Lean and Six Sigma with Best Practice Workflow Processes

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7b7d1-deutsch_scott_07aI was reading an article by Martha Heller in CIO Magazine the other day, in which Carlos Cardoso, CEO of Kennametal, was talking about their successful implementation of an ERP system. What was interesting to me was his attitude toward his ERP project. Instead of making the project an IT effort, he first made sure that the team focused on better rationalizing their business and workflow processes.

Taking stock of how you currently operate is a major philosophical mindset when looking to implement and configure new technology solutions. At Kennametal, they found more than 6,000 active processes and after rationalizing them, came up with a core library of just 600 processes. This is a staggering difference and I think more common than many would expect.  So many processes were put in place years ago and today are followed because “that’s the way we do things”. Unfortunately, many of these processes are not optimized for today’s business and are robbing you of potential operating efficiencies.  

By using Lean and Six Sigma approaches, you will be able to streamline processes and reduce operating inefficiencies. When Vocollect engages with a new customer about the potential utilization of voice technology, we start with this approach. At Kennametal, they mapped their processes against the standard processes available from their ERP supplier and found that 92% of their processes could be supported by adapting the standard “best in class” processes.  Mr. Cardoso stated, ”With thousands of companies using the ERP product already, our processes should not be so unique that we can’t leverage standard software processes.” When prospects review the potential adoption of Vocollect Voice, they also find our best practice workflow processes map very closely to their desired future state.

Solutions today that support best practice workflow processes help to better streamline operating environments and enable the reduction of overall project support costs. It surprises me when I hear of a project that starts with a white boarding of ideas. If a solution has been successfully implemented with thousands of customers and more than a million users, why would anyone discuss a detailed workflow process without starting with best practices? I understand the question of “what would you like to do”, however, this question should be more around what business issues are you trying to address. But, I still hear stories where the review of workflow processes begins with a whiteboard. What could possibly be the business justification for using this approach today? What executive would justify the funding of this type of technology investment? This “custom” mindset sounds great to the line of business owner, but does not consider the future solution, nor does it consider the opportunities lost through the potential leveraging of new features and capabilities made available from their solution provider. As Kennametal learned, if you start with best practices and map your updated processes to them, you will be surprised how close your processes may actually align to industry best processes.

When you think about improving your operational processes, I recommend you take the opportunity to review what you do, how you do it and why you do it. Question whether individual steps in a process are really needed. Challenge the business value that certain steps in a process provide the business and your workers. Take the opportunity to map your processes in detail. When you undertake this effort, you will find that “emotional owners” will begin to “defend” processes. In order to remove as much emotion as possible, I’d recommend that you video tape certain processes. This will enable the team to talk through the reality vs. the emotion. Lean processes are emotionless. You do what’s best for the business and your workers. And it’s important that you quantify the value of various process enhancements, since so many of these processes are repeated thousands of times each year by many workers. Having gained a better understanding of your processes you will then be able to better map your processes against industry best practice workflows.

When you start with best practices, you focus the team on what enhancements are required to support the business. You will find the team will have a mindset that challenges the business to change vs. a mindset of “that’s the way we do it”. Supporting unique business processes is vital and important, however, as Mr. Cardoso observed, “The IT solution comes last”.

New Loyalty Program Announced by Sheraton… I Only Wish

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Deutsch_Scott_07aI had an online exchange the other day with Sheraton Hotels that made me mad and will have an impact to Sheraton and Starwood revenue for years. It made me think about how you treat “loyal” customers. Most importantly, how do you treat new customers to make them more loyal to you and minimize the opportunities for your competitors? Apparently, Sheraton has so much business that they do not want   me as a new loyal customer. Right now, I am a loyal Marriott traveler and Starwood has done nothing to make me want to be one of their loyal customers. I have spent exactly one night in a Sheraton hotel in 2013. I guess they think people have no choice but to stay at their outdated properties. That was my one and only experience with Sheraton this year. Well, I have a choice and my choice is to NOT stay at a Sheraton unless I really have to.

So what makes us “loyal”?  I think loyalty starts with being respected, having a positive experience and convenience. Think about the various products and services you purchase.  These three attributes are paramount to your decision making to spend your money for various products. The other attribute is the timeliness to participate in the advantages of being loyal. The grocery industry understood this early in the loyally business. Sheraton marketing does not understand this. My friends at United do understand this. They provide immediate benefits to members of their loyalty program and offer greater benefits to those that fly with them more than everyone else

My Sheraton experience got me to think about the “loyalty factor” from buyers of enterprise and business solutions.  Now, I know some of you can tell me about the metrics you use to measure customer satisfaction and how the more satisfied you are the more that these “more satisfied” customers will buy over time.

