Reasons LLC. Because they can understand about

Reasons regarding why
the LLC should measure the performance

·        
Some workers are paid by the amount of
work done

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Plumbers
are paid by the lengths of pipes laid. Electrical installation technicians are
paid by regarding the wall outlet amount and wire lengths.

·        
For promoting the current employees

By
measuring performance the improvement of the current employees can be detected
and can be considered for promoting, which is both beneficial for the company
and the employee.

·        
For recruiting new employees to sections
where more performance is required.

If
some section needs improvement or development it can be observed by measuring
the performance. So if necessary new employees can be employed to the sections
that need more performance.

·        
Help the owners, subordinates to
develop.

·        
For carrier planning of the workers.

·        
For attracting more investors.

The
outside companies such as the investors will appreciate measuring performance
of the LLC. Because they can understand about how they should invest in the
future on the LLC.

·        
To manage staff performance

·        
To negotiate for more resources.

·        
To monitor strategy execution.

By
the business improvement plan many strategies are proposed to improve the
quality of the business and to increase the profit. So by measuring performance
the company executives can monitor the progress caused by the improvement plan.

 

 

 

 

 

 

 

 

 

 

 

 

Cost

Cost performance is a measure of value of the work
completed compared to the actual cost or progress made on the project. It is a
measure that can be easily and primarily used.                                                 Can
be used to determine if the expenditures are perfectly on budget, has over run
the budget or under budget. It is proposed to LLC to use the cost performance
measure to keep track on the customer charges and the work done. It is like an
evaluation of the work done. And further as an example when a renovation job is
done the cost performance measure can be used to determine if the project was
on budget or not. It will help the LLC to adjust their services prices or to
adjust their work done according to the cost performance measure and keep the
project perfectly on budget. So the LLC benefits a profit and does not risks
losses by over-running the budget as well as the customers get a quality,
promised services according to their expenses.

                        Anyhow
as the LLC does not have a specialized personal to carry out the necessary
calculations to determine the cost performance measure it might be difficult to
execute. But using a computer software Janet might be able to do it as a start.
It is also included I her training program. And as the LLC does not currently
have a quantity surveyor, it might be difficult to predict the budget for a
certain task. So it also not accurate to use the cost performance measure with
a guessed budget. But with the experienced staff they can have good guess about
the budget.

 

OEE-
Overall Equipment Effectiveness

OEE considers three sub components of the
manufacturing process. Availability, Performance and Quality. After the various
factors are taken in to account an evaluated value for each of above component
can be achieved. Finally using the following formula the result is displayed as
a percentage.

It is proposed to LLC to use the OEE measure to the warehouse
and the plumbing department. A lower OEE measurement can be observed in the
current jobs done by the plumbing department. As an example, they lack of
piping supplies and bathroom parts in the warehouse. So Availability variable displays a lower value. The team performance
as well as the quality of the materials are not guaranteed. So the Performance variable displays a lower
value. The quality of the final outcome is also not to the expected quality and
had to re-do. So the Quality
variable too displays a lower value. So accordingly the OEE is significantly low.
This can be identified just by OEE not just by words but by percentages. So the
company can set goals and SMART objectives referring to the OEE of jobs done.
As an example “The plumbing department should display an OEE of 65% by the end
of June 2018”.

The company will benefit more profits by maintaining a good OEE.
It will increase the output using the existing resources and increase the sales
margin by reducing the cost.

The OEE is introduced
originally to be used in production facilities. So the Availability,
Performance and Quality is evaluated. But as a start the LLC can benefit from
the OEE measure. Also a quantity surveyor is required to carry out the
necessary calculations. But with some software help Janet can carry out the OEE
calculations.

 

 

Material
Saving

As the name suggest it is the save of materials. It
defines as the minimum but sufficient use of material usage for a particular
job.

Which leads to two major aspects.

·        
Cost saving

·        
Cost reduction

It is highly
recommended to the LLC to consider Material saving. As already there is a
significant material wastage present. Executing this measure the cost saving
and cost reduction will occur automatically and the LLC will not face losses
caused be wasting.

Currently the warehouse
stores more wood material than plumbing material. The wood material is more
vulnerable to damage by insects and natural causes which leads to waste. So by
a proper management in the warehouse it can be reduced.

Further, some jobs had
to be re-done because it was not carried out properly at the first time. So
that is also a waste.

It is recommended to
the LLC to execute material saving measures to stop theses unwanted and
preventable losses. Also this measure can be simply executed without the use of
much mathematical needs. Just by simply advising and encouraging the workers to
reduce the material wastage.

