“Never let a client treat your employees badly and if such incident does occur fire the client immediately. It is of most importance that the clients you work with have cultures that naturally sync with yours. A sale is never worth the mistreatment of your employees.”
It is important that you are periodically auditing and logging critical IT assets for the purpose of minimizing security, conduct and financial risks. Below I have noted the most important assets that should be properly logged and have auditable documentation.
IT ASSET MANAGEMENT CHECKLIST:
- Hardware and Software
- computer user, UPC, location, model number, et cetera
- Network and communications infrastructure, servers and apps
- Alarm systems
- Telephone circuits
- Vendors and Service Providers
- Purchase and disposal info
- Computer and Laptop software upgrades
- List of all apps in laptops or computers for each employee including authorization and security information.
- Cloud Data backup hardware (e.g.; external USB drive)
By using this checklist the next time you conduct an IT Asset audit you’ll be able to identify vulnerabilities and exploits that were not previously known to you. For example, let’s say your policy states that there should be 10 laptops kept in the supply room at all times but when you conduct an audit you find only 8 and employees have been careless with the laptop request form. The laptops also have not been entered into the tracking system making matters worse as now you have to dig through invoices to identify the two missing laptop model numbers and SKUs.
An IT Asset Policy is not effective if it is not enforced regularly. Employees must be reminded of them everyday and trained periodically.
“By encouraging your A/P team to report and make critical department KPI metrics visual, such as, process cycle time, activity lead times, and cost per invoice with industry and competitor comparisons you realize the opportunity to reduce costs, increase productivity and streamline processes.”
The shipping and delivery cycle time race amongst valuable brands like Amazon and Walmart is a fierce one. Many parcel companies like UPS and FedEx may offer discounted rates for delivering on time but the real question is, “Are they actually delivering on time?”
By implementing effective visual internal controls, your company’s accounts payable team may be able to identify delivery discrepancies per regular parcel audits and if they are found you are not required to pay them.
Other things to look for while auditing would be:
- Duplicate Invoices: Parcel vendor may generate duplicate invoices with different purchase order numbers, tracking numbers, invoice numbers, et cetera.
- Discount Rate Verification: Thorough analysis of the invoice is critical for the purpose of ensuring that the proper discount rate was included.
- Improper Billings: Sometimes there are multiple parties involved and you could be billed for the shipment when your contract specifically stated that “Vendor XX” was responsible for payment. You should integrate freight audit software into your accounts payable process to mitigate this risk.
- Rate Verification: Essentially, your accounts payable team should be ensuring that the rate base, math, mileage, product classification and weight all match your purchase order and contract agreement, otherwise you are overpaying.
- Fuel surcharges: It is important that this charge matches what is in your contract and not the current market rate.
Auditing offers the opportunity to gather critical data, such as, shipping spend by origin, destinations, general ledger codes, customers, fuel charges, vendors and carriers. This data can be used to improve your financial planning and analysis, and offer opportunities to streamline processes and realize cost innovations.
FMEA (Failure Modes & Effects Analysis) is a Lean Six Sigma technique for identifying both the ways that a product, part, process or service can fail and the effects of those failures.Once these failure modes are identified, they are rated by the severity of their effects and failure probability. This is critical to the design of any system, process, service or product.
There are 3 types of FMEA’s; system, process and design. However in this post I will only touch upon the Process FMEA. Process FMEA’s identify the different ways that a process could fail and the effects of those failures. They are often used to identify and rank process improvement opportunities. For the lower risk failure modes preventative plans are put in place to ensure minimal impact to productivity, costs, and delivery.
For example, say a Health Tech Startup, creates an app for patient on-boarding with a plethora of functionalities that they consider to be in the “cool factor”. However, this overload of features could overwhelm the user and miss the value curve completely. With an FMEA analysis they would be able to identify the most critical features, risks, and problems with the product before they take it to market, in turn, significantly reducing rework, product, and process costs.
Contact us now to learn more about how to minimize rework costs and identify problems in processes, systems or products before they are used or put into production.
