t walk in saying “stop that, do this, this is bad, this is good.” We could – but that creates nothing but obstacles and objections and short-lived changes that would start reversing themselves the day we walked out of the plant. We don’t tell people what to do – we teach them what they need to know in order to work out for themselves (with our very careful guidance, of course) … exactly what to do. Then we help them, as much or as little as they need, to do it. We use our experience to help them make it happen as quickly and smoothly as possible. And we bring our systems experience to help them have the tools they need to see sensible systems in place and being executed well.
This way it becomes their system, from the beginning, even if we do a lot of the work in the implementation. There’s no defensiveness against what we’re advocating. Instead there’s a high degree of ownership. And it may be counter-intuitive but this is also the fastest way to make REAL changes – changes to things that matter, changes that “stick.” Managers who have used us and also used the high-profile traditional consulting companies provide some interesting insights.
- We will personally work at whatever level it takes to produce results. Is high level Theory of Constraints and Synchronous Manufacturing education all you need? Fine. High-level involvement in the system design and also in the implementation planning and implementation itself? Fine.
But many companies are so lean at a management and staff level they also choose to use us as “resources” to do necessary things their own people don’t have time to do, or to learn how to do. That’s fine, too, provided we do it in a way that does not take away ownership of the system from the users. We’ll roll our sleeves up and develop a shop scheduling system. Or help a worker on a capacity-constrained work center find a way to do his/her job better, or help a team systematically approach a set-up reduction project, just as readily as we’ll help top management set a new direction for the company.
Our clients will tell you that when we return, even years after implementation, we’re as welcome on the shop floor as we are in the front office.
- In Synchronix, the gray-hairs actually do the education and consulting, we don’t just sell you on the project so some fresh-faced kids straight from college can come in and try to deliver. We average 35 years of experience in business and consulting, and we make that experience count.
Part II: A small rant
The single biggest thing that differentiates us is the sheer speed and magnitude of results, certainly in terms of competitive edge improvement but more importantly, in bottom line impact.
As I’m writing this it’s 2 weeks since “go live” with a hurried implementation, performed for a client with some serious problems following major changes in the plant. As a result of our implementation (and their execution, which has been solid) they are currently averaging 24.3% more out of the door every day, in a situation where they are back-logged and have been letting customers down on delivery. (Update: 3 months later the average is 26%.)
In addition to shrinking their quoted lead time (as they chew-up the backlog with the improved productivity), improving on-time delivery (as they use the scheduling system we built to promise delivery with confidence), that increase in productivity is worth close to six figures a month in added net profit.
The starting improvement typically increases over time. But even without those added increases our efforts will have generated this company a high-6-figure or even a 7-figure Net Profit difference in the following 12 months.
How’s that for impact on an already well-managed company with sales in the $5 MM range? It took us 3 weeks from “go” before we switched the system on in trial mode; then 2 weeks of refinement before we were ready to go full-bore.
In contrast we visited a business recently which had been engaged in what they considered to be a Lean “initiative” for close to a year. They showed us their shadow-boards where they now kept tools, the tidy work areas, told us proudly how many Kaizen events they’ve undergone, and walked us through the new plant lay-out they were about to implement (involving cells, naturally).
The three questions we always ask:
- Are you/will you be shipping more as a result of these improvements? (The answer was “No, but existing growth continued” … however their on-time performance was poor and getting worse and their lead time was much longer than customers wanted.)
- Has your Investment (in plant, equipment and inventories) been seriously reduced? (Again, “No,” but they were confident they’d reduce the WIP when they finally implemented the kanban system that would accompany the changes in layout. And an update: 6 months further along, 18 months since starting, they have seen an improvement.)
- Have you reduced Total Operating Expense substantially? (“No.” Same number of people, and in addition they’d paid 6 figures so far for consulting help.)
Rod and I walked away biting our tongues. The plant was a Theory of Constraints consultant’s dream, such that within 2 weeks, 4 at most, with no changes to plant layout, no kanbans, no Kaizen events they could have dropped cycle time by 70% and hit 99% on-time delivery (definitely possible in this environment) AND freed-up about 30% capacity for growth. I mean … what HAD they been doing for a whole year?
Is the problem “Lean?” No, of course not. While we’d have out-performed a Lean implementation, a competent Lean implementation would have given them great results. The problem was that they weren’t doing Lean. They were playing at doing Lean. And it looked like the consultants were going to have them playing that game for as long as the client’s wallet remained open.
Whereas our client in the example at the top mapped nothing; made no changes to plant layout; drew no tool shadows, or improved any set-ups. Just, changed a few crucial policies and procedures, implemented our scheduling approach, then executed.