The head of the
plumbing department Andrew does not have his team fully under control. So there
some difficulties can be expected when addressing the plumbers and workers
through Andrew to reduce the wastages. It is recommended that a higher officer
of the company should address them.

The plumbers have been
not very friendly for some time. So changing their attitude to save the
material and time might be difficult. So some personal development programs are
suggested.

David, in the warehouse
manages his work by hand written books. That is the reason for excess wood
material and lower plumbing material. So to address that issue it is better to
use a computer. But David has some difficulties using a computer and he is not
used to. But after the training sessions he might be able to manage it and
prevent the material losses and give more attention towards material saving.

Balanced
Score Card

Balanced Score Card is
planning and performance measure which takes in to account non-financial
aspects of corporate performance. As an example customer satisfaction and
business process, to predict how the company will perform in the future with
the changed done at present.

It is highly
recommended to the LLC to consider a Balanced Score Card. As an example just to
boost the current earning LLC can reduce the quality of the services provided.
But it will definitely lead to customer dissatisfaction and the future earnings
will fall.

The LLC can consider
their present services to execute this measure. The plumbing department can be
trained and motivated to it will benefit the company in the future.

The Balanced Score Card
is a costly and a time consuming tool. The correct use of this tool requires a
clear understating of the process and objectives. For maximum effectiveness the
entire company should understand the theory behind this system. For the LLC
costly solutions are not much recommended as a profit downfall is already
present. Rather than that it is a time consuming tool. The correct assumptions
and decisions should be made in order to get a good result. But currently the
LLC does not possess an asset with that capability.

Also as the Balance
Score Card targets a future development some employees may resist. Some of them
might need a good today than a better tomorrow. So that is also a drawback of
this method when applied to LLC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Processing Measures.

 

Flow-
Flow is defined as the perfectly times task completions required for the final
outcome.

As
an example while a renovation, plumbing and electrical wiring should be done
first, then cleaning the left over debris and finally the carpeting and final
retouches should be done. 

The
Flow is introduced to measure the performance level of a company which produced
products. But as the LLC provides only services for now it is rather not much
suitable to evaluate the performance by this. Anyhow as the LLC is still a
developing small company that is not much of an issue. It is proposed to keep
track of the flawless work in order to provide the customer a quality service.

Takt
time
– Takt time is the maximum amount of time in which a product needs to be
produced                               in
order to satisfy customer demand.

                        At
the start of every job the LLC promises a maximum amount of time they require
to complete the relevant task. So the service must be provided well within that
time period to ensure the customer satisfaction.

                        This
is also introduced for production facilities. So it is also not very suitable
to measure the performance of services. But as the LLC can agree upon a maximum
time period to complete the renovation project, that time period can be
considered as the takt time. And the relevant task can be considered as the
product. It is not much accurate. But as a start to measure the performance it
is proposed and it is good enough.

Pitch
time- Takt time x Pack-out quantity = Pitch time

                        This
measure the average amount of jobs done and the time taken, by the LLC. So it
is a great way to evaluate the performance and maintain it. It is proposed to
maintain a bar graph for each month vs. the pitch.

                        Also
introduced for production facilities. And it is not accurate even according to
the formula.  Takt time x Pack-out
quantity = Pitch time is the definition. But regarding the LLC it is Takt time
x Services completed = Pitch time. It is a change of the original formula. And
not much applicable to services. But again, as a start it is good enough to
keep track of the performance.

 

 

 

 

Tools that are proposed to use by the LLC to improve
the business performance.

 

Kaizen

In business, kaizen
refers to activities that continuously improve all functions and involve all
employees from the CEO to the assembly line workers.

Kaizen (Continuous
Improvement) is a strategy where employees at all levels of a company work together
actively to achieve regular, higher improvements to the process. It combines
the human resources within a company to achieve those goals easily.

Kaizen is recommended
to LLC as the company needs a huge improvement. The company executives are to
be trained, computer software to be updated and many other improvements can be
considered. Warehouse management can be computerized, the plumbers can be
motivated. The intention of all these changes is to achieve the company
objectives as a whole.

There is already a lack
of communication among the staff if the company. So it is hard to convey this
process throughout the company. Also some of the workers might be reluctant to
change as it has become their habit. So a small steps of changes can be carried
out. And with the profit fall of the company many changes cannot be done at the
same time if they cost money. That is also a draw back. So small changes that
does not cost money or cost a least amount of money can be executed such as
motivating the employees to work harder and well enough to bring back the
company back to its glory, and also making them realize that they will benefit
the improvement of the company.

The following is a simplified flow chart of Kaizen
to LLC

 

 

 

 

 

5S

The 5S Method is a
standardized process that when properly implemented creates and maintains an
organized, safe, clean and efficient workplace. 5S is often one element of a
larger Lean initiative and promotes continuous improvement. Also ensures the
pleasant and flawless working environment.

