Which Services to Share?

It often makes sense to pool resources. Farmers have been doing so for decades by collectively owning expensive combine harvesters. France, Germany, the United Kingdom and Spain have successfully pooled their manufacturing power to take on Boeing with their Airbus. But does this mean that shared services are right in every situation?

The Main Reasons for Sharing

The primary argument is economies of scale. If the Airbus partners each made 25% of the engines their production lines would be shorter and they would collectively need more technicians and tools. The second line of reasoning is that shared processes are more efficient, because there are greater opportunities for standardisation.

Is This the Same as Outsourcing?

Definitely not! If France, Germany, the United Kingdom and Spain has decided to form a collective airline and asked Boeing to build their fleet of aircraft, then they would have outsourced airplane manufacture and lost a strategic industry. This is where the bigger picture comes into play.

The Downside of Sharing

Centralising activities can cause havoc with workflow, and implode decentralised structures that have evolved over time. The Airbus technology called for creative ways to move aircraft fuselages around. In the case of farmers, they had to learn to be patient and accept that they would not always harvest at the optimum time.

Things Best Not Shared

Core business is what brings in the money, and this should be tailor-made to its market. It is also what keeps the company afloat and therefore best kept on board. The core business of the French, German, United Kingdom and Spanish civilian aircraft industry is transporting passengers. This is why they are able to share an aircraft supply chain that spun off into a commercial success story.

Things Best Shared

It follows that activities that are neither core nor place bound – and can therefore happen anywhere ? are the best targets for sharing. Anything processed on a computer can be processed on a remote computer. This is why automated accounting, stock control and human resources are the perfect services to share.

So Case Closed Then?

No, not quite. ?Technology has yet to overtake our humanity, our desire to feel part of the process and our need to feel valued. When an employee, supplier or customer has a problem with our administration it’s just not good enough to abdicate and say ?Oh, you have to speak to Dublin, they do it there?.

Call centres are a good example of abdication from stakeholder care. To an extent, these have ?confiscated? the right of customers to speak to speak directly to their providers. This has cost businesses more customers that they may wish to measure. Sharing services is not about relinquishing the duty to remain in touch. It is simply a more efficient way of managing routine matters.

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2015 ESOS Guidelines Chapter 3 to 5 ? The ESOS Assessment

ESOS operates in tandem with the ISO 50001 (Energy Management) system that encourages continual improvement in the efficient use of energy. Any UK enterprise qualifying for ESOS that has current ISO 50001 certification on the compliance date by an approved body (and that covers the entire UK corporate group) may present this as evidence of having completed its ESOS assessment. It does however still require board-level certification, following which it must notify the Environment Agency accordingly.

The Alternate ESOS Route

In the absence of an ISO 50001 energy management certificate addressing comprehensive energy use, a qualifying UK enterprise must:

  1. Measure Total Energy Consumption in either kWh or energy spend in pounds sterling, and across the entire operation including buildings, industrial processes and transport.
  2. Identify Areas of Significant Energy Consumption that account for at least 90% of the total. The balance falls into a de minimis group that is officially too trivial to merit consideration.
  1. Consider Available Routes to Compliance. These could include ISO 500001 part-certification, display energy certificates, green deal assessments, ESOS compliant energy audits, self-audits and independent assessments
  1. Do an Internal Review to make sure that you have covered every area of significant consumption. This is an important strategic step to avoid the possibility of failing to comply completely.
  1. Appoint an Approved Lead Assessor who may be internal or external to your enterprise, but must have ESOS approval. This person confirms you have met all ESOS requirements (unless you have no de minimis exceptions).
  1. Obtain Internal Certification by one of more board-level directors. They must certify they are satisfied with the veracity of the reports. They must also confirm that the enterprise is compliant with the scheme.
  1. Notify the Environment Agency of Compliance within the deadline using the online notification system as soon as the enterprise believes is fully compliant.
  1. Assemble your ESOS Evidential Pack and back it up in a safe place. Remember, it is your responsibility to provide proof of the above. Unearthing evidence a year later it not something to look forward to.

The ESOS assessment process is largely self-regulatory, although there are checks and balances in place including lead assessor and board-level certifications. As you work through what may seem to be a nuisance remember the primary objectives. These are saving money and reducing carbon emissions. Contact ecoVaro if we can assist in any way.

Technology and process improvement

Tightening organisational flow to improve productivity and minimise costs is a growing concern for many businesses post the Global Financial Crisis. Businesses can no longer afford to waste time and personnel on inefficient processes. Organisations using either Six Sigma or Lean techniques better manage their existing resources to maximise product out-put. Both of these techniques involve considerable evaluation of current processes.

What is Six Sigma?

Six Sigma is an organisational management strategy that evaluates processes for variation. In the Six Sigma model, variation equates waste. Eliminating variation for customer fulfilment allows a business to better serve the end-user. In this thought model, the only way to streamline processes is to use statistical data. Each part of a process must be carefully recorded and analysed for variation and potential improvements. The heart of the strategy embodied by Six Sigma is mathematical. Every process is subject to mathematical analysis and this allows for the most effective problem solving.

What is a Lean Model?

