Increasing Productivity via Technology
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The document discusses how technology, specifically automation, can either enhance or hinder business productivity depending on the efficiency of operations it is applied to. It emphasizes the importance of measuring productivity through various metrics like cost, quality, and flow, alongside a case study that showcases significant savings and improvements in operations with the use of real-time locating systems (RTLS). The central thesis is that technology should complement well-designed processes to drive productivity rather than simply reduce costs.
Increasing Productivity via Technology
- 1. Increasing Productivity via Technology What it is - How to measure – Technology - Case study Terry Rachwalski, MBA CMC @consultingmania #CEMC terry@theconsultinglife.ca
- 2. 1. Automation applied to an efficient operation will magnify the efficiency. 2. Automation applied to an inefficient operation will magnify the inefficiency. Bill Gates
- 3. Where is the value? Strategy Operation • Business model • Perform activities better • Customer value • Cost, quality, time • Uniqueness • Execution
- 4. Decision making framework • Strategic objectives 3 – 5 years? Performance? • 5 best opportunities for growth? • Pain points? What keeps you from growth? SWOT • 5 biggest opportunities for productivity? • Barriers to increasing productivity? • How will we measure?
- 5. COST vs FLOW COST - re-work, reducing waste & non-value add FLOW increase includes COST items + Increased output Improved quality Decreased lead time Why flow? Increase sales and productivity
- 6. Earnings Salaries VAPE FTEs Cold facts: Value Added per Employee + ROI = Productivity
- 7. Value? + What to do more of ? Less of? + Compare VAPE and ROI + Does the technology add a strategic value? = Make it so!
- 8. Barcode 2D tag code Quick response code 12 digits Sends to a web site Sends to a web site Standardized Need smart phone + app Need smart phone + app Need line of site Close proximity Close proximity Close proximity Design! Retail !
- 9. Smart cards Magnetic stripe Access Control Access control More secure 125kHz Finance, border control, Mag stripe less secure Close proximity security
- 10. Active RFID & RTLS GPS/cell Passive RFID Transmits Needs antenna Poly tag Needs battery Standardized Longer range More data Indoor Outdoor alt: WiFi Fleet management 1-3 m read range Tracking Need reader + antenna Need reader + antenna Time Retail/inventory Warehouse Value added features Warehousing High value assets
- 11. Handheld Devices Mobile Forms Versus Visibility Smart Phones Lone worker safety Needs Ruggedized Smart Phones Combinations of Barcode/passive readers technology & Mobile Work Force business Retail/inventory management Warehousing intelligence
- 12. Case Study: real time locating inventory • Before RTLS (Monthly) – Labour – 4 people per shift $16,000 – Rush shipments & late charges $ 5,000 – Halted or slowed production lines $12,000 – Total $33,000 • Cost with RTLS (Monthly) – Labour – 1 person per shift $ 16,000 – Labour re-assigned to high value work – Rush shipments & late charges $ 2,000 – Halted or slowed production lines $ 5,000 – Total $23,000 – Monthly Savings $10,000
- 13. ROI & VAPE • Technology saved $10,000 per month • Capital cost of $100,000 ROI = 10 months • Re-assigned labour increased profit • VAPE: increased 10% per employee • Improved client relations = differentiator
- 14. Where’s the sweet spot? Technology doesn’t solve bad process Stick to value & profit Productivity is in flow not just cost reduction Value added per employee + ROI + strategic value Combine business intelligence & technology
- 15. Questions? Terry Rachwalski, MBA CMC terry@theconsultinglife.ca @consultingmania Next up: Eric Anderson - Business Intelligence