·        
Seiri / Sort: Removing the non-essential
items and keeping essentials closer.

·        
Seiton / Straighten: Giving every
essential item a proper place.

·        
Seiso / Shine: Cleaning the work area

·        
Seiketsu / Standardize: Establishing a
system to and make 5S a habit

·        
Shitsuke / Sustain: Establishing a safe
and sanitary work environment.

The LLC can benefit the
5S method. The company workspace can be modified according to the 5S method. As
an example the offices. Also the warehouse can be easily managed by introducing
5S. For instance if a certain size of pipe is always required, it can be placed
nearby so it saves some time. Also the expired and damaged items can be removed
to free some space. With 5S introduced the waste of materials will be also
reduced.

Although 5S is a very
effective method it takes time and practice to establish. So with all the new
changes in the company this kind of change might confuse the employees. So it
is recommended to apply 5S method after the employees have settled with the
other changes. With this method too some workers might find it useless to
change according to this. So some motivational speak and guidance is required
along with the introduction of 5S.

 

Visual
Management

This is a business
management technique employed where information is communicated by using visual
signals instead of texts or other written instructions

Visual management is an
alternate way to keep track of the work to be done instead of to-do lists and
spreadsheets. It simplifies the complex works and saves time.

The LLC can use task
board, project board or Kanban/Lean visual management board. Especially the two
brothers, John and James Rogers can benefit this. As an example the To-Do work
can be presented on a white board with color coded sticky notes. It is also
very pleasing to look at and would not be missed like having it in a diary or
in a computer.

The monthly improvement
charts are recommended to display, visible to all the employees to encourage
them as well as to have a clear idea of the current situation of the company to
all the workers.

Also as the all the
employees can see the task board, if used, it establish a better communication
among the employees.

The major drawback is
that some workers might still miss the information expressed visually as they
are used to get it verbally from their chief. So some confusion can arouse. As
the LLC is a renovation company in the engineering field the information
expressed by this method may be insufficient for some special tasks. So they
must be carefully studied while the process is done and changes should be made
accordingly. Also sometime the visual management might cause a distraction.

 

Line
Balancing

Line Balancing is
leveling the workload across all processes in a work flow to remove bottlenecks
and excess capacity. This reduces the waiting time and maximize the efficiency.

It is proposed for the
LLC to consider using this tool. As an example the supervisors can guide the
carpeting crew just after the floor is being cleaned. Until then the carpeting team
can be engaged in another project. The idea is not to keep any team waiting for
another team to finish.

This method is more
practicable towards a production facility although it is recommended to the LLC
because of its simplicity and easy to execute and because it gives better
results. As the LLC is currently engaged in providing services this method is
rather not much practicable. But it is recommended to try it to see the
outcome.

 

Proposed
Diagnostic tools for the LLC to evaluate the performance.

 

Tools under the following three categories are
proposed to the LLC to diagnose the performance of the jobs handled by the
company.

Manual-

It is manually checking
if the job has met with the agreed and needed requirements and standards. It is
a rough but reliable assumption.

As an example the
supervisors are instructed to manually check the work, while and after the job
is carried out. They can visually see (Visible check) if a certain pipe or
bathroom fitting is properly installed. If it is not they can advise the
workers responsible accordingly. Further they can check an erected fence by
inspecting it. They can give it a little shake and test the steadiness.

The LLC currently does
not have many supervisors to handle all their jobs. Also with the present
attitude of the plumbers they might not like to see another person evaluating
their work and may resist. But this method is recommended to carry out as
practicable as possible to ensure the customer satisfaction.

 

 

 

 

Electronic-

This is the usage if
various software, meters and gauges to evaluate the quality of the work.

The LLC can use a
pressure drop meter to check the plumbing leakages. And multi meters,
insulation testers to check and inspect the electrical installations. This is
also recommended as it gives a more clear and numeric evaluation rather than
the manual check.

But with the current
income and profit of the LLC, buying new test equipment is not practical. But
the staff can be encouraged and trained to use the existing devices. Here again
some workers might refuse or may be reluctant to change their previous habits.

 

Verbal-

Diagnosing with the
help of communication with the use of words.

Asking- Questioning
the employees about the work done. And consulting with the professionals to
identify any problems. The LLC can benefit with this. This is more achievable
with supervisors and managers. They can ask the workers about how the job is
done. And if any need comes across they can consult a professional person to
address that issue.

Likewise, the managers or team leaders can question
the customer about the customer’s further expected improvements, current
defects, and discuss. This is much recommended because it can lead to great
customer satisfaction.