Lean businesses do not rely on mathematical models for improvement. Instead, the focus is on reducing steps in the customer delivery cycle, which do not add value to the final deliverable. For example, maintaining excess inventory or dealing with shortages would both be examples of waste behaviour. Businesses that operate using Lean strategies have strong cash flow cycles. One of the best and most famous examples of Lean in action is the Toyota Production System (TPS). In this system, not only is inventory minimised, but physical movement for employees also remains sharply controlled. Employees are able to reach everything needed to accomplish their tasks, without leaving the immediate area. By reducing the amount of movement needed to work, companies also remove wasted employee time.

Industry Applications for Lean and Six Sigma

Lean businesses reduce the number of steps between order and delivery. The less inventory on hand, the less it costs a business to operate. In industries where it is possible to create to order, Lean thinking offers significant advantages. Lean is best utilised in mature businesses. New companies, operating on a youthful model, may not be able to identify wasteful processes. Six Sigma has shown its value across industries through several evolution’s. Its focus on quality of process makes it a good choice for even brand new businesses. The best use is the combination of the two strategies. With the Lean focus on speed and the Six Sigma focus on quality combined, the two organisational processes create synergy. By itself, Lean does not help create stable, repeating success. Six Sigma does not help increase speed and reduce non value-added behaviours. Combined, these two strategies offer incredible value to every business in cost savings.

Using Technology to Implement Lean Six Sigma

Automation processes represent an opportunity for businesses to implement a combination of both Lean and Six Sigma strategies. Any technology that replaces the need for direct human oversight reduces costs and increases productivity. A few examples of potentially cost saving IT solutions include document scanning, the Internet, and automated workflow systems.

  • Document Scanning – Reducing dependency on paper copies follows both Lean and Six Sigma strategies. It is a Lean addition in that it allows employees to access documents instantly from any physical location. It is Six Sigma compliant in that it allows a reduction on process variation, since there is no bottleneck on the flow of information.
  • The Internet – The automation potential offered by the Internet is limitless. Now, businesses can enter orders, manage logistics and perform customer service activities from anywhere, through a hosted portal. With instant access to corporate processes from anywhere, businesses can manage workflow globally, allowing them to realise cost savings from decentralisation.
  • Automated Work Systems – One of the identified areas of waste in any business is processing time. The faster orders are processed and delivered, the greater the profits for the company and the less the expense per order. When orders sit waiting for attention, they represent lost productivity and waste. Automated work systems monitor workflow and alert users when an item sits longer than normal. These systems can also reroute work to an available employee when the original worker is tied up.

Each of these IT solutions provides a method for businesses to either reduce the number of steps in a process or improve the quality of the process for improved customer service.

Identifying Areas for Lean Six Sigma Implementation

Knowing that improved processes result in improved profits, identifying areas for improvement is the next step. There are several techniques for creating tighter processes with less waste and higher quality. Value Stream Mapping helps business owners and managers identify areas of waste by providing a visual representation of the total process stream. Instead of improving single areas for minimal increases in productivity, VSM shows the entire business structure and flow, allowing management to target each area of slow down for maximum improvement in all areas.

Seeing the areas of waste helps management better determine how processes should work to best obtain the desired outcomes. Adding in automated processes helps with improved process management, when put in place with a complete understanding of current systems and their weaknesses. Start with mapping and gain a bird’s-eye view of the situation, in order to make the changes needed for improvement.

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Reduce Cost and Improve Productivity

Whether the economy is in a downturn or not, management will always aim for a more cost effective IT solution. If your current IT infrastructure is hurting your profitability, our expertise is both ‘tested and proven”.? Also “bleeding edge” solutions in the industry will enable us to find inexpensive alternatives for you.

For instance, have you started to wonder whether having a constantly growing number of servers, many of which are underutilised, is really the norm? Well, that used to be the case. However, with the advent of virtualisation and replication, that expensive exercise is steadily becoming a thing of the past.

By implementing solutions powered by these two technologies, organisations can now manage excess storage capacities and hardware resources by performing simpler processes at lesser costs. In addition to that, using the same pair of technologies, companies can also decrease the downtime suffered during maintenance and upgrades.

Thus, at the end of the day, not only do companies stand to reduce expenditures, they can also boost revenues as a result of increased productivity time.

Do we still have other IT solutions that tackle a different set of problems but arrive at the same outcome, i.e. reduced costs + improved productivity = higher profits? You bet we do.

Basically, this is how we’ll help your company arrive at the same winning formula:

  • Provide insights as to where and when changes have to be made. Oftentimes, initiatives to reduce cost and improve productivity are not preceded by the appropriate study especially as with regards to their impact on all departments in the organisation. This usually results in unnecessary duplication of resources, a sure way to increase costs instead.
  • Consolidate and automate. We’ll work within your budget in finding ways to consolidate your applications, hardware, storage, databases, and processes. Then we’ll integrate automation practices to simplify management and maintenance of all these assets. This will substantially free not only your IT infrastructure but also your IT staff, giving them more opportunities to innovate.
  • Create an innovative environment. One of the benefits you gain in having room to innovate is the potential to discover new ways to drive costs even further. A fraction of your savings can then be used to develop even better IT solutions, thus creating a productive cycle: IT solutions > savings and innovation > better IT solutions. Our role is to help you harness your potentials to keep that cycle running.
  • Work to reduce carbon footprint in all your procedures. By ensuring that energy consumption is brought to a minimum in every step you take, you can rest assured that costs have only one way to go – down. Check out our Energy Management Software ecoVaro.

Find out how we can increase your efficiency even more:

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  • (+44)(0)20-7193-9751 – UK

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