Paying it forward and the ripple effect

Our organization makes the improvement of our overall customer satisfaction a level-one organizational initiative. Improving the experience and loyalty for our customers and our partners around the world is what has helped make our business continue to lead the market forward. Customers who have moved from competitive voice offerings have specifically stated that the reasons were not just product deficiencies. Mostly, they told us it was the inability of these other companies to properly support their products. The scale of a business really has its advantages in building out a world-class customer support team.

One of the key differences between customer satisfaction and loyalty in my mind is the customer’s ability to make changes quickly. As an example, if you are “unhappy” about your enterprise product implementation, it’s not possible to decide to replace it quickly… not when the solution has just cost you lots of money and 18 months to implement. You may not be satisfied, but you still will use the product and try to make it better. But, for products that are easy to replace, then that’s a completely different story. Which brings me back to my friends at Sheraton hotels.

While all hotels have a “loyalty” program, I want to propose a new product to their marketing teams. And you airlines, listen up, this applies to you as well. I propose that hotels give me an opportunity to show my loyalty by staying with them, but do not make me “earn my loyalty”, starting with from zero nights. Have I not proven as a Marriott Platinum member my ability to spend evening in a hotel?  I have no problem with having to “prove” my competitive loyalty standing to Sheraton. They would get more nights from me if I was able to participate in the perks of a loyalty program from day one that is “equivalent” to the competitive program I already participate in. Now, to protect the hotels, so others do not abuse the “access loyalty”, I must earn my status with them throughout the year. If I do not meet the night’s stay plateau for my desired loyalty level, they place me at the earned tier. Oh, and Sheraton, I’d call it the “Pay Ahead” Loyalty Program. Market the program around the concept that “I know you are loyal and so are we. Give us a chance to earn your loyalty”.

Customer Loyaty

Customer loyalty is what helps every company succeed. In a world of so many choices, it’s important that loyalty is earned each and every day. Now I wonder how I get Sheraton to listen to other loyal Marriott customers.

By the way, what made me mad is that when I stayed at the Sheraton, my room was old, my tv was a 19” from 2005 (at least it was color) and the bathroom looked like it was from 1995. All for the same price as a nearby Marriott… now, why was I staying there?… that story is for another day.

Omni Channel Order Management- A Personal Experience

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Deutsch_Scott_07aI have been writing and talking about omni-channel order fulfillment for the past year with passion. I’ve been one of many leading the discussion around how businesses need to improve systems and infrastructure to support the demands of their customers. The other day, I participated in the execution of an omni-channel order fulfillment process and, boy, was I smiling.

My story begins with me deciding to buy a new TV on a rainy Saturday, so much for sunny South Florida. Knowing that others would also use the rainy day to run various errands, I really was not in the mood to fight the crowds.  For months, I’ve been doing research on what to purchase, now it was time to do some pricing research for the TV that I wanted. After 30 minutes, I found the best price at a well-known and trusted large retailer. 

Normally, I would have just jumped in the car, but this time I decided to try something that I have never done before. I wanted to see if the nearby store had the desired TV in stock. I just did not want to go there and find out that that they did not have it in stock. Think about it, consumers have now been trained to check stock online and they actually trust online information. Linking real time inventory is the heart and soul of successful omni-channel order management. So, I started to place an order and check stock availability. Bingo, the store had the TV I wanted and it was in stock, and I believed them.

Previously, I would have simply abandoned the online order and went to the store to pick it up, but this time I decided that I wanted to have it waiting for me when I went to the store. This store unfortunately is known for its long and slow checkout lines and I was not in a mood to wait 20 minutes to pay for it. So, I decided to select the order option to pick up the web order at my desired store. I also could have had it shipped to my house the next week at no cost, but I wanted to set up the TV that Saturday while it was raining.

To the store my wife and I drive. As I enter the store, I ask where you pick up web orders. The “greeters” were quite helpful and gave me clear directions on where you pick up web orders. As we weave our way to the back of the store, a large sign can be seen clearly indicating that this is where you pick up online orders. Next, I simply give them my receipt that I printed out at home after placing and paying for my online order. Two minutes later, out from the back of the store warehouse comes my TV.

Label from omni channel pickup

It would not have been any easier an experience. I also was impressed that this store had dedicated people in this area. I marveled at how seamless the retailers systems worked. Two years ago, this just was not the case. When people talk about omni-channel order management and fulfillment, this retailer gets it.