Writing-
As an example “Job feedback cards” can be introduced to the workers. They can
fill it according to the issues. And customer satisfaction forms are proposed
to present to the customer to get the customer’s ideas about the service.

As the LLC has lost some of its valuable customers
it is not ideal to ask the customers to fill out customer satisfaction form at
the very beginning. They might find it disturbing. So it is recommended to wait
until the company builds up again.

 

 

Benefits
from above discussed lean programs to the LLC

 

Lean Programs are a systematic
method for waste minimization within a company without sacrificing productivity
and efficiency. Lean also takes into account waste created by over-burden and
waste created through bottlenecks in workloads.

 

Top Lean programs proposed for the improvement of
the LLC.

 

5S

·        
Seiri / Sort: Removing the non-essential
items and keeping essentials closer.

·        
Seiton / Straighten: Giving every
essential item a proper place.

·        
Seiso / Shine: Cleaning the work area

·        
Seiketsu / Standardize: Establishing a
system to and make 5S a habit

·        
Shitsuke / Sustain: Establishing a safe
and sanitary work environment.

As discussed in the previous section the advantages
of this programs are listed below.

§  Less
Waste (Improved Efficiency)

When
applied to the warehouse the wastage of materials will reduce. Thus the cost of
purchasing new materials to replace wasted material will stop saving the cost.

§  Reduced
Space Used For Storage

§  Improved
Maintenance

§  Improved
Safety

§  Better,
More Committed Employees.

With
motivated, enthusiastic employees the company can output their final service in
less time. Decreasing the tack time. This improves productivity, effectiveness
and improves customer satisfaction.

§  Improved
Quality

With
a tidy, neat work environment the workers work with enthusiasm and a good quality
outcome can be expected.

 

The LLC might face some problems when implementing this lean
program. The employees might resistant to change. This method takes time to
implement and sometimes it may cost money.

 

 

 

Kaizen (Continuous Improvement)

A strategy where
employees work together proactively to achieve regular, incremental
improvements in the manufacturing process.

Benefits of Kaizen

§ 
Reduces waste in
areas such as employee skills, waiting times, transportation, worker motion,
excess in warehouses.

·        
Reducing waste the
cost of materials decreases. This leads to profit.

·        
Reducing the waiting
times the overall efficiency of the work done is increased which cause great
customer satisfaction.

§ 
Increases product
quality, the use of investment, production capacity, communications and employee
retention.

·        
With the increased
product quality the customers become more satisfied.

·        
Also the
shareholders become interested in investing.

·        
Increases
productivity leading to increment of the profit.

§ 
Increases the
employee satisfaction.

·        
The more satisfied workers
will result in an efficient, effective workflow resulting a good quality final
outcome.

 

As before these methods are new
to the LLC. So the present workers might find them useless and may be reluctant
to change. Also the employees should be trained to this method after
introducing it. That takes some time.

 

 

 

 

 

 

 

 

Six
Sigma

A set of management techniques intended to improve
business processes by greatly reducing the probability that an error or defect
will occur.

“Six Sigma is a method provides organizations tools
to improve the capability of their business processes. This increase in
performance and decrease in process variation lead to defect reduction and
improvement in profits, employee morale, and quality of products or services.”  (Benbow, 2009)

 

The benefits of
implementing Six Sigma in LLC are as follows.

§  Greater productivity

·        
This leads to the
increment of profit and good customer satisfaction.

§  Improved quality

·        
Also leads to good
customer satisfaction and increased profit.

§  Reduced cycle times

 

§  Smoother operation

·        
Smoother operations
cause good efficiency and increases the overall productivity.

§  Reduced operating costs

·        
The reduction of
costs cause the increment of profit.

This method also faces
the problem of the employees not been used to this. And they are reluctant to
change. To establish and monitor a process like this it is better to appoint a
separate officer. Considering the current situation of LLC it is not much
practical and the LLC does not currently have such personal at present.

 

 

 

Bottle neck Analysis

Bottlenecks determine
the throughput of a supply chain.

Recognizing this fact
and making improvements will increase cash flow. The benefits of this analysis
are listed as below.

§  Can determine what is slowing down the process.

·        
By recognizing the
certain cause the company can improve the cause that was slowing down the
process and maintain a smoother workflow.

§  By eliminating the bottleneck the overall production will
increase.

·        
This cause the
efficiency, productivity and the cost reduction to increase. As a result the
customer satisfaction will be increased as well as the profit.

This process is
introduced for manufacturing facilities. So it is not much ideal for the LLC.
But it can be applied to some extent at least until the company rises from its
recent downfall.