Our Client’s results aren’t luck!
First of all, we worked very hard to make that happen – we’re not talking 40-hour weeks, because the client needed urgent help. And, we had to do almost all the work ourselves. Like many of our clients, the company is relatively small and had no-one internally capable of doing what was necessary, in terms of ability or time, so … we do it. It’s not unusual to find one of us on a client’s shop floor at the changing of shifts at midnight, or watching a machine change-over in the early morning hours. (My partner might tell you with a degree of bitterness that it’s usually him!) But … whatever it takes.
Second, while we don’t always work this way, 75% of our fee from this client will come from bonuses based on banked profits. If most conventional consultants did this, they’d be broke in a hurry. We don’t always do this, most often there’s a 75% to 25% ratio the other way, but we even have one client where 90% of the fee is based on performance bonuses. And those bonuses are paid from productivity growth (10% of total bonus), top line growth (30%) and bottom line growth (60%). Over several years. Not a lot of room for manoeuvre there.
And third … the way we made this happen was without bloodshed, without creating any internal resistance whatsoever to some fairly major changes in policy, procedure, measurements and behaviours. This is because of the years I spent working with Eli Goldratt, who has tremendous faith in the “Socratic Method” where you guide people to “invent” the solutions themselves. (Eli pretty much wrote the rules for putting this technique into practice; I was one of his team at the time.) So this is second nature for my partner and I, and the results are always excellent. We sometimes conduct anonymous questionnaires of employees at a stage prior to implementation, and we typically get 98% to 100% “buy in.” When it’s backed-up with action, that’s powerful.
Now, these are major differences but our clients will tell you of one more:
We visit companies where the consultants got their foot in the door with a sub-$10,000 project … and the project didn’t really accomplish much but concluded with just a hint of better results to come if the company would just invest more (to solve the obstacles that were blocking them from reaping the benefits of the excellent work performed so far …) until, 6 figures later, another 6-figures is being proposed to generate real results (this time).
Well, our clients will tell you: we’re not like that.
We’re up-front with the predicted costs and benefits, we typically see large results in weeks (sometimes in days, sometimes in months … but we’ll warn you of that, in advance, when that’s the case), and the financial returns often make the whole project cash-positive even during its implementation phase.
We explain what the predicted costs will be, and approximate timing. We define expectations from each partner such that if the project slips behind and we didn’t meet our obligations, the additional work is at our expense. But if the client tangibly failed to perform their agreed tasks, we’ll sit down and discuss the best solution. By that time, any project in these circumstances is typically already experiencing a positive Return on Investment, which certainly makes the discussion far easier for everyone.
Interested? Then take the easy next steps.
1. Sign-up now to receive our monthly newsletter, “Inside Edge on Improvement” – where we’ll explain some of the “Insider’s” perspectives, tips and techniques that make an enormous different to the success of your performance improvement efforts.
There’s gold in every edition; we give away “secrets” in these newsletters that not 1 manufacturer in 100 knows. And I’m not trying to hype this up; these literally ARE secrets, in terms of … most manufacturers simply have no awareness of them whatsoever.
2. Schedule a (free) 15-minute phone call. Click the link, give us 2 possible dates and times when we can reach you, we’ll confirm by email, and … let’s talk.
3. Consider inviting us to deliver a 1/2-Day Introduction to Theory of Constraints Session on-site … or to conduct 1-day “First Assessment.”
The 1/2-day session is stunning, and typically rocks managers back on their heels with some of the immediate insights they gain into cause-effect impacts in their business.
And the First Assessment, while only one day, is powerful.
In a single day of visiting your operation and talking to a few managers on-site, we can give you a solid, rational and fully justified sense of the nature and the scale of the opportunity in YOUR organization, the most obvious sacred cows and some of their implications on your performance, the type of improvement you should expect, the general direction of how you could get there from here, and our recommendation for your most sensible next step – should you choose to take one.
Incidentally, my partner and I – with a combined 60 years of industrial experience – do all the work ourselves. Assessments, education, implementation.
And yes … several more steps down the road, if you see that a clear-cut opportunity for massive, sustainable improvement is PROVEN to your management team’s satisfaction, and if you choose to discuss the option of us working with you to turn it into reality … we will certainly consider linking a significant portion of our compensation, to your results. If our approach is as powerful and effective as we claim, why wouldn’t we?
And, offer you terms that give you the potential for a positive cash flow from your improvements while the project itself is still “live.”
So … sign-up now. And schedule that call. It’ll only take you 2 minutes.