A world of Change has occurred in Retail.

Omni channel order fulfillment

As the graphic above shows, our industry has gone through tremendous change in order to reach the present day omni-channel state. My own experience helped me witness first-hand some of these changes. Many of these changes we take for granted. By my TV buying experience, here are some example changes that we take for granted:

·        Real-time linkage between a website and a retail location

·        Access to real-time accurate inventory

·        Back-of-store inventory fulfillment processes

·        In-store signage supportive of another sales channel for the retailer

·        Dedicated staffing from a different channel within the retailer

·        Willing customers to pay for something online and believe it will be ready for pick up as expected

I am enjoying my new TV and was fascinated by the personal experience. I think the next major retail battleground will be brick and mortar retailers fighting back against pure e-commerce retailers and leveraging their local inventory to provide them a competitive advantage.  But, that’s for another column.  By the way, I was not alone picking up an online order. The person before me picked up two new tires.

The Adoption of Voice Technology Is All About Improving the Bottom Line

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Deutsch_Scott_07aThis is the Time of Year that Businesses Really Appreciate The Value of Voice Technology Solutions

Many of you are probably putting together final revisions for your 2014 plans. I’ll place an educated bet that for most of you, one of your top five initiatives will focus on streamlining business processes to reduce your operating costs in order to achieve targeted operating margins. This is my favorite time of the year. It’s a time that businesses really appreciate the value of our voice technology solutions. It’s especially a fun time because when we engage with management that is thinking about achieving strategic objectives, the significance of our voice solutions increase in business value.

While reading the recent WH Smith’s quarterly financial press release, I could not be happier to see that their high street operating profit rose 4 percent to £56 million. They communicated that “savings in its supply chain played a vital role. Systems such as voice picking have contributed to an overall saving of £18 million across its high street business, meaning that profits rose despite 7 percent drop in sales.”

Measuring savings attributed to implementation of voice technology is nothing new, but it’s always exciting to see organizations who mention their operational success in financial press releases.  We continue to measure the hard dollar (and euro and pound, etc.) savings that our customers obtain annually from their use of Vocollect Voice. In 2013, the amount will exceed $20 billion. Check out the live savings counter at http://www.vocollect.com/feature/savings. This value is as of November 15, 2013.

Vocollect Savings Counter 15 November 2013Now you may be wondering how this savings counter is actually calculated. It’s really quite simple. We looked at an “average burdened hourly rate”- and we ended up using $20/hour. While most of our customers can point to improvements in productivity throughput well above 20 percent- some even report 35 percent positive results – we decided to use a pretty conservative 15 percent improvement in overall productivity. We then multiplied the number of Vocollect Voice users each and every day. The number using Vocollect Voice is approaching almost one million each and every day. It’s that simple of an equation. And it’s amazing how much of positive impact voice technology can have to your bottom line.


I think one of the most positive endorsements for the success of using voice technology can be found within the recent report from Supply Chain Insights on the Power of Voice. The author asked the respondents about their overall satisfaction of their warehouse operations. Those using voice indicated an 81 percent satisfaction, whereas those not using voice indicated only a 34 percent level of satisfaction. This is exciting because it clearly indicates that the technology has indeed provided an impact to their operations.

The WH Smith results are indicative of the potential value that voice technology can offer your business. As you plan for 2014, please think about how voice technology could be a positive enabler for your bottom line.

The Beer Industry is Alive and Growing!

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Deutsch_Scott_07aI attended the National Beer Wholesalers Association (NBWA) annual meeting in Las Vegas recently with 2,500 people in attendance. Now, before you go and start making comments…I didn’t see the outside world until I left for the airport. Boy, Caesars Palace is a large property!

 This was my first time to NBWA in Vegas and I’m glad I went. This event is special because it gives you a very good sense of what’s happening in the economy and how some of the larger beverage companies are approaching their marketing. I was fortunate enough to sit through the Anheuser-Busch (A-B) wholesalers meeting where they discussed market share by key categories with an emphasis on Bud Light and their marketing strategies by target market with an extended conversation around Millennials. More on Millennials later.

 When you get to listen to industry leaders talk about their business you learn how smart these people are. What was exciting to me as a marketer was the detailed discussion on sales analytics and the use of this analysis to help drive differing marketing communications strategies. I was thoroughly impressed with the A-B approach and their open communications to their vast wholesaler network. A-B did an excellent job discussing their sales by market segment with an emphasis on understanding what’s really happening in the craft beer market, which is garnering much coverage.