“Effective Lean organizations study their processes from their customer’s point of view and align their processes to meet their customers’ needs the first time and every time.” – Donna Summers
Cooking delivery services offer customers the convenience and adventure of trying new meals right at home. However, the offerings are very similar amongst all mayor players like Blue Apron, Plated and Marley Spoon. Fresh packaged ingredients, serving plans and delicious recipes is the main offering package. Blue Apron offers a wine subscription delivery plan and suggests wine per a customer’s meal choice which optimizes its value to customers.
However, there is an under-valued opportunity that I believe will really drive growth for these companies. By developing targeted tier paid subscriptions based on consumer cooking levels, lifestyle (fitness, vegan, et cetera), meal preparation time, dish type and ingredients will help them lure in non-customers and increase revenue.
For example, lets say a cooking delivery service wanted to target people who hate to cook or don’t have time to cook. They could offer a beginner paid subscription based on the consumer cooking capabilities with easy to follow educational video instructions, meal prep time categories, dish types, and lifestyle categories with upgrade options to intermediate, advanced and expert level cooking subscriptions. They could further optimize this by partnering with grocery stores and integrating a rewards system for users who complete and learn cooking skills (badges, coupons, et cetera).
This example demonstrates how understanding the non-customer can help companies realize common value factors between current customers and non-customers. By personalizing the cooking offering customers would be able to choose their preferred prep time, dish type (breakfast, lunch, dinner, et cetera) and lifestyle category, in turn, increasing overall satisfaction and value to the consumer.
“To run an efficient accounting department opt for a chart of accounts with less than 180 accounts for improved productivity and financial planning.”
I have written blog posts about utilizing the Voice of the Customer (meaning using surveys, forums, social media, and focus groups) to gather and analyze data for the purpose of identifying revenue opportunities and increasing overall client satisfaction.
Customer-centric companies build emotional relationships with their customers and listen to them. They search for the pain points the customers are having by using their product or service. When they identify these pain points they are able to develop products, services, or solutions to eliminate them.
For example, say a cooking delivery service wants to differentiate itself from its competitors by taking a Know Your Customer approach and utilizing the Voice of the Customer to glean insights into critical customer pain points. In doing so, they realize that customers would pay for prepared healthy lunch meals that are similar to the to the meal options available to them near their workplace. By personalizing lunch meals based on local information, user preferences, and proper packaging for ease of travel the cooking delivery service was able to take advantage of an under-valued market opportunity and drive revenue.
In this example, the cooking delivery service decided to realize revenue opportunities by shifting its buyer focus. It decided to target non-customers that don’t really like to cook but want delicious prepared lunch meals that are similar to the ones they buy at work. Companies that continuously drive growth know the importance of understanding their current customers but also the customers that hate them and non-customers. They are driven by the pain points of these customers so that they can take advantage of first-to-market opportunities to develop solutions to these pain points.
The Know Your Customer approach is not something that can be outsourced. It is implored that you see and talk to customers yourself because that is the best way to truly understand how they are and are not using your product or service. It also offers the opportunity to realize new ways to offer value to your customers and non-customers.
Per my previous article, “Taking a Visual Management Approach to Accounts Payable”, I touched upon a Lean Six Sigma technique, called, Standardized Work.
“Standardized work is often referred as standard operating procedures to refer to the activities that must happen in order to complete a process. Essentially, everyone doing the job does it exactly the same way.” There should be no difference as to how your Sr. Accounts Payable Manager enters and processes bills versus your Junior Accounts Payable Coordinator. There would also be no difference between the 10th time they did the work or the 7,000th time they performed the work.
These standards and process procedures should include visual checklists, setup procedures, an integrated preventative plan, or other process steps. They should be written in terms of expected behavior or actions, and must be auditable.
Why do visual process controls make sense? It is known that people gain 80% of their information from their vision, 18% from their hearing and 2% from other senses. By implementing visual standard operating procedures for Accounts Receivable and Accounts Payable you aid in the reduction of transaction errors and process cycle time; and improve overall productivity, and client and vendor relations.
Critical departmental information, such as, KPI metrics (cost of A/P and A/R invoice, current process cycle time, on time delivery rate, et cetera) compared with industry and competitor data should also be visual as this will prompt your team to look for opportunities to improve.