P1020842 But, to me the most fascinating conversation was about challenging the retail belief of some that beer was not as profitable as some other staple categories. With the help of independent consultants A-B was able to truly quantify the gross margin and total profitability of their products within a convenience store environment. Apparently too many people are focused on the buy margin discount and not the total gross margin. They did a superb job at showing how proper merchandising of a select set of SKUs positively impacts gross margins. It was very clear that having strong product offering at key price points is important to the A-B wholesaler and their retail customers. As someone outside of the beer industry, the open and frank discussion on “the market” was an excellent opportunity to better understand how this very important market to Vocollect Voice is ultimately thinking. Our ability to help our wholesale customers select more cases more accurately at a lower cost than traditional methods is a real value driver to wholesalers who are being squeezed with higher operating costs and growing pricing pressure from their retail customers. 

 Next up was an interesting conversation about market messaging and an open review of strategic thinking, with an extended discussion of how to engage and influence the millennial buyer. The conversation about positioning certain brands vs. the competition was really easy to follow since so much is spent annually promoting beer products. As a sports enthusiast, it was a fun discussion to listen to an analysis of messaging objectives with these well-funded integrated campaigns. One of my favorite slides was a side-by-side image of recent advertising campaigns from the top four lite beer producers. They all could have been produced by the same agency and all the actors looked like they all shopped at the GAP and selected from the same rack. As a market leader, A-B had its messaging copied and thus their competitors were able to leverage A-B spending to their advantage.

As a market leader in the voice market, and the market maker for voice, Vocollect Marketing also sees this similar follow-the-leader issue. It’s a whole lot cheaper to copy someone’s thinking and creative, than to design your own. After all, the leader of a market typically does market and positioning analysis, so we’ll just copy the message to minimize any real product differentiation. This follow-the-leader marketing approach keeps us on our toes and challenges us to always look for ways to clearly differentiate Vocollect Voice from “inferior” voice products. It’s fun to watch competition scramble for a couple months to figure out what we are doing. This past year has really been fun since we introduced our SRX2 wireless headset that when combined with SoundSense, as part of our BlueStreak Speech Recognition, provides a user experience that is unmatched. Think of it as our 25-can pack. Those in beer industry know what that means to gross margins.

Another part of the advertising conversation was making sure A-B was successfully attracting millennial buyers. It is strategically important to attract this set of buyers, so they are a part of the family for generations to come. The investments by A-B in learning how to engage these buyers is exciting, but clearly has made many of their wholesalers uncomfortable. Their questions during the 40-minute Q&A made this very obvious. I’m not surprised. Think about it, the head of beer wholesaler today is probably in their 50’s (if not older). What is their personal engagement with texting, Twitter, Facebook or Pinterest? Meanwhile, the millennial buyer is not watching TV or reading magazines and newspapers. 

 A-B gets it! They are trying various digital campaigns to engage this generation. A generation that has a very different engagement process. As an example, communications with my 19-year-old daughter at college is mostly via text. Email is not her preferred communications approach anymore. And her time on Facebook… is becoming a fading platform of interest for her and her friends. Marketing to the millennial means communicating where they are at and how they want to be engaged, without “selling them”. Millennials have a strong “help your fellow man mindset,” so it’s vital to figure out digitally how to frame an engagement with a “helping and socially moral” dimension.  So, keep at it A-B Marketing.

 I could not end this entry without discussing the trade show at NBWA. First for the business then, to the “only at NBWA.”

P1020775NBWA was an excellent trade show for Vocollect by Honeywell (we were acquired in September by Honeywell). Lots of customers stopped by the booth to say hello and discuss their use of Vocollect Voice and to see for themselves our exciting new SRX2 wireless headset. Many customers have said that Vocollect Voice with the SRX2 is a “game changer” for the beer industry. Companies are reporting some impressive results and are able to show even greater cost savings with the new technology. Having no headset wires on a worker in beer wholesale distribution is a great enhancement for the worker experience (as well an enhancement to their safety) and a real value differentiator for Vocollect Voice and our partners serving the beer industry.  By the way, it was great to see so many Vocollect Partners on the floor showing off their seamless direct integration capabilities to Vocollect Voice.

And now to my “only at NBWA.” I must say that Las Vegas and NBWA knows how to throw a trade show. Just do not bring your Human Resources team to the conference. As you would expect this being a show around beer, the beer was flowing everywhere….think Napa Valley vacation on steroids and not having to be concerned about driving … walking from booth to booth was the preferred mode of transportation.  There was no beer at the Vocollect by Honeywell booth and I have pictures here to validate the statement… I just wanted to make that clear to anyone in Honeywell HR reading this… here are a couple shots to give you a sense of the NBWA conference trade show floor.

Here’s a shot or two of some of the “only at NBWA” and the booth staff next to the Vocollect by Honeywell booth. I told you. Only at NBWA in Las Vegas.

P1020862 P1020857

 It’s a great show because all the decision makers are here for three days. It’s a great show because every beer company puts forth its best marketing effort with large teams attending to meet with their wholesalers and distributors. It was a great trip.

 In the end, what happens in Vegas, stay’s in Vegas.

Lean and Six Sigma with Best Practice Workflow Processes

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Best Practice PictureI was reading an article by Martha Heller in CIO Magazine the other day, in which Carlos Cardoso, CEO of Kennametal, was talking about their successful implementation of an ERP system. What was interesting to me was his attitude toward his ERP project. Instead of making the project an IT effort, he first made sure that the team focused on better rationalizing their business and workflow processes.

Taking stock of how you currently operate is a major philosophical mindset when looking to implement and configure new technology solutions. At Kennametal, they found more than 6,000 active processes and after rationalizing them, came up with a core library of just 600 processes. This is a staggering difference and I think more common than many would expect.  So many processes were put in place years ago and today are followed because “that’s the way we do things”. Unfortunately, many of these processes are not optimized for today’s business and are robbing you of potential operating efficiencies.  

By using Lean and Six Sigma approaches, you will be able to streamline processes and reduce operating inefficiencies. When Vocollect engages with a new customer about the potential utilization of voice technology, we start with this approach. At Kennametal, they mapped their processes against the standard processes available from their ERP supplier and found that 92% of their processes could be supported by adapting the standard “best in class” processes.  Mr. Cardoso stated, ”With thousands of companies using the ERP product already, our processes should not be so unique that we can’t leverage standard software processes.” When prospects review the potential adoption of Vocollect Voice, they also find our best practice workflow processes map very closely to their desired future state.

Solutions today that support best practice workflow processes help to better streamline operating environments and enable the reduction of overall project support costs. It surprises me when I hear of a project that starts with a white boarding of ideas. If a solution has been successfully implemented with thousands of customers and more than a million users, why would anyone discuss a detailed workflow process without starting with best practices? I understand the question of “what would you like to do”, however, this question should be more around what business issues are you trying to address. But, I still hear stories where the review of workflow processes begins with a whiteboard. What could possibly be the business justification for using this approach today? What executive would justify the funding of this type of technology investment? This “custom” mindset sounds great to the line of business owner, but does not consider the future solution, nor does it consider the opportunities lost through the potential leveraging of new features and capabilities made available from their solution provider. As Kennametal learned, if you start with best practices and map your updated processes to them, you will be surprised how close your processes may actually align to industry best processes.

When you think about improving your operational processes, I recommend you take the opportunity to review what you do, how you do it and why you do it. Question whether individual steps in a process are really needed. Challenge the business value that certain steps in a process provide the business and your workers. Take the opportunity to map your processes in detail. When you undertake this effort, you will find that “emotional owners” will begin to “defend” processes. In order to remove as much emotion as possible, I’d recommend that you video tape certain processes. This will enable the team to talk through the reality vs. the emotion. Lean processes are emotionless. You do what’s best for the business and your workers. And it’s important that you quantify the value of various process enhancements, since so many of these processes are repeated thousands of times each year by many workers. Having gained a better understanding of your processes you will then be able to better map your processes against industry best practice workflows.

When you start with best practices, you focus the team on what enhancements are required to support the business. You will find the team will have a mindset that challenges the business to change vs. a mindset of “that’s the way we do it”. Supporting unique business processes is vital and important, however, as Mr. Cardoso observed, “The IT solution comes last”.

Sharknado: Admit it, you watched it too.

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Sharknado picture with tara reidOK, I admit it, I watched Sharknado the other day after listening to Howard Stern talk about it. I was watching Sharknado with my daughter Zoe and my wife Marguerite. For the first 5 minutes, nothing but complaints about turning off this awful, almost laughable movie. But, they something happened. What was at one time laughable became a movie to laugh with. Suddenly, we were participating in the beginning of what surely will become a cult film.  I can picture myself years back sitting in my fraternity house at Drexel with everyone and playing a Sharknada game. That’s what a cult film is all about. People develop social engagements around a subject, without always taking the content seriously.

This is similar to what helps make videos on youtube go viral.

For those of you who have sen Sharknado, I am sorry to report that Tara Reid will not be participating in the sequel… yes, the sequel.

Sharknado 2 Invades